From a "dynamical systems" point of view, globalization and the resulting tighter coupling among economies lead to a higher risk of a system-wide collapse. This idea was discussed in a series of very interesting articles on the "Naked Capitalism" blog recently. Intuitively, with only loosely coupled economies, local problems in any particular economy tend to remain localized. An unanticipated side effect of globalization is that problems also tend to propagate among the economies, resulting in the mess the World is in now.
The only good thing for the Spaniards is at least their currency isn't going to collapse along with their banking system and as the rest of Europe slows the ECB will have a holster full of ammunition to cut rates.
The new brand, BBVA Compass, will be rolled out progressively in coming months through an investment of $30 million, recycling the name of Compass Bank. BBVA acquired Compass Bank, an Alabama-based regional bank, for $9.6 billion last year.
"Even though the business environment is getting more difficult, the timing is actually quite favorable for us," said José María García Meyer, head of BBVA's U.S. division. "Some banks are pulling out of some markets because they don't have the liquidity or because they are refocusing on core businesses. Some are selling branches, and retrenching in businesses such as consumer or car loans. Some players will disappear."
BBVA's push mirrors the emerging presence of Spanish banks in the global arena.
Along with rival Santander, BBVA is one of the few big international banks that have been able to duck the subprime-mortgage crisis, because conservative Spanish regulation prevented financial-services companies from making significant investments outside their balance sheet.
After expanding aggressively across Latin America over the past decade, BBVA started to focus north of the Rio Grande, creating a $65 billion bank franchise that after consolidating will be No. 4 in terms of market share in Texas, behind established players such as J.P. Morgan Chase & Co., Bank of America Corp. and Wells Fargo & Co.
I think the jury is still out of whether the impact of recession in the west will be positive or negative on the emerging market economies. Certainly there will be an impact--to that extent the decoupling argument was always more rhetorical than closely reasoned.
But, recession in the west may have all kinds of beneficial results on the emerging markets countries. Those economies are generally overheated, facing more severe inflationary pressues than the developed world (because commodities, etc., are a bigger part of their consumer prices). If their exports are reduced by declining consumer demand in the West and their governments take relatively simple steps to replace the demand--not with personal consumption in the private sector, of course, but, a la Japan in the 90s, with public works, or, a la the United States in the 50s, a military buildup, or, a la every European country in teh 20th century, transfer payments, you name it--all easily accomplished in command economies--a recession over here might, perish the thought, be good for that part of the world.
Remember, those people are not wedded to a free market, they are committed to economic development, using whatever tools are most effective. Nor do they have a social commitment to increased personal consumption as a measure of economic well being. To the contrary, I think the powers-that-be are a mite concerned about the social tensions caused by all that.
To be fair, the big decoupling stories were China & the commodity/energy producers. The idea was that the europeans (and Japanese) would be able to muddle through exporting capital and luxury goods to those economies.
So far, Chinese growth remains incredibly strong by G7 standards.
...the ECB will have a holster full of ammunition to cut rates.
I think that seriously remains to be seen. The Europeans have more tolerance for unemployment (better safety net) and less for inflation (not the reserve currency). I wouldn't bet on them reacting the same way as the Yanks.
watching this strip tease unfold is way too unfun.
question of the day: why don't the US/UK/EU regulators (including FASB) simply say: no more off-balance-sheet crap. put a price on it, and disclose by the end of next month? If you guess wrong on 'level 3' assets (in either direction) you can correct it later, but your margin of error will be considered when your fitness to continue is reviewed. Lies will be prosecuted under the criminal code as well as civil.
not knowing who's got what hidden away is just making uncertainty apply to everyone. disclose or be taken in conservatorship!
"Anonymous writes:
The only good thing for the Spaniards is at least their currency isn't going to collapse along with their banking system and as the rest of Europe slows the ECB will have a holster full of ammunition to cut rates."
There was a wire story about a Bundesbank member telling investors in a private meeting that the Spanish (and Italians) will probably have to be booted out of the euro.
There are a number of serious issues with the structure of the euro which could come to the surface when if and when a serious crisis hits.
Two big issues - there is no mechanism for a country to leave, and the governments do not have an unlimited right to borrow from the central bank. I.e., default risk is a possibility, which is not true for any other major sovereign.
"JimPortlandOR writes:
watching this strip tease unfold is way too unfun.
question of the day: why don't the US/UK/EU regulators (including FASB) simply say: no more off-balance-sheet crap. put a price on it, and disclose by the end of next month? If you guess wrong on 'level 3' assets (in either direction) you can correct it later, but your margin of error will be considered when your fitness to continue is reviewed. Lies will be prosecuted under the criminal code as well as civil.
not knowing who's got what hidden away is just making uncertainty apply to everyone. disclose or be taken in conservatorship!"
If everyone knows what everyone's positions are, it would be very easy to manipulate markets to drive an otherwise viable competitor under.
"Anonymous writes:
"I wouldn't bet on them reacting the same way as the Yanks."
For their sake I hope they don't. All of these countries have seen a currency crisis, that's why Americans are going to be caught so off guard."
The USD has been in a rolling set of currency crises for the past 40-50 years. They may not longer be discussed in the media, but anyone who follows the history of markets and policy making are well aware of them.
So how much do you guys think the parts of the country that have held up so far will drop? (Like NYC, or better neighborhoods in cities like Chicago, or obscure places like Idaho?)
I do think that if the Euro (and by extension the Union) are to survive the collapse of "value" that we can see evolving, it will take a lot more improvisation and creativity than they are letting on now. Spain, Greece, Ireland, all had as much if not more of California's insanity, and banks were just as free to follow as they were in the States...but being politically and economically less "tightly coupled" themselves may make a creative transition more possible. Strength in diversity (and the possibility of throwing countries out, or bringing some more in...) Where in the States the range of politically acceptable options is likely much narrower.
Well this will be crunch time for the EU.
Like the US with Articles of Confederation, individual sovereignty will not work.
Will old Europe give up national control of budgets? Or can they not???
am betting on a US of Europe.
The market does not instantly converge to an efficient level after mispricing occurs, but the adjustment process is rapid. Arbitrageurs remove many of these opportunities within minutes of them being created and the majority are gone within an hour. Arbitrage opportunities that are more difficult to find last for longer.
After reading this blog for several weeks, I think it's safe to say no one here is a fan of Adam Smith. Quite the opposite. If you've been reading, we've been ranting against bailouts for the rich!
FYI, You're not going to find a better read crowd.
Tanya S.
NYC is an international city. And don't think it will follow US trends closely. We have a lot of foreign buyers buying in.
They top of the market, home to the Wall Street Bonus crowd will drop faster then middle of market-unlike the say San Diego market.
Ireland , Britain and Spain all had insane property price runups ... The price appreciation in Britain out paced ours here in America if you can believe that.
"The Wealth of Nations writes:
After reading this blog for several weeks, I think it's safe to say no one here is a fan of Adam Smith."
A friend of mine did a Ph.D. in the history of philosophy. From what I recall of my drunken philosophical discussions with him, 99% of what Adam Smith wrote has very little connection to what we worry about in present day economics. In order to understand him, you really need to understand what was happening in 18th century philosophy.
But on his NYU c.v. page, he says he was born in Istanbul.
Also, if he was born into an Iranian family in Istanbul, then why does he have the name Roubini, which seems like some sort of italicization of the "Rubin" name? I can understand some name changing, but can't understand the Iran/Turkey dilemma.
Dr. if you read the blog could you comment? Where were you born? Don't want to trouble you with a direct email.
Rosner and Mason seem to have gotten the ball really rolling -- their paper undermined all faith in a system that didn't deserve it to begin with (shock and awe), and Roubini is like constant mortar fire, pounding the fear into us on a weekly basis, demoralizing us.
Pricey bunkers could slow down tankers again Tankerworld.com
The world's biggest tanker company, Frontline, has said owners may soon slow their ships to offset rising bunker prices and potential rate decreases.
According to the company, Frontline itself and "several major owners" sailed 20% slower than normal toward the end of 2007 because low demand and record fuel costs was hurting margins.
I can't believe I used to listen to Adam Ant. His vocals would not even make the Hollywood stage of American Idol and that video is so....80s....I am embarrassed to say.
Sold our 3/perhaps 4 bed house last year at $240K. Old neighbors down the street now selling theirs, side by side. Each has 4/perhaps 5 beds - one started at $300 and has dropped after 2 months to $284. Other, just on the market, is listed by local realtor who's an expert on this town, at $250K.
His opinion is that Europe is going to downturn worse than the US. Imagine!
MiTurn | 07.15.08 - 10:42 pm | #
Their currency is killing them - they are generally more dependent on exports than we are. I have a business buddy over there now trying to settle down clients - exporters - they aren't settling nicely. A big plunge in the euro would make them very happy... VERY HAPPY!!!
And who ever up thread said the ECB isn't as concerned about unemployment is right - they wouldn't lose sleep if their UE went to 12% tomorrow. One mission - inflation.
The elected officials might sweat a bit though.
I would not be surprised to see the EU break up due to north-south, east-west differences.
That's why shorting bucky is so interesting - where does the hot money go after euro blows up? BTW - BOJ has shown over the decades they'll punish anyone trying to prop up the yen so it won't be there. China is resisting...
We are likely to remain the default reserve currency even though we don't deserve it.
curious-er writes:
I think there are six different conversations going on here at the same time--a good sign of decoupling. Maybe there is hope for the world economy.
curious-er | 07.15.08 - 11:02 pm | #
I used to like coupling... but that was when I was younger.
Sorry to be posting all these links, but it is so. . . . interesting. Is the dollar doomed?
"For now, sentiment is also very much against the US currency. Several analysts pointed to the fact that even though Germanys ZEW economic sentiment survey was much weaker than expected yesterday, the euro still rose.
Mr Redeker says: The euro is rising not because it is a glorious currency, but because people are desperate to get out of the dollar.
hd43, building on what you said...prices for existing houses around the NE haven't really gotten out of control, but, the explosion of houses selling for $500k+ in an area where there really isn't much going on has been mind-blowing in the last 5-10 years.
Weirdly enough, I just found this new article right on Roubini's website -- written by Joseph Mason of Mason-Rosner fame, discussing the efficacy and mechanics of bailouts:
I'm sorry Ub, that was out of line but it seemed to tie together the de-decoupling problem with a previous thread, where something else was going on; sorry! I thought Schwarzchild was always on topic?
Researchers at St. Andrews University, Scotland, claim to have found a way to simulate an event horizon of a black hole - not through a new cosmic observation technique, and not by a high powered supercomputer but in the laboratory... Synthetic Black Hole Event Horizon Created in UK Laboratory | Universe Today
Russia volunteered to take that roll the other day, don't think that will ever fly but I'm sure they would be thrilled to do it.
Anonymous | 07.15.08 - 11:21 pm | #
That would go over big in Eastern Europe, Caucuses, Central Asia & China. I can't think of anything more dollar bullish - from a real politik perspective.
In NE, you've got all the overflow from the NYC area. $500K is cheap in their mindset.
In southern York County, PA, small towns like Shrewsbury have exploded because of the desire of DC/Balto workers to escape to lower cost areas. But those prices were nuts to the locals.
Embrace reality for what is is. There will be no deflation. Deflation favors savers. And yes, paper chits or digits are created at will. The question is can they replace credit faster than it is being destroyed? Of course.
Uncle Bennie implied the dollar is dead. He cares not a whit about savers. He is absorbed in a race to save debtors. Because if debtors are forced to PAY, the system is kurplunkt...
I don't think a couple of guys in Scotland will be allowed to reproduce a singularity in the lab; two guys from Florida will sue them to prevent this. And with that I think I've reached my Chandrasekhar limit.
There was a wire story about a Bundesbank member telling investors in a private meeting that the Spanish (and Italians) will probably have to be booted out of the euro.
NYC is an international city. And don't think it will follow US trends closely. We have a lot of foreign buyers buying in.
I live in a nice, near-end, affluent suburb of NYC. Prices here have already dropped 10-15% from peak.
Inventory is exploding, and NOTHING is moving. Realtors are dying.
And it's just the start here.
rich | 07.15.08 - 10:55 pm | #
Trying to figure out how my in-laws just sold a home for 100K over asking. Cupertino Ca. area, good schools, but someone's either thinking it's April 1st, or has too much $.
But on his NYU c.v. page, he says he was born in Istanbul.
Also, if he was born into an Iranian family in Istanbul, then why does he have the name Roubini, which seems like some sort of italicization of the "Rubin" name? I can understand some name changing, but can't understand the Iran/Turkey dilemma.
You need to read better; I don't see any contradiction; at both the places you mention he's said to be born in Istanbul, Turkey. That's what it is on the resume and that's what it is at the janera.com site, to quote:
Economist Nouriel Roubini, an Iranian from Jewish descent, born in Istanbul, lived and studied in Italy, Israel and the US, divides his time working and traveling between the Middle East, Europe and US
Uncle Billy Is Befuddled
He's an US citizen now as well by the way .
You also need to get out more - You heard of the diaspora ? If you did, you wouldn't find the name variants odd.
Maybe you are just trying to create some mischief ?
-K
new concept for me, how would that work technically?
rich-
I also live in a semi-affluent neighborhood in NYC and couldn't agree more. Renting post sale of our building in '05.
I'm seeing rents increase, CRE tanking and panic creeping in. Looking forward to the vast quantity of empty new construction dropping rental prices. Could take a year or so though.
You are an optimist in my book. IMHO California prices will scream back past 1996 levels without even a sideways glance. Never before has a boom/bust cycle resulted in the total gutting of homeowner equity.
Sk: no, the article says he was born in Istanbul, but if you look further down, he says in his own words: " I was born into a relatively orthodox Jewish family in Iran [my emphasis], lived in Israel and Turkey, and then moved to Italy as a child"
No mischief whatsoever intended. I'm trying to figure out who these people are and what motivates them.
Trying to figure out how my in-laws just sold a home for 100K over asking. Cupertino Ca. area, good schools, but someone's either thinking it's April 1st, or has too much $.
Cupertino is ground-zero for the Apple RDF. Apple people are raking in good money, and potentially looking for a place to live that requires a shorter drive to work. Not at all surprised by this report.
Trying to figure out how my in-laws just sold a home for 100K over asking. Cupertino Ca. area, good schools, but someone's either thinking it's April 1st, or has too much $.
The latter. AAPL and GOOG have 15,000+ on-site people, up to half of them sitting on $500K+ in ITM options, looking to buy a place to live.
ziprealty sez there are 257 homes for sale between Foothill College and Wolfe.
Tip of the day. I just got back from an adult attention deficit chili cookoff, and I probably ate, maybe 30 or 50 bowls -- it was so fun. Anyway, the hot topic of the show was bank consolidation and bank failures, well, the bottom line, obviously lower yields, lower divs, lower dollar, lower treasuries and higher inflation -- what's that spell.
Anywho, this is somehwhat related to housing, which has a similar problem, which is an accelerated downside that feeds off lower prices, which feed foreclosures (in a self re-enforcing kinda feedback loop-thing) thus, we have the twin pillars there falling on each other, as oil de-couples and probably will connect by default to The Euro as the new defacto currency.
Just thought you should now, and now, back to our blackhole radius program...
Accrued Interest but i thought this was interesting: Update on USA CDS
I've gotten many e-mails about CDS on the United States. I was able to find a Bloomberg ticker for the figure most often quoted (the 10-year): CT786916. Use the Currency key to bring it up. Not much history but you can at least follow it from here on in.
Anyway, heard the spread widened 2bps today to 22bps. That's not on Bloomberg yet.
It will be interesting to watch the EU countries fight over the value of the euro. Spain, Ireland, Greece, Italy playing as loose with their banks as the US, while the rest of the EU share the burden of their mistakes. Germany is already starting to object (preferring German euros over Spanish).
no worries, no need to go bold. it's an interesting question about a fascinating man.
personally i don't know the answer about birth location, but have been following Dr. Roubini and Dr. Setser since their seminal paper in '04 or '05. far ahead of the curve in prediction and extremely forthright in the data and continuing analysis.
admirable folks to raise concern despite the expected backlash.
plus they made lotsa moolah for me from their insight.
You can never reach the end of your Chandrasekhar limit, because, as you will recall from geometry class: Godel's closed timelike curve.
One feature of a CTC is that it opens the possibility of a worldline which is not connected to earlier times, and so the existence of events that cannot be traced to an earlier cause. Closed timelike curve - Wikipedia, the free encyclopedia
I don't understand the whole "angry saver" rationale. In helping debtor's isn't there also a boost given to savers? I don't know if there is a lot to complain about, I suppose I'm just obtuse, but savers also get helped too, no?
What savers? With asphalt prices going up, property taxes going up, Fed and state taxes going up, inflation going parabolic with milk at $4.00 a gallon, gas going to $5.00 and jobs caving in, housing mkt dead, bank runs....what savers?
Some of you may recall from the Kasriel thread that I was talking about buying a machine today for $3,250.
Son of mp spoke with the man again late this afternoon. Son of mp said that, as they were discussing terms, son of mp hesitated for a moment while reaching for his soda.
The guy dropped his price $250.
Son of mp said he almost choked at that point. I said, "You mean you were stunned and surprised?"
Good source of NYC RE is "The Real Deal"
NYC RE has very different characteristics then most places-mostly multifamily low % home ownership. Suburbs are mostly very different. Also with the best mass transit in US gas prices are a plus for NYC RE
If the cost of living increase exceeds investment returns savers get burned. If the savers have to pay with their dollars for the foolishness of debtors and lenders, they get burned. Savers have the money to rescue the debtors, who else would it be? However in the housing market debtors are getting burned too. Many savers and debtors are subject to the rotating spiral spike, except those actually being bailed out, the lenders that are too big to fail, the investment houses that are too big to fail.
I do not think that within a short period of months in recent memory have we seen the rescue of three financial firms, that if they would fail threaten the entire global financial system.
I do remember a Ray Bradbury short story about a butterfly being killed on a visit to the past, when the time traveler stepped off the designated path. Upon return to the present the time traveler found out that the spelling of words were different and the government did not seem democratic anymore.
Where and what is that dead butterfly, that puts the system into the chaotic change of state? Is the butterfly already dead?
The market has reacted to your plan by driving down Fannie Mae shares 26 percent today,'' Senator Jim Bunning, a Kentucky Republican, told the Treasury chief.Freddie Mac's are down 29 percent at this moment, just in case you are interested in how the markets are reacting to your wonderful plan.''
After a verbal lashing from senators of both parties, Paulson emphasized the urgency of the proposal.
This ``will be a great confidence-builder throughout the world, to see Republicans and Democrats, both houses come together and do something quickly here,'' he said.
More than 50 hedge funds firms including SAC Capital Advisors LLC and Citadel Investment Group LLC have received subpoenas, people with knowledge of the situation said. The Wall Street Journal reported the requests to hedge funds yesterday.
Most of the subpoenas were sent last week, and some recipients are being asked for information relating only to Lehman or Bear Stearns, a person familiar with them said.
Another interesting thing about the name Roubini is that it is fairly common in Greece, but as a first name.
Lastly, and something all Roubini's might enjoy, Roubini Jatjistephanou starred as Aleka Spay in Panos Koutras' Sci-Fi epic "Attack of the Giant Moussaka"
Did I just FUBAR haloscan for everyone on the Internets? I only wanted to preview what was going on... and then when I went to post a legitimate message... crash!
So far we've covered, in our study of personalities that seem to have or had much influence on the economy, Mudd, Rosner, Mason, Roubini, and Gorelick. That's Jamie Gorelick? The person who just wrote an opinion piece in the NY Times?
Ok. Her suggestions sound all very reasonable. But check out her little bio at the end of the piece. It says she was deputy atty general. Glaring omission there: she was vice chairman of fannie mae for six years, during the Franklin Raines period.
Uncle Wiki fills in the details of the $26 Million she made, and the "allegations" of $9 Billion in unrecorded losses.
Those who are running down the spanish banking sector don't have a f'n clue.
RTO is exactly right that UK will face more problems from spanish RE than Spain itself. Their bubble only went nationwide in the lat year and have done well to keep it out of control (30% dow does that)
Pamplona is the only town I've been to in the last year & a half were the economy was in the dumps
Martinsa did a LBO for the much bigger Fadesa. One year later the RE market stalled and two years later the market started to collapse. In this situation banks don't want to renew credit with the entity. There are a few more campanies in similar situation.
It is interesting that as credit problems arise in Spain many blame american subprime loans. To be sure, there are a lot more subprime loans, in relative terms, in Spain than in the USA. Delinquencies are rising very rapidly. Nevertheless, the ECB keeps its window open for spanish banks that still make MBSs just to use them as collateral at the ECB facility.
Speed, re euro -
the original article was either in Handelsblatt or Financial Times Deutschland, and since then, especially with Ambrose Evans-Pritchard, it has taken on a life of its own, it seems. Sorry, couldn't find the German original, but the English language results are a true echo chamber.
But then, particularly the British press is noted for its reliable and accurate reporting about Europe.
Again, absolutely no one I know of cares in the least where their euros, bills or coins, come from. From the few people I have asked, none have had any idea why I am even asking.
The euro will face any number of challenges (let's just say that Italy managed to show that America's stupidity in re-electing an incompetent fool is not exceptional), but what the British press, especially, seems to miss is just how useful a single currency is in the world's largest market to the businesses within that market. Companies which do business throughout the eurozone were able to shave a couple of percent off their costs, and are able to plan in the long term.
A few people with fond memories of the D-mark are not going to have much impact compared to VW's or Siemen's or BASF's wishes.
I'm not quite sure how to put this - the EU has been pronounced on its deathbed pretty much since its founding more than 50 years ago, and generally, the people making the loudest proclamations have been those writing in British papers.
1?
Contained to humans and planet earth
Doesn't globalization imply tighter coupling than ever before?
Decoupling was always illogical.
So much for decoupling.
YouTube -
Cheers,
Why@ ZIRP writes:
Doesn't globalization imply tighter coupling than ever before?
Decoupling was always illogical.
From a "dynamical systems" point of view, globalization and the resulting tighter coupling among economies lead to a higher risk of a system-wide collapse. This idea was discussed in a series of very interesting articles on the "Naked Capitalism" blog recently. Intuitively, with only loosely coupled economies, local problems in any particular economy tend to remain localized. An unanticipated side effect of globalization is that problems also tend to propagate among the economies, resulting in the mess the World is in now.
The only good thing for the Spaniards is at least their currency isn't going to collapse along with their banking system and as the rest of Europe slows the ECB will have a holster full of ammunition to cut rates.
Oui, Oui,
This is very much related, oui! (sorry)>
The new brand, BBVA Compass, will be rolled out progressively in coming months through an investment of $30 million, recycling the name of Compass Bank. BBVA acquired Compass Bank, an Alabama-based regional bank, for $9.6 billion last year.
"Even though the business environment is getting more difficult, the timing is actually quite favorable for us," said José María García Meyer, head of BBVA's U.S. division. "Some banks are pulling out of some markets because they don't have the liquidity or because they are refocusing on core businesses. Some are selling branches, and retrenching in businesses such as consumer or car loans. Some players will disappear."
BBVA's push mirrors the emerging presence of Spanish banks in the global arena.
Along with rival Santander, BBVA is one of the few big international banks that have been able to duck the subprime-mortgage crisis, because conservative Spanish regulation prevented financial-services companies from making significant investments outside their balance sheet.
After expanding aggressively across Latin America over the past decade, BBVA started to focus north of the Rio Grande, creating a $65 billion bank franchise that after consolidating will be No. 4 in terms of market share in Texas, behind established players such as J.P. Morgan Chase & Co., Bank of America Corp. and Wells Fargo & Co.
I think the jury is still out of whether the impact of recession in the west will be positive or negative on the emerging market economies. Certainly there will be an impact--to that extent the decoupling argument was always more rhetorical than closely reasoned.
But, recession in the west may have all kinds of beneficial results on the emerging markets countries. Those economies are generally overheated, facing more severe inflationary pressues than the developed world (because commodities, etc., are a bigger part of their consumer prices). If their exports are reduced by declining consumer demand in the West and their governments take relatively simple steps to replace the demand--not with personal consumption in the private sector, of course, but, a la Japan in the 90s, with public works, or, a la the United States in the 50s, a military buildup, or, a la every European country in teh 20th century, transfer payments, you name it--all easily accomplished in command economies--a recession over here might, perish the thought, be good for that part of the world.
Remember, those people are not wedded to a free market, they are committed to economic development, using whatever tools are most effective. Nor do they have a social commitment to increased personal consumption as a measure of economic well being. To the contrary, I think the powers-that-be are a mite concerned about the social tensions caused by all that.
"Why@ ZIRP writes:
Doesn't globalization imply tighter coupling than ever before?
Decoupling was always illogical."
To be fair, the big decoupling stories were China & the commodity/energy producers. The idea was that the europeans (and Japanese) would be able to muddle through exporting capital and luxury goods to those economies.
So far, Chinese growth remains incredibly strong by G7 standards.
...the ECB will have a holster full of ammunition to cut rates.
I think that seriously remains to be seen. The Europeans have more tolerance for unemployment (better safety net) and less for inflation (not the reserve currency). I wouldn't bet on them reacting the same way as the Yanks.
watching this strip tease unfold is way too unfun.
question of the day: why don't the US/UK/EU regulators (including FASB) simply say: no more off-balance-sheet crap. put a price on it, and disclose by the end of next month? If you guess wrong on 'level 3' assets (in either direction) you can correct it later, but your margin of error will be considered when your fitness to continue is reviewed. Lies will be prosecuted under the criminal code as well as civil.
not knowing who's got what hidden away is just making uncertainty apply to everyone. disclose or be taken in conservatorship!
Hey Phil Gramm! Looks like the Spaniards are just a bunch of whiners too.
"Anonymous writes:
The only good thing for the Spaniards is at least their currency isn't going to collapse along with their banking system and as the rest of Europe slows the ECB will have a holster full of ammunition to cut rates."
There was a wire story about a Bundesbank member telling investors in a private meeting that the Spanish (and Italians) will probably have to be booted out of the euro.
There are a number of serious issues with the structure of the euro which could come to the surface when if and when a serious crisis hits.
Two big issues - there is no mechanism for a country to leave, and the governments do not have an unlimited right to borrow from the central bank. I.e., default risk is a possibility, which is not true for any other major sovereign.
curious-er,
What are you doing here? I thought you were long gone?
I'm trying to fit this into my blackhole conundrum and think in terms of a currency backdraft (WTF that means, who can say):
Interfluidity :: The convenience yield
"JimPortlandOR writes:
watching this strip tease unfold is way too unfun.
question of the day: why don't the US/UK/EU regulators (including FASB) simply say: no more off-balance-sheet crap. put a price on it, and disclose by the end of next month? If you guess wrong on 'level 3' assets (in either direction) you can correct it later, but your margin of error will be considered when your fitness to continue is reviewed. Lies will be prosecuted under the criminal code as well as civil.
not knowing who's got what hidden away is just making uncertainty apply to everyone. disclose or be taken in conservatorship!"
If everyone knows what everyone's positions are, it would be very easy to manipulate markets to drive an otherwise viable competitor under.
So Cal housing #'s out - San Diego down 25% YOY:
"Karevoll says the region's average home price fell to $380,000. That's off more than 25 percent from last June's numbers"
Page not found | KPBS.org
Long bucky?
{This makes sense, from the link (for the story)}: crude oil futures contract is priced for oil "in flux" [pipeline], not in storage.
crispy - then that means only another 25% more to go...
Come on wake up, don't you see?
I think that is around 35% off the peak...but I would have double check.
"I wouldn't bet on them reacting the same way as the Yanks."
For their sake I hope they don't. All of these countries have seen a currency crisis, that's why Americans are going to be caught so off guard.
i was thinking 50% for s cal on average. maybe 60-70 for parts of the heinous IE...
I think the IE when all is said and done will be down 70-80% from the peak...BOOK IT!
We are all coupled now!
What's the IE?
Inland Empire - The redneck part of So cal
"Anonymous writes:
"I wouldn't bet on them reacting the same way as the Yanks."
For their sake I hope they don't. All of these countries have seen a currency crisis, that's why Americans are going to be caught so off guard."
The USD has been in a rolling set of currency crises for the past 40-50 years. They may not longer be discussed in the media, but anyone who follows the history of markets and policy making are well aware of them.
So how much do you guys think the parts of the country that have held up so far will drop? (Like NYC, or better neighborhoods in cities like Chicago, or obscure places like Idaho?)
I do think that if the Euro (and by extension the Union) are to survive the collapse of "value" that we can see evolving, it will take a lot more improvisation and creativity than they are letting on now. Spain, Greece, Ireland, all had as much if not more of California's insanity, and banks were just as free to follow as they were in the States...but being politically and economically less "tightly coupled" themselves may make a creative transition more possible. Strength in diversity (and the possibility of throwing countries out, or bringing some more in...) Where in the States the range of politically acceptable options is likely much narrower.
Well this will be crunch time for the EU.
Like the US with Articles of Confederation, individual sovereignty will not work.
Will old Europe give up national control of budgets? Or can they not???
am betting on a US of Europe.
The IE is where the wild things are.
The market does not instantly converge to an efficient level after mispricing occurs, but the adjustment process is rapid. Arbitrageurs remove many of these opportunities within minutes of them being created and the majority are gone within an hour. Arbitrage opportunities that are more difficult to find last for longer.
After reading this blog for several weeks, I think it's safe to say no one here is a fan of Adam Smith.
Sorry to state the obvious.
After reading this blog for several weeks, I think it's safe to say no one here is a fan of Adam Smith. Quite the opposite. If you've been reading, we've been ranting against bailouts for the rich!
FYI, You're not going to find a better read crowd.
Got Popcorn?
Neil
Tanya S.
NYC is an international city. And don't think it will follow US trends closely. We have a lot of foreign buyers buying in.
They top of the market, home to the Wall Street Bonus crowd will drop faster then middle of market-unlike the say San Diego market.
80? Book it, Dano!
Ambrose Evans-Pritchard already called this one: European recession looms as Spain crumbles - Telegraph
His opinion is that Europe is going to downturn worse than the US. Imagine!
Ireland , Britain and Spain all had insane property price runups ... The price appreciation in Britain out paced ours here in America if you can believe that.
This is no surprise ...
"The Wealth of Nations writes:
After reading this blog for several weeks, I think it's safe to say no one here is a fan of Adam Smith."
A friend of mine did a Ph.D. in the history of philosophy. From what I recall of my drunken philosophical discussions with him, 99% of what Adam Smith wrote has very little connection to what we worry about in present day economics. In order to understand him, you really need to understand what was happening in 18th century philosophy.
As long as we're talking about global issues...
Remember the issues with Josh Rosner of "Graham-Fisher" with the curious bona fides?
Well it appears our global nomad, Dr. Doom, Nuriel Roubini has some issues as well (maybe nothing, but worth examining nonetheless):
Here, Dr. Roubini says he was born in Iran.
Nothing found for Janera_words Php?id=44
But on his NYU c.v. page, he says he was born in Istanbul.
Also, if he was born into an Iranian family in Istanbul, then why does he have the name Roubini, which seems like some sort of italicization of the "Rubin" name? I can understand some name changing, but can't understand the Iran/Turkey dilemma.
Dr. if you read the blog could you comment? Where were you born? Don't want to trouble you with a direct email.
Rosner and Mason seem to have gotten the ball really rolling -- their paper undermined all faith in a system that didn't deserve it to begin with (shock and awe), and Roubini is like constant mortar fire, pounding the fear into us on a weekly basis, demoralizing us.
Pricey bunkers could slow down tankers again
Tankerworld.com
The world's biggest tanker company, Frontline, has said owners may soon slow their ships to offset rising bunker prices and potential rate decreases.
According to the company, Frontline itself and "several major owners" sailed 20% slower than normal toward the end of 2007 because low demand and record fuel costs was hurting margins.
No. But I am a fan of Adam Ant.
YouTube - Adam Ant "Strip"
My understanding is the Phoenix lander is in trouble on Mars.
God Uncle Billy,
Chill out dude, maybe he was adopted... gheeeze
Uncle B,
Didn't we locate a guy with red hair that was a clown, sunday night, or was that someone else?
lemonparty writes:
No. But I am a fan of Adam Ant.
I'm sure you were referring to "Desperate But Not Serious."
I live in a nice, near-end, affluent suburb of NYC. Prices here have already dropped 10-15% from peak.
Inventory is exploding, and NOTHING is moving. Realtors are dying.
And it's just the start here.
I can't believe I used to listen to Adam Ant. His vocals would not even make the Hollywood stage of American Idol and that video is so....80s....I am embarrassed to say.
Pipeline, that's not funny. Bozo actually died recently.
oops. didn't post the link to the c.v. page:
http://pages.stern.nyu.edu/~nroubini/referen.htm
WAPO
Wachovia Faces Shallow Reserves but Says It Is Raising More Capital
Wachovia Faces Shallow Reserves but Says It Is Setting Aside More Capital - washingtonpost.com
"After reading this blog for several weeks, I think it's safe to say no one here is a fan of Adam Smith."
Neither is corporate America. It's fascinating in a sickening way to watch the visible hand of the government distort markets.
I think there are six different conversations going on here at the same time--a good sign of decoupling. Maybe there is hope for the world economy.
Rich:
Seeing it here in smalltown PA as well.
Sold our 3/perhaps 4 bed house last year at $240K. Old neighbors down the street now selling theirs, side by side. Each has 4/perhaps 5 beds - one started at $300 and has dropped after 2 months to $284. Other, just on the market, is listed by local realtor who's an expert on this town, at $250K.
Call it 10 - 15% down?
Whatever.
His opinion is that Europe is going to downturn worse than the US. Imagine!
MiTurn | 07.15.08 - 10:42 pm | #
Their currency is killing them - they are generally more dependent on exports than we are. I have a business buddy over there now trying to settle down clients - exporters - they aren't settling nicely. A big plunge in the euro would make them very happy... VERY HAPPY!!!
And who ever up thread said the ECB isn't as concerned about unemployment is right - they wouldn't lose sleep if their UE went to 12% tomorrow. One mission - inflation.
The elected officials might sweat a bit though.
I would not be surprised to see the EU break up due to north-south, east-west differences.
That's why shorting bucky is so interesting - where does the hot money go after euro blows up? BTW - BOJ has shown over the decades they'll punish anyone trying to prop up the yen so it won't be there. China is resisting...
We are likely to remain the default reserve currency even though we don't deserve it.
curious-er writes:
I think there are six different conversations going on here at the same time--a good sign of decoupling. Maybe there is hope for the world economy.
curious-er | 07.15.08 - 11:02 pm | #
I used to like coupling... but that was when I was younger.
Yep: FT.com / Markets - Overview: Concerns over US economy trigger turmoil
dryfly, I hear there are pills that will help.
Dryfly:
I tried not to decouple too quickly.
Sorry to be posting all these links, but it is so. . . . interesting. Is the dollar doomed?
"For now, sentiment is also very much against the US currency. Several analysts pointed to the fact that even though Germanys ZEW economic sentiment survey was much weaker than expected yesterday, the euro still rose.
Mr Redeker says: The euro is rising not because it is a glorious currency, but because people are desperate to get out of the dollar.
FT.com / Investor's notebook - Dollar leads the ‘ugly parade’
OT/
think we should move our money from Wachovia???
Wachovia Faces Shallow Reserves but Says It Is Setting Aside More Capital - washingtonpost.com
hd43, building on what you said...prices for existing houses around the NE haven't really gotten out of control, but, the explosion of houses selling for $500k+ in an area where there really isn't much going on has been mind-blowing in the last 5-10 years.
Weirdly enough, I just found this new article right on Roubini's website -- written by Joseph Mason of Mason-Rosner fame, discussing the efficacy and mechanics of bailouts:
RGE - Lessons from Bailout History II
Even weirder (though it may happen all the time now) is that almost all of his citations are of his own papers!
Mr Redeker says: The euro is rising not because it is a glorious currency, but because people are desperate to get out of the dollar.
Reminds me of Treasuries...um, oh.
Dryfly my boy,
You win the biscuit if not a pony.
Euros is as flawed a currency as the dollar. Spain, Greece and others will be storming the palace unless the Frog Trichet REDUCES rates. It will come.
The next crises will be begger thy neighbor. Competitive devaluations and massive monitizations of commodities and Sino wage inflation.
The only countries I would invest in are Taiwan and Japan.
Pity the deflationists.
FREEDOM OF THE PRESS.
I'm sorry Ub, that was out of line but it seemed to tie together the de-decoupling problem with a previous thread, where something else was going on; sorry! I thought Schwarzchild was always on topic?
Researchers at St. Andrews University, Scotland, claim to have found a way to simulate an event horizon of a black hole - not through a new cosmic observation technique, and not by a high powered supercomputer but in the laboratory...
Synthetic Black Hole Event Horizon Created in UK Laboratory | Universe Today
"We are likely to remain the default reserve currency even though we don't deserve it."
Russia volunteered to take that roll the other day, don't think that will ever fly but I'm sure they would be thrilled to do it.
curious-er,
This is it:
YouTube - Pink Floyd - Is There Anybody Out There? (Live)
Russia volunteered to take that roll the other day, don't think that will ever fly but I'm sure they would be thrilled to do it.
Anonymous | 07.15.08 - 11:21 pm | #
That would go over big in Eastern Europe, Caucuses, Central Asia & China. I can't think of anything more dollar bullish - from a real politik perspective.
PeteinPa:
In NE, you've got all the overflow from the NYC area. $500K is cheap in their mindset.
In southern York County, PA, small towns like Shrewsbury have exploded because of the desire of DC/Balto workers to escape to lower cost areas. But those prices were nuts to the locals.
One giant seesaw.
G'night all.
Good Lord people,
Embrace reality for what is is. There will be no deflation. Deflation favors savers. And yes, paper chits or digits are created at will. The question is can they replace credit faster than it is being destroyed? Of course.
Uncle Bennie implied the dollar is dead. He cares not a whit about savers. He is absorbed in a race to save debtors. Because if debtors are forced to PAY, the system is kurplunkt...
Buy sugar or something...
Kona,
I don't think a couple of guys in Scotland will be allowed to reproduce a singularity in the lab; two guys from Florida will sue them to prevent this. And with that I think I've reached my Chandrasekhar limit.
Bond Guy wrote:
There was a wire story about a Bundesbank member telling investors in a private meeting that the Spanish (and Italians) will probably have to be booted out of the euro.
I'd love to see the link if you have it.
Thanks in advance.
I live in a nice, near-end, affluent suburb of NYC. Prices here have already dropped 10-15% from peak.
Inventory is exploding, and NOTHING is moving. Realtors are dying.
And it's just the start here.
rich | 07.15.08 - 10:55 pm | #
Trying to figure out how my in-laws just sold a home for 100K over asking. Cupertino Ca. area, good schools, but someone's either thinking it's April 1st, or has too much $.
Gretchen Morgensen on Charlie Rose now
In 2003, legendary investor Sir John Templeton said: "After home prices go down to one-tenth of the highest price homeowners paid, then buy."
Here is some background on Templeton.
I am concerned that the men behind the curtain are saving debtors and not savers. Seems bassackward.
Something about Gretchen Morgensen's eyes freaks me out...
"I am concerned that the men behind the curtain are saving debtors and not savers. Seems bassackward."
Lawn,
I am more concerned those men are only rescuing lenders, and both savers and borrowers are FUBAR.
Here, Dr. Roubini says he was born in Iran.
Nothing found for Janera_wor Words Php? id=44
But on his NYU c.v. page, he says he was born in Istanbul.
Also, if he was born into an Iranian family in Istanbul, then why does he have the name Roubini, which seems like some sort of italicization of the "Rubin" name? I can understand some name changing, but can't understand the Iran/Turkey dilemma.
You need to read better; I don't see any contradiction; at both the places you mention he's said to be born in Istanbul, Turkey. That's what it is on the resume and that's what it is at the janera.com site, to quote:
Economist Nouriel Roubini, an Iranian from Jewish descent, born in Istanbul, lived and studied in Italy, Israel and the US, divides his time working and traveling between the Middle East, Europe and US
Uncle Billy Is Befuddled
He's an US citizen now as well by the way .
You also need to get out more - You heard of the diaspora ? If you did, you wouldn't find the name variants odd.
Maybe you are just trying to create some mischief ?
-K
Ross-
"massive monitizations of commodities"
new concept for me, how would that work technically?
rich-
I also live in a semi-affluent neighborhood in NYC and couldn't agree more. Renting post sale of our building in '05.
I'm seeing rents increase, CRE tanking and panic creeping in. Looking forward to the vast quantity of empty new construction dropping rental prices. Could take a year or so though.
Yankee,
You are an optimist in my book. IMHO California prices will scream back past 1996 levels without even a sideways glance. Never before has a boom/bust cycle resulted in the total gutting of homeowner equity.
1996? Zillow doesn't go that far anymore . . . how will we know? ? ?
Good news! I think antartica is safe. So it's contained to most continents, so far at least.
Sk: no, the article says he was born in Istanbul, but if you look further down, he says in his own words: " I was born into a relatively orthodox Jewish family in Iran [my emphasis], lived in Israel and Turkey, and then moved to Italy as a child"
No mischief whatsoever intended. I'm trying to figure out who these people are and what motivates them.
Trying to figure out how my in-laws just sold a home for 100K over asking. Cupertino Ca. area, good schools, but someone's either thinking it's April 1st, or has too much $.
Cupertino is ground-zero for the Apple RDF. Apple people are raking in good money, and potentially looking for a place to live that requires a shorter drive to work. Not at all surprised by this report.
Keep an eye on that Rose fellow because I hear he likes to fag out.
Trying to figure out how my in-laws just sold a home for 100K over asking. Cupertino Ca. area, good schools, but someone's either thinking it's April 1st, or has too much $.
The latter. AAPL and GOOG have 15,000+ on-site people, up to half of them sitting on $500K+ in ITM options, looking to buy a place to live.
ziprealty sez there are 257 homes for sale between Foothill College and Wolfe.
UB,
Nice bold there.
Tip of the day. I just got back from an adult attention deficit chili cookoff, and I probably ate, maybe 30 or 50 bowls -- it was so fun. Anyway, the hot topic of the show was bank consolidation and bank failures, well, the bottom line, obviously lower yields, lower divs, lower dollar, lower treasuries and higher inflation -- what's that spell.
Anywho, this is somehwhat related to housing, which has a similar problem, which is an accelerated downside that feeds off lower prices, which feed foreclosures (in a self re-enforcing kinda feedback loop-thing) thus, we have the twin pillars there falling on each other, as oil de-couples and probably will connect by default to The Euro as the new defacto currency.
Just thought you should now, and now, back to our blackhole radius program...
I dont know if anyone ever checks out
Accrued Interest but i thought this was interesting:
Update on USA CDS
I've gotten many e-mails about CDS on the United States. I was able to find a Bloomberg ticker for the figure most often quoted (the 10-year): CT786916. Use the Currency key to bring it up. Not much history but you can at least follow it from here on in.
Anyway, heard the spread widened 2bps today to 22bps. That's not on Bloomberg yet.
Accrued Interest: Update on USA CDS
...........
gold may go further....
..........
It will be interesting to watch the EU countries fight over the value of the euro. Spain, Ireland, Greece, Italy playing as loose with their banks as the US, while the rest of the EU share the burden of their mistakes. Germany is already starting to object (preferring German euros over Spanish).
Uncle Billy IB-
no worries, no need to go bold. it's an interesting question about a fascinating man.
personally i don't know the answer about birth location, but have been following Dr. Roubini and Dr. Setser since their seminal paper in '04 or '05. far ahead of the curve in prediction and extremely forthright in the data and continuing analysis.
admirable folks to raise concern despite the expected backlash.
plus they made lotsa moolah for me from their insight.
You only have to couple once to end up SIV positive..
Welcome to the Frozen Economy
Not since the Depression have financial difficulties so immobilized spending and credit.
Uncle Billy,
You can never reach the end of your Chandrasekhar limit, because, as you will recall from geometry class: Godel's closed timelike curve.
One feature of a CTC is that it opens the possibility of a worldline which is not connected to earlier times, and so the existence of events that cannot be traced to an earlier cause.
Closed timelike curve - Wikipedia, the free encyclopedia
Kona
I don't understand the whole "angry saver" rationale. In helping debtor's isn't there also a boost given to savers? I don't know if there is a lot to complain about, I suppose I'm just obtuse, but savers also get helped too, no?
What savers? With asphalt prices going up, property taxes going up, Fed and state taxes going up, inflation going parabolic with milk at $4.00 a gallon, gas going to $5.00 and jobs caving in, housing mkt dead, bank runs....what savers?
Some of you may recall from the Kasriel thread that I was talking about buying a machine today for $3,250.
Son of mp spoke with the man again late this afternoon. Son of mp said that, as they were discussing terms, son of mp hesitated for a moment while reaching for his soda.
The guy dropped his price $250.
Son of mp said he almost choked at that point. I said, "You mean you were stunned and surprised?"
Good source of NYC RE is "The Real Deal"
NYC RE has very different characteristics then most places-mostly multifamily low % home ownership. Suburbs are mostly very different. Also with the best mass transit in US gas prices are a plus for NYC RE
Kona, CTC is an extremely useful concept for regulators. Keep it under wraps.
Sorry. Just reiterating what I read.
Support for euro in doubt as Germans reject Latin bloc notes
By Ambrose Evans-Pritchard (13/06/2008)
plschwartz-
yep, real deal is good, i tend to look at curbed mostly, fun snarky consolidator.
Curbed NY : The New York City neighborhoods and real estate blog
Not having anything better to do after the All Star game I counted the comments on CR on July 15, 2008.
How much was the economy boosted by 1602 comments generated (each read by hundreds)?
make that 1603.
pico, cr correlates negatively to boost.
tj- "Not since the Depression have financial difficulties so immobilized spending and credit."
I'll be damned. Moody's Diner. Been there. Good food.
Real people.
and some people read all 1604 of them
mp,
I'm sure dryfly would love the part about breaking the ice in the toilet.
If the cost of living increase exceeds investment returns savers get burned. If the savers have to pay with their dollars for the foolishness of debtors and lenders, they get burned. Savers have the money to rescue the debtors, who else would it be? However in the housing market debtors are getting burned too. Many savers and debtors are subject to the rotating spiral spike, except those actually being bailed out, the lenders that are too big to fail, the investment houses that are too big to fail.
I do not think that within a short period of months in recent memory have we seen the rescue of three financial firms, that if they would fail threaten the entire global financial system.
I do remember a Ray Bradbury short story about a butterfly being killed on a visit to the past, when the time traveler stepped off the designated path. Upon return to the present the time traveler found out that the spelling of words were different and the government did not seem democratic anymore.
Where and what is that dead butterfly, that puts the system into the chaotic change of state? Is the butterfly already dead?
Re: CTC is an extremely useful concept for regulators
"I'm sure dryfly would love the part about breaking the ice in the toilet."
Schadenfreude in its most highly developed form.
lawn grass-
yes, the butterfly is dead.
you can has ponie.
"alan greenspend writes:
lawn grass-
yes, the butterfly is dead.
you can has ponie."
The Butterfly effect
A Sound of Thunder - Wikipedia, the free encyclopedia
Maybe someone has a time travel machine.
Re: "you can has ponie."
Might add, puede ha ponie
Hey, I was just at the other time travel page, what a weird place here it is?
Closed timelike curve - Wikipedia, the free encyclopedia
Is that you?
I know, it is not a valid comparison, due to shift in mix, but...
...median price for a resale home in San Diego ($405K) is now at the level last seen in July 2003 ($403K).
The median price is down to levels last seen five years ago.
Here in La Jolla, median price for a resale home is down to $1.222MM, a level last seen in December 2003 ($1.143MM).
The median price here in LJ is down to levels last seen four and a half years ago.
Breaks my heart.
"Is that you?"
yes it was me. It also will be me.
Breaks my heart.
Is that sarcasm?
If I use the preview function on an empty comments text box, I can make haloscan's head explode like a machine code filled pinata. Try it it's fun.
in a future, ponie can has you.
ponies need to develop an opposable thumb to really make a go of it don't you think?
itchy-
whoa!! it did totally pinanta halo. i'm going to try something foolish...
pray tell....
ever mind, will do it on a non-critical blog with halo. way too much respect for CR and Tanta for that.
signing off...
As far as Adam Smith goes . . . the only invisible hand is the one picking our collective pockets.
Moin from Germany
this number sums it up....
"About 750,000 homes were built in Spain in 2006 -- more than in France, Germany and the U.K. combined."
When reading the next number it is important to note that France, Germany & UK have a combined population of 200 mio......
Update
Spain has roughly a population of 46 mio....
"If I use the preview function on an empty comments text box, I can make haloscan's head explode like a machine code filled pinata. Try it it's fun."
Actually, I think it's a translation of Hank Paulson's latest gibberish. For example, on Monday Paulson said:
ÄÙMð㳨«§h¦Öge.Í( é+±ú¼Yå£KvÎØ#z# °W?ãâ8íp#cG] ðoX]^Å*Eñü9cî©
To which Bernanke replied:
P¾å_7SÔÏ`ýöî¶nïF¬Ñã.ÖèÚ7¸ÞDËKÆ.½=ÊÍ)@ºáýÆ $Ü ?ÞMõ}SbÀòVÿoéþ+ ×Ó·NÞ|üì·ÁñFì¿ã.énEóîo½íÔ¡YÂú Ä»üÂV _ 9&¶á¡® Õ/íÐÐÒóý>»YýQªÛ KÓÄ?«ÊYK=e91ZÏüÞT¾¤h1Ø
When Bush heard this, he said:
lp Ë5¬w
The market has reacted to your plan by driving down Fannie Mae shares 26 percent today,'' Senator Jim Bunning, a Kentucky Republican, told the Treasury chief.Freddie Mac's are down 29 percent at this moment, just in case you are interested in how the markets are reacting to your wonderful plan.''
After a verbal lashing from senators of both parties, Paulson emphasized the urgency of the proposal.
This ``will be a great confidence-builder throughout the world, to see Republicans and Democrats, both houses come together and do something quickly here,'' he said.
Most of the subpoenas were sent last week, and some recipients are being asked for information relating only to Lehman or Bear Stearns, a person familiar with them said.
I guess I'm just a rube.
Since no one reads the posts after 11:00 pacific time, here's more fun with Roubini:
If you're in Crete and you're looking for a relaxing way to spend hours meditating on the crash of the global economy:
Roubini Hotel - Apartments in Falassarna, Kissamos, Chania, Crete, Greece.
If you're going to stay a while, you might want to decorate with Roubini Rugs:
Roubini - Custom Designer Rugs and Italian Furniture
If you have a question, you might want to ask Roubini. They have a Level 5 on yahoo answers!
Yahoo! Answers - Get answers, ask questions, find information
Another interesting thing about the name Roubini is that it is fairly common in Greece, but as a first name.
Lastly, and something all Roubini's might enjoy, Roubini Jatjistephanou starred as Aleka Spay in Panos Koutras' Sci-Fi epic "Attack of the Giant Moussaka"
The Attack of the Giant Moussaka - Wikipedia, the free encyclopedia
(that made the whole trip worthwhile)
If we witness significant demand destruction stateside does that mean it will be "contained" in the rest of the world as well?
Did I just FUBAR haloscan for everyone on the Internets? I only wanted to preview what was going on... and then when I went to post a legitimate message... crash!
Haloscan broken?
14 visitors? wake up fer christ's sake!
kjhgjhg
Dang... comment recession...
Forty to fifty creditors are going to have a lot of scurrying to do to get the June end P&L revised...
German inflation to 3.4% YoY, does Trichet hike anothe 25bp? Hard to say.
Uh, I hope I didn't break haloscan. I was only making a joke.
I guess I'm convinced I didn't do it, unless other people are seeing Haloscan comments, I'm not seeing any for any webpages...
Nice,haloscan actin up...
Chris
Halo scan is blinding me
Haloscan messed up this morning?
Haloscan ate my comments for breakfast
test
Halo? Anyone?
first
First hmmm...
More wonders:
So far we've covered, in our study of personalities that seem to have or had much influence on the economy, Mudd, Rosner, Mason, Roubini, and Gorelick. That's Jamie Gorelick? The person who just wrote an opinion piece in the NY Times?
OP-ED CONTRIBUTOR; Between Presidents, a Dangerous Gap - NY Times
Ok. Her suggestions sound all very reasonable. But check out her little bio at the end of the piece. It says she was deputy atty general. Glaring omission there: she was vice chairman of fannie mae for six years, during the Franklin Raines period.
Uncle Wiki fills in the details of the $26 Million she made, and the "allegations" of $9 Billion in unrecorded losses.
Why are the financials so cheerful this morning?
curious-er writes:
Why are the financials so cheerful this morning?
"It was better than expected," you idiot!
Those who are running down the spanish banking sector don't have a f'n clue.
RTO is exactly right that UK will face more problems from spanish RE than Spain itself. Their bubble only went nationwide in the lat year and have done well to keep it out of control (30% dow does that)
Pamplona is the only town I've been to in the last year & a half were the economy was in the dumps
Martinsa did a LBO for the much bigger Fadesa. One year later the RE market stalled and two years later the market started to collapse. In this situation banks don't want to renew credit with the entity. There are a few more campanies in similar situation.
It is interesting that as credit problems arise in Spain many blame american subprime loans. To be sure, there are a lot more subprime loans, in relative terms, in Spain than in the USA. Delinquencies are rising very rapidly. Nevertheless, the ECB keeps its window open for spanish banks that still make MBSs just to use them as collateral at the ECB facility.
tj, yes, that was sarcasm.
We are renters, purposely sitting on the sidelines since '04, here in La Jolla.
I sense that folks have quit snickering at us, and I now hear whimpering.
I call it "Economic Disaster"
Speed, re euro -
the original article was either in Handelsblatt or Financial Times Deutschland, and since then, especially with Ambrose Evans-Pritchard, it has taken on a life of its own, it seems. Sorry, couldn't find the German original, but the English language results are a true echo chamber.
But then, particularly the British press is noted for its reliable and accurate reporting about Europe.
Again, absolutely no one I know of cares in the least where their euros, bills or coins, come from. From the few people I have asked, none have had any idea why I am even asking.
The euro will face any number of challenges (let's just say that Italy managed to show that America's stupidity in re-electing an incompetent fool is not exceptional), but what the British press, especially, seems to miss is just how useful a single currency is in the world's largest market to the businesses within that market. Companies which do business throughout the eurozone were able to shave a couple of percent off their costs, and are able to plan in the long term.
A few people with fond memories of the D-mark are not going to have much impact compared to VW's or Siemen's or BASF's wishes.
I'm not quite sure how to put this - the EU has been pronounced on its deathbed pretty much since its founding more than 50 years ago, and generally, the people making the loudest proclamations have been those writing in British papers.