Canada rated world’s soundest bank system Reuters. You need to read the rankings. The US is behind Namibia.
FTC warns: Financial quagmire bringing out the scammers Network World
GE Capital scales back lending Financial Times
EU Crippled in Crisis as 27 Governments Confront Single Economy Bloomberg
Über-rich count their losses in billions Times Online
Yamato Life Files for Bankruptcy, Citing Investments Bloomberg
Running Commentary On Derivative Beast Eating Everything In Next 24 Hrs Elaine Meinel Supkis. She is more than a bit eccentric, and today offers a good recap of articles around the world.
Does Morgan Stanley Need To Raise $30 Billion? Clusterstock
Moment of Truth Paul Krugman
Hedge Hemorrhage Will Lead to “Capitulation Crash” Pension Pulse
Does Income Concentration Cause Bubbles? Mark Thoma
Will the US current account deficit fall faster than the IMF forecasts? Brad Setser
Antidote du jour. You get two today for obvious reasons:
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After electricity was disconnected on wall street, shortly after The 2008 Crash, many apartment dwellers began employing homeless dogs to clean dishes. Although this popular activity was wide spread it soon became apparent that few people had money for food and thus dogs were forced to leave the city in large numbers. It was during this exodus that The Canine Right To Work Act was passionately debated in Congress for 3 years. Although passage of the act failed, the debate process resulted in The Dishwasher Safety Act of 2014, which paved the way for a series of legislative actions that eventually helped to restore order and power to dishwashers all across America.
Reality Bites
“I think we are in the midst of a period of the fastest wealth destruction that we’ve seen in at least two decades,” said Robert Frank, author of the book “Richistan,” a bestseller about how, until recently, the number of rich people in the United States has been exploding.
The market “just seems to be making everyone depressed, from the very top to the very bottom” of the major investment houses, Frank said. “The value system was all about making more [money]. Now what’s the value system?”
http://chasevectors.blogspot.com/
Great blog there^
Financial quagmire bringing out the scammers, warns the FTC. Be wary of scammers asking for several hundred billion dollars which they promise to spend responsibly. Also be skeptical of claims that additional billions in capital injections are necessary. Many scammers may also demand golden parachutes. BE VIGILANT!
How is it possible the government response has been so incredibly bad?
From last thread, they are _still_ worried about executive pay and diluting existing shareholders???
I really just don’t get it.
“Does income concentration cause Bubbles?” asks Mark Thoma in the linked article.
The guy must be an “economist,” because he’s confused correlation with causation in a flagrantly back-arsewards manner.
Bubbles for sure cause income concentration, owing to capital gains (as Thoma dimly discerns).
But what causes Bubbles? The cause has been ever the same: thin-air credit creation. Might be tulip bulbs; might be tech stocks with no earnings; might be “triple A-rated CDOs.” But always, some improbable “asset” gets monetized at a level far in excess of its sustainable value.
Today, the SVNE (Simian-Visaged Non-Entity) who’s impersonating the president speaks at mid-morning. A copy of his speech has been leaked to me. Punch line: “The U.S. economy is fundamentally sound.” Mwa ha ha ha …
Then Benny Bubbles is on deck at midday. Harking back to his 2002 paper, Ben will blurt out the truth: “Your $700 billion is gone. We need $7 trillion for a fleet of ‘print on the fly’ helicopters. Use these valuable coupons for all of your shopping needs, citizens!”
The effect is ruined when news videos show Benny himself helicoptering off the roof of the Eccles Building, in a scene reminiscent of the evacuation of the US Embassy in Saigon in 1975.
The death of Bretton Woods II is high drama indeed. Some old music comes back alive with perfect resonance …
http://en.wikipedia.org/wiki/In_the_Good_Old_Days_(When_Times_Were_Bad)
— Juan Falcone
Elaine Supkis: ‘
‘Japan, tonight, just threatened the US with utter destruction. The nuclear bomb they used was the threat to no longer use the dollar as the global exchange medium for determining relative values of trade goods! Or banking! The FIAT DOLLAR WILL DIE.’
Elaine goes on to explain that the Japanese are going to ‘get even’ with the US for dropping nukes on them.
Of course, China has not forgotten the opium wars, Germany has not forgotten the fire bombings, Russia remembers the Nazi invasion, and the great great grandson of Napolean has plans for a full scale reenactment of the Battle of Waterloo. Everyone has an axe to grind…
Will nations really act in ways that are counter to their economic self interest, merely to settle old scores? Does economic stress trigger irrationality? My wife is a psychologist and when I posed these questions to her she continued to read a novel and said ‘Hmmm’…A relationship where both parties ask questions but neither provide answers goes a long way toward preventing disagreements.
So what exactly happened to the Paulson Plan.
Last week it looked like our SecTsy had gotten carte blanche to purchase billions in toxic waste from MS/GS/BAC/C at a premium. C even went on a spree and tried to buy a bank with bazillions in toxic waste that could be put to the Tsy a premium.
Now, none of these places trade like they own deep-in-the-money put options.
What happened?
Escape de Sofia made my day.
Indeed derivatives are a “zero sum” game as the banks will have nothing but zeroes by the day’s end and not even a Level 4 “asset” to show for it.
Derivatives work only if no one has to pay up, it’s constantly “rolled over” and “hedged” with a “comparable” derivative and the whole ball of wax becomes a Level 4 “asset.” Derivatives are neither asset nor are they “insurance” but a tax and regulatory gambit that arbitrages away reserves and taxes while increasing paper profits, allowing for leverage, and providing a nice cash flow to executives.
The first IB to unleash this “innovative” finance was Drexel and it ended in a heap after the other side of the gig, insider trading was exposed. Interesting to watch it happen on a grand scale.
Lehman to Spark Record Payout for Credit Swap Sellers
http://www.bloomberg.com/apps/news?pid=20601087&sid=aa6nmsv7BakE&refer=home
Notice how derivatives will impact bond funds as well:
"The Pimco Total Return Fund had written protection on $105.4 million face amount of Lehman debt as of June 30, according to regulatory filings. Pimco spokesman Mark Porterfield didn't immediately return a call seeking comment."
Thanks Doc, Juan and others.
Is there a thread alive that this is the end of the Bretton Woods, western industrialized, debt-based monetary system?
That’s a real question.
I got slammed for asking if this was the end to capitalism, as we have known it.
Bretton Woods was the vehicle that slammed shut the door to discussion of monetary reform that was very much alive in the ’30s.
Then came the war, and Bretton Woods.
You’re either debt-money based capitalists like the rest of us, or you’re with the communists.
Or, the socialists.
I do honestly believe that today we are seeing the end to that debt-money system.
This was its last bubble.
My dad said the one thing he remembered about the crash that preceded the depression that always stuck with him.
The day before the crash everyone had a job, everyone had housing, everyone had food, everyone had a life.
Then there was the beginning of nothingness.
ALL of the productive and consumptive forces in the NATURAL economy were put on hold because of, as he called it, a bunch of PAPER.
We can only begin again by ending the paper-control of the American people and a resort to people-powered free enterprise.
Debt-free money.
100 percent reserve banking.
Public credit.
Monetary Transformation.
Begin again.
Joe
thank you. we’ve successfully prevailed on management to put a bolt on the roof door -removed by the new owners 6 years ago. With no crime to little crime there has been complacency about it. but I’m your dad’s age and I know better. Wish I were not living in inner city New York at this moment in time. I could be listening to you and Yves from a safe place.
The end of life as we have known it. Oh, God! to coin a phrase
jBut wait a mimute –Daddy’s on the telly. Everythin’ll be alright.
What a clever dog, he found a way to game the “system”! Bet it’s ready to work in investment banking now ;-)