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Links 11/25/08

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Marine life faces ‘acid threat’ BBC. We first wrote about this more than a year ago.

Bald Eagles in Catskills Show Increasing Mercury New York Times

Trading Down: Wine and Recession Wine Economics

Is Britain Going Bankrupt? Ambrose Evans-Pritchard, Telegraph

Goldman to Sell Bonds in First FDIC-Backed Offering Bloomberg

All US Financials Will be Nationalized in a Year: Manager CNBC (hat tip reader Saboor)

Congress Should Approve Bills Introduced in House and Senate to Shut Down Treasury’s $140 Billion Give-Away to Banks The Tax Justice Digest. Senator Bernie Sanders introduced a bill to rescind the Treasury Notice weakening the tax code restriction on use of a target bank’s NOLs.

Leverage by the numbers OptionArmageddon. Provides a nice table showing the leverage of the big banks. And who tops the list Citibank, at a mind-numbing 56 to one (Lehman at it most extreme was not within hailing distance of this level). And that figure does not include its $1.2 trillion of off balance sheet assets (versus official footings of $2.1 trillion).

Another Crisis, Another Guarantee Floyd Norris, New York Times

Anatomy of a Meltdown John Cassidy, The New Yorker

Bonfire of sovereign wealth funds? Brad Setser

Antidote du jour (hat tip reader John):

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9 comments

  2. fresno dan

    There are probably lots of reasons my simplistic idea won’t work, but its very satisfying viscerally. Let Citigroup fail, plus AIG, plus all the others. Take the TARP and the other 10 or 12 acronyms, add a trillion, and make that money available to competently run financial institutions – no more affirmative action for the stupid. And a trillion devided equally among all Americans. Mayend up spending less in the long run, but have a lot more accountability. The dirty secret is that stockholders do not behave like owners. Maybe the model, although great in theory, has no relevance to reality. I own stock, and the truth is, I have no idea of how to run a bank. And even if I did, would 50% of the other stockholders know how?

  3. Anonymous

    Just read “Anatomy of a Meltdown”
    and can’t figure out how the inept get rewarded over and over again, just because the Fed and the Treasury don’t want to look bad or their to big/IB.

    If our recent form of capitalism has not shown its propensity to tank every so many years do to over heating/bubbles or wildly/over complicated financial vehicles that look good for a short time, only to tank hard down the road.

    Is it not self evident the need to find parity in the private and public sectors. Monies will not fix the broader social problems that the world faces. Infinite expansion will not address the issues we really face in society today. Untill we face the real problems on the tip of our nose, we will never find traction and move in the right direction.

    Skippy

  6. Stephen

    The anatomy article is good one…finally someone puts down a decent timeline. This goes back a long time, we seem to have have done some sleepwalking.

    More of a fireman than arsonist focussed article. it doesnt really go into a lot of detail about how things are interconnected, just that they are. Also doesnt describe why etc. you get hints of the horror when you read that the money market mutual funds, thiose alleged bastions of conservatism, were lending overnight money to Lehman for CDO’s. Good returns when there isnt a storm but wow they were effectively lending money based on the name Lehman alone. I guess nobody ever thinks what happens if I have to collect.

    Add one more thing to the list that the regulators are going to have to examine.

    There is still an untold story of the Lehman collapse. The article really doesnt touch on Lehman, why it was such a house of cards, why it couldnt find a buyer or why, as is rumoured, it turned down buyers. Was Lehman a massive game a chicken?

    Some positive hints about Larry Summers, criticizing the fact that fannie and freddie were left with mgt in place at the time. They know of the problems and they know there are congressional defenders…including potentially the new President Elect.

    I still believe you do what you can to buy the time but you have to ensure that there is follow up, there is reform.

    It still isnt clear that the core question of, should Central Banks prick specific asset bubbles, when and how? has been answered. Is it a job of monetary policy or is it a job of fiscal and tax policy or one of regulatory policy.

    But good overview article. Curious to hear others on their opinions on the article and the questions it raises?

  7. Anonymous

    You know things are bad when, in todays press conference Paulson’s physical actions reminded me of some one having a massive panic attack or psychotic meltdown. The rolling eyes, constant licking of the lips, jittery hand movements and could not stand in one spot for more than a second. Now I’m scared.

    Skippy

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