Hatzius says the probability of depression is 'very low' unless we see phenomenal mistakes from Fed and Government - and he doesn't expect those mistakes.
"Hatzius says the probability of depression is 'very low' unless we see phenomenal mistakes from Fed and Government - and he doesn't expect those mistakes."
He may believe that. But if he didn't believe it, he'd still say it. Wall Street economists never say, "Doom is just around the corner." Even if it is.
Lovely choices. The only one not part of the group that got us into this mess is a misogynist who thinks women just aren't as smart as men. Hardly new thinking.
$500 billion stimulus package? To buy imported consumer goods?
How about $500 billion to infrastructure and alternative energy projects, right now? If some of it was wasted, at least it'd be wasted in the right direction.
"Wall Street economists never say, "Doom is just around the corner." Even if it is.
Supposedly, Paulson told Congress exactly that. And they panicked, banned short selling, and passed a bailout."
I stand corrected. I should say, "Wall Street economists never say, "Doom is just around the corner. Except in private, to the government, in hopes of a bailout."
We are still seeing both leveraging and deleveraging at work. It means whole mixed portfolios of stocks, bonds, gold, oil, etc. are being accumulated (with leverage) and liquidated in waves.
I think at some point, it starts to break apart, so that stocks and bonds sink while commodities rise. But it hasn't broken apart yet in oil, gold and most commodities. You can just see the highly leveraged portfolios blowing up almost in real time.
The one place I'm starting to see some breaking apart is in silver. It doesn't seem to be blowing up as much as stocks or other commodities, at least in the past week. It might indicates new demand.
Still hoping for a non-Wall Street / non-money center bank person - somebody who hasn't been deeply involved in the last 7 years of financial stupidity.
PEBO (president elect barack obama) has inherited a total economic nightmare. feckless inaction will make it worse, ill-conceived fixes will make it worse, the perfect plan will make it bearable but it will still be ugly. So....three things can happen and two of them are really, really bad and one is darn bad. methinks PEBO is in for a horrific time no matter what he does. It's just the luck of the draw he got, let's see what he does with it.
Hatzius says the probability of depression is 'very low' unless we see phenomenal mistakes from Fed and Government - and he doesn't expect those mistakes.
You mean like issuing so much new debt that the market balks?
Anderson said he spent less than $200 on his campaign, which begs the question: If he'd spent $300, could he have won 15 percent of the 6th District vote?
For anyone who wants great ideas and historical data about mixing commodities into a portfolio, this month's issue of the Journal of Indexing has really great stuff. See especially the article on the Benefits of Low Correlation: Round II.
re: Depression
Ease up, we won't see any calls for a depression until everyone sees Asia blow up. So give Asia a year to live through reality, and then about another year before they publicly report it.
vilHenryPaulson writes:
re: Depression
Ease up, we won't see any calls for a depression until everyone sees Asia blow up. So give Asia a year to live through reality, and then about another year before they publicly report it.
The velocity of information will be the undoing of any coordinated effort to stave off a China crisis. All those trillions in China? Just try and find them when TSHTF. You don't think their generals cum factory managers are so stupid as to not have their finger poised over the electronic funds transfer button 24x7 do you?
"Q&A: Hatzius says the probability of depression is 'very low' unless we see phenomenal mistakes from Fed and Government - and he doesn't expect those mistakes.
Hmmn. He must be an optimist.....
Lot's of short term debt that has to be rolled in the next few years. If the Fed was smart they'd load up on TBT...
Bloomberg had another piece this AM regarding Chinese central bank wants local banks to lend but locals are refusing because they want to protect their capital...heh...where have I heard that before. China may have more difficulty with fiscal stimulus than we have been led to believe.
Hatzius says the probability of depression is 'very low' unless we see phenomenal mistakes from Fed and Government - and he doesn't expect those mistakes.
I put a little more stock in Roubini's "animal spirits recession" call. Obama has his work cut out for him.
Maybe it should be someone that can speak some Asian lingo..
Re: As an example, in Canada: "McCallum, a former chief economist with the Royal Bank of Canada, is the Liberal finance critic and is also bilingual." Nova Scotia News - TheChronicleHerald.ca
Being Bi doesn't mean a person is a superior intellect, but what we don't need is someone that just speaks wall street bonus language and bribe-speak and crooked, corrupt, insider shitbag with connections to chains of money laundering.
I occasionally see reference to JPM's book of derivetives which absolutely dwarfs any other financial institution on earth, although I am not knowlegable enough to fully understand the implications. I have seen numbers like over $90T in notional value. I find it more than a little disturbing that their CEO could be Treas Sec.
Yep, like the last one, timed to exactly coincide with the oil companies' annual Memorial Day gallon gouge. If the Democrats want to give a half trillion to Exxon-Mobil, why don't they just do it directly?
With the new President, we'll change all that's bad and everything will be all right then. The old and bad is practically over. That's just the right thing for Optimistic Joe who is currently very optimistic at least for the near-term.
O-Joe
Originally one of the youngest economics professors in the history of Harvard University, Sachs became renowned for his work on the challenges of economic development, environmental sustainability, poverty alleviation, debt cancellation, and globalization.
Start a new program, the Civilian Blogging Corps. Anyone who is unemployed can join the program and be paid minimum wage to write blog postings. The program is funded via paid advertising, with not less than 5% of all ad space dedicated to public service announcements and political campaign ads.
Also, start a new program, the Web Projects Administration, whose purpose in life is to wade through the crap created by the Civilian Blogging Corps, and delete anything that's considered stupid, offensive, or not in the best interests of TPTB.
In economics, shock therapy refers to the sudden release of price and currency controls, withdrawal of state subsidies, and immediate trade liberalization within a country, usually also including large scale privatization of previously public owned assets. Prominent economist Jeffrey Sachs was among the foremost proponent of shock therapy for several emerging economies although others have traced the concept back even further.[1] Occasionally the term is used to refer to any significant program of pro-market reforms, such as those instituted in Chile in 1975.
Larry Summers is currently a managing director at one of the biggest hedge funds in the world -- D. E. Shaw & Co. -- although apparently he is only part time. Lawrence Summers - Wikipedia, the free encyclopedia
I would like to see a "Son of TARP" teller window set up in the LV airport where arriving passengers can go to withdraw up to $5k to invest wisely in the future of America.
I say "up to" because as we all know many Americans would be cautious and behave with some measure of restraint, right ?
Also, start a new program, the Web Projects Administration, whose purpose in life is to wade through the crap created by the Civilian Blogging Corps, and delete anything that's considered stupid, offensive, or not in the best interests of TPTB.
Here, then, is an agenda for Bretton Woods II. First, we need to restructure global finance, based on an expanded system of capital adequacy standards, financial reporting, system-wide risk management, and new lender-of-last-resort capacities. Derivatives traders, hedge funds, and broker dealers would be brought under regulatory control. The IMF would be empowered to be a true global lender of last resort (as I urged a dozen years ago, warning of the threat of self-fulfilling panics). To make this possible, a small tax on financial transactions - a Tobin tax - would be implemented to expand the IMF's war chest in case of crisis and to fund other urgent international needs.
Rob Dawg writes:
Can we keep making the same mistakes with a new administration?
"Yes We Can"
Rob Dawg | Homepage | 11.05.08 - 12:16 pm | #
Exactly, but remember the RFC was started in the Hoover administration and wasn't effective until FDR cleaned it up and greatly expanded it. We could see something similar happen in the Obama years.
Rich, been short commodities and shares since April. I'll might listen to you down at 25 oil. See you down there.
2. Goldman Sachs should do a crash weekend course in classical econ for their top people. They would be bankrupt without taxpayer assistance, make terrible forecast and still don't get it.
Hatzius says the probability of depression is 'very low' unless we see phenomenal mistakes from Fed and Government
Y'know, I'm as liberal as anybody here... but my take from all the Great Depression arguments is that both sides must be wrong.
See, say you get your ass kicked - what happened to America in the Great Depression.
There are enough well-spoken arguments on both sides about the causes and escape out of the GD that I conclude they are all wrong.
What I do believe was that the government set up structures that would prevent the situation arising again.
This is avoiding another encounter with the big guy.
Which is different than getting to a point where you can actually whip the big guy.
Hatzuis implies that the Fed & Government can whip the big guy. I am not so sanguine. I think we may very well take some serious lumps and just have to learn from them -- and no way all the lessons are over.
bearly writes:
Volcker's austerity is so 20th Century. We need change!
Volcker is a modern man - older but still modern... he has said a number of times he WOULD NOT do the same thing today that he did in 1980. We had far less debt and was still a net saving vs. debtor then. And we were still a net exporter.
So don't look to Volcker to save our sorry ass. We've dug one helluva a hole since his time at the Fed.
Q: How do you respond to critics who say the massive bailout programs will lead to big government, smacking of socialism?
A: This is not socialism. Socialism cares about people. The Bush administration doesn't care about people. Socialism would begin by trying to take care of the people losing their homes, about the workers. This administration is what is called "corporate welfare-ism," not socialism. It's trying to help corporations, not people.
Q: Will we see a further decline of the dollar in the future and will we see the advent of a dual-currency system?
A: It's clear that the role of the United States, as a reserve currency (nation), maybe even the role as the (world's primary) financial market, is going to be diminished ... still there, but it will be diminished.
But I've argued in my book "Making Globalization Work" that moving from a dollar reserve to a two- or three-currency reserve, would lead to a more unstable system. We need a global reserve system, and that's what I advocate in the book.
We need a multilateral system that doesn't depend on any currency. If you have two, then if there's a problem in the United States, everybody will run to the euro. And if there's a problem in Europe, everyone runs to the United States. You'll get a lot of volatility.
'Bretton Woods moment'
Q: Are you saying that we would need a "currency basket" in order to secure stability?
A: (What is needed is) Bringing all the currencies, like the SDRs (special drawing rights), but SDRs have only been periodic. Make this more permanent.
Sorry if this is a repeat, but how about Michael Alix, former risk officer for Bear Stearns. he's already on the payroll...
I yield to the WSJ:
* NOVEMBER 5, 2008
A Bear Stearns 'Risk' Expert Joins the Fed
By MICHAEL S. DERBY
NEW YORK -- In a twist, the Federal Reserve Bank of New York has hired the former chief risk officer of Bear Stearns Cos., the Wall Street firm it was forced to save last spring.
...
"The Fed is not only the lender of last resort, it's also the employer of last resort," said Paul Kasriel, an economist at the Northern Trust who is a frequent critic of the central bank.
Tom Schlesinger, who leads the central bank watchdog group Financial Markets Center, said, "I don't think catastrophic failure has been so rewarded in the annals of Federal Reserve history."
See and experience: Slowly, George realizes that Clarence is right. But he feels that if he can just find Mary, things will be back to normal. Mary is discovered as an old maid librarian, a sad, lonely, frightened and plain widow without a spring or joyfulness in her step. Her hair is tied back tightly, and she wears unsightly spectacles. George approaches toward her as she closes up the library, pleading and begging Mary to help him, but she doesn't recognize him and screams to get away from him. In a panic, she runs from George when he accosts her. Bert comes to her defense, but is knocked to the ground. His fears deepened, George flees from the center of town, with gunshots ringing in his ears.
PEBO (president elect barack obama) has inherited a total economic nightmare. feckless inaction will make it worse, ill-conceived fixes will make it worse, the perfect plan will make it bearable but it will still be ugly. So....three things can happen and two of them are really, really bad and one is darn bad. methinks PEBO is in for a horrific time no matter what he does. It's just the luck of the draw he got, let's see what he does with it.
Don't fret, Obama will change the world and hope springs eternal.
No need for the negative nancy's anymore, our savior is at hand.
The economy is fine and with Obama in office I am absolutely POSITIVE he will make wise and sound decisions and our elected officials will no longer allow the rampant corruption to continue.
I give it 12 months before the disillusionment sets in and people realize that he is not "The One"
E.g: William R. Cline, writing for the Peterson Institutes new blog, says lending will remain constrained. It seems likely, however, that bank credit expansion will remain far below the pace of recent years even with the new recapitalization plan. Peter Boone, Simon Johnson and James Kwak write in the Washington Post that the government will have to take a stronger hand. The United States, in contrast, is putting the full credibility of its balance sheet behind banks but giving them free rein to move on.
If Obama 'leaves' office while he is still considered 'the one,' he will go down as the most overrated Pres since JFK. And then America can excuse its fall as being caused rather than earned and dream about what might have been if only the domestic terrorists had been dealt with earlier.
Then President Biden can get busy cleansing America and we will all understand or be quiet.
"Patriotic Americans" will be the new "good Germans."
And our descent into hell can accelerate while those with power continue their grab.
The status quo will survive even as we cry at a memorial and call it change.
Why@ ZIRP writes:
Generalisimo Gerkinov writes:
Yeah, Jeebus is pretty clear about his stand on all things financial.
Generalisimo Gerkinov | 11.05.08 - 12:32 pm | #
They always seem to leave this one out Parable of Talents
The Republicans have rushed an order for "Obamanation" T-shirts, taking advantage of the bounce they got from the GOP crowd reaction to McCain's concession speech.
I have been pushing this since last April; Treasury Secretary Paulson, FDIC
Chair Blair have come out in favor (as has Shadow Financial Regulatory
Committee)but still dont have it; need it ASAP.
dding in the $700 billion approved for the Wall Street bailout, the government potentially could wind up investing more than $1 trillion in the private sector.
With so much already on their plate, financial regulators may not have had time to work out every detail on how to unwind their investments, according to George G. Kaufman, a finance professor at Chicago's Loyola University and co-chairman of the Shadow Financial Regulatory Committee.
"I think the administration spent so much time just working out the entrance strategy, given the crisis they were facing, to worry too much about the exit," he said.
It is important to get out in front of our President-elect and slam him before he's performed a single action in office or even taken the Oath. The American people have resoundingly asked for a change in policy, but it's crucial that we act NOW to make sure that that change fails, regardless of the costs to the country.
We have elections to win in a few years, you know.
The Iranian regime, as well as al-Qaeda leaders, may view Obama's emphasis on engagement and negotiation as a sign of faltering U.S. resolve, said Danielle Pletka, an analyst at Washington's American Enterprise Institute and a former staff member of the Senate Foreign Relations Committee.
Perception of Weakness
What we think of as multilateralism and internationalism is perceived as weakness by some,'' Pletka said.The problem is that those who perceive it that way are most likely to try to take advantage of it.''
There is wide agreement that Obama will embody a perceptual change in America's face to the world -- partly because he will be the first black president, partly because of life experiences that include a Kenyan father and a boyhood spent in Indonesia, and partly because he isn't Bush.
The Shadow Financial Regulatory Committee also took a stand against new restrictions on short-selling and recommended that the government liquidate Fannie Mae once the market for mortgage financing has stabilized. The federal government took over the two quasi-private mortgage giants earlier this month.
This way lies madness. You could do similar math for the defense budget but I don't think too many people would say we aren't getting our money's worth there.
Our company is managed by a team of mortgage industry veterans led by Stanford L. Kurland, and is based in Calabasas, California. PNMACs strategic partners are BlackRock and Highfields Capital Management.
27001 AGOURA ROAD
CALABASAS CA \t91301
/s/Jeffrey Grogin, on behalf of Private National Mortgage Acceptance Company, LLC \t8/21/08
Also see: It would be a shame to see Circuit City disappear, but perhaps their own management is to blame given their history of refusing buyout offers the company turned down an $8 a share offer in 2003 and $17 per share in 2005 from Highfields Capital Management, and recently blew a shot at being acquired by Blockbuster for at least $6 a share.
Mortgage Applications : The weekly MBA mortgage applications index plunged 20.3% l(lowest in nearly 8 years according to Bloomberg) ast week with refis down 27.8% and purchasing applications down 13.9%. The fixed 30-yr mortgage rate rose to 6.47% (+21 basis points) while the 15-yr popped to 6.14% (+13 bps) & 1-yr adjustable rate mortgages dipped to 6.86% (-4 bps).
I hope that he selects someone from the "real" economy (i.e. non-financial industry). The bankers have had their run, time for those who add true value to the US economy to have a shot.
"I hope that he selects someone from the "real" economy (i.e. non-financial industry). The bankers have had their run, time for those who add true value to the US economy to have a shot."
CR: Would you consider changing the title of these posts to "Credit Opportunity Indicators?" Crisis is so 2000-2008. We're all unifying now and I hope you'll do your part.
Hopefully he will not choose these persons. They were in under Clinton, when Glass Stegal was destroyed. The represent old banking interests -- the reason we are in bad shape today. I have great hope for Obama, but this would not be a good sign.
Will the new stimulus be based on 2008 income, which is not yet knowable? I made way too much in 2007 to qualify for the first stimulus giveaway. I made around $1M shorting stocks and gambling in 2007. I paid federal taxes in proportion to the total tax revenues that would be equivalent to a $10K share of the cost of that stimulus package. Therefore, my actual stimulus was quite negative.
I might managed to keep my household income under $150K in 2008. If I can fit under the cap, I might get a taste of the next stimulus package.
Well aside from CR, I think Summers is probably the best bet among the names being tossed around, although Buffet might be an interesting pick if he is interested in the job. I would love to see Tanta tapped as head of OFEHO or perhpas comptroler of the currency. Steglitz would be my top pick for CEA, although PK would also be an inspired choice. Perhaps a undersecratary role for a guy like Brad DeLong. I'm guessing that Spitzer and Edwards are out of the running for AG or head of SEC. However, Andy Cuomo would make a good choice for head of SEC. How about naming Al Gore to head either Interior or the EPA. Bill Richardson would be a good pick for Sec of State. Put Dennis Kuchinch in as head of HUD.
Hmmm.
Optimists, all of them.
Do we really need a Treasury Secretary after what the last one has accomplished? No thank you.
how about Jan Hatzius?
......
O inherited a mess...even Jebus would have a hard time cleaning up after GW
CR - Care to throw your hat in the ring ?
I just hope it is not someone from Glodman Sachs...they have done enough damage to this country already.
Hatzius says the probability of depression is 'very low' unless we see phenomenal mistakes from Fed and Government - and he doesn't expect those mistakes.
Based on what, their great track record so far?
You want change?
Secretary Jain
That's the hard truth we need.
Dick Fuld is also looking for a gig. I'd love to see his overtime play against the foes that left him out of 'the club."
I nominate anybody but Paulson.
I nominate Summers.
He needs to suffer for some of the stuff he pulled as an undersecretary last time.
CEA head should be Krugman. We need some serious international panic folks to be ready to respond to our disintegrating international trade situation.
Or the dollar is toast much faster than most anticipate.
Further, we need massive stimulus to push through the state and local governments to keep the economy moving.
Right now we are rapidly approaching stall speed on a lot of economic indicators, and a stall will cause a lot of systemic damage.
Push hard, and damn the 2010 inflation numbers!
Someday this war's gonna end...
$500B stimulus package? Insane.
What about Mozilo? He is also currently in the job market...
"Hatzius says the probability of depression is 'very low' unless we see phenomenal mistakes from Fed and Government - and he doesn't expect those mistakes."
He may believe that. But if he didn't believe it, he'd still say it. Wall Street economists never say, "Doom is just around the corner." Even if it is.
Well, Roach. But he's safely in China.
Lovely choices. The only one not part of the group that got us into this mess is a misogynist who thinks women just aren't as smart as men. Hardly new thinking.
How does he define "very low"?
I think there's a >= 10% chance of a depression. Which I think is pretty high.
$500 billion stimulus package? To buy imported consumer goods?
How about $500 billion to infrastructure and alternative energy projects, right now? If some of it was wasted, at least it'd be wasted in the right direction.
Wall Street economists never say, "Doom is just around the corner." Even if it is.
Supposedly, Paulson told Congress exactly that. And they panicked, banned short selling, and passed a bailout.
Jan 20th can't come soon enough.
I second the nomination of Jas Jain...
I nominate Poppy Harlow.
Maybe Cayne from BS is around...pass the weed
I think there's a >= 10% chance of a depression. Which I think is pretty high.
RhodesianGreenbackinAZ
Seriously. If there is a five percent chance I'm going to get in a car accident on the way home thats too much for me. The same with a depression....
.....
Herro Poppy!
(had to google her)
"Wall Street economists never say, "Doom is just around the corner." Even if it is.
Supposedly, Paulson told Congress exactly that. And they panicked, banned short selling, and passed a bailout."
I stand corrected. I should say, "Wall Street economists never say, "Doom is just around the corner. Except in private, to the government, in hopes of a bailout."
So the Treasury issuing $500bn per quarter is going to become the baseline norm now?
re: markets, didn't expect the negative day, but not worried enough to back off the call of a bear market rally
Concur. Anyone except current or former GS employee.
OT
We are still seeing both leveraging and deleveraging at work. It means whole mixed portfolios of stocks, bonds, gold, oil, etc. are being accumulated (with leverage) and liquidated in waves.
I think at some point, it starts to break apart, so that stocks and bonds sink while commodities rise. But it hasn't broken apart yet in oil, gold and most commodities. You can just see the highly leveraged portfolios blowing up almost in real time.
The one place I'm starting to see some breaking apart is in silver. It doesn't seem to be blowing up as much as stocks or other commodities, at least in the past week. It might indicates new demand.
Still hoping for a non-Wall Street / non-money center bank person - somebody who hasn't been deeply involved in the last 7 years of financial stupidity.
PEBO (president elect barack obama) has inherited a total economic nightmare. feckless inaction will make it worse, ill-conceived fixes will make it worse, the perfect plan will make it bearable but it will still be ugly. So....three things can happen and two of them are really, really bad and one is darn bad. methinks PEBO is in for a horrific time no matter what he does. It's just the luck of the draw he got, let's see what he does with it.
CR
I was wondering, did you know people at Goldman before hand or did this blog facilitate the introductions?
A 'no comment' reply is quite acceptable I just thought it would be supper interesting if they "found you" thru the blog...
Hatzius says the probability of depression is 'very low' unless we see phenomenal mistakes from Fed and Government - and he doesn't expect those mistakes.
You mean like issuing so much new debt that the market balks?
it would also be super interesting...
They could dust off Paul Volker.
If your not too burned out on politics, here is the best story of the day:
What about Bob? Michele Bachmann owes re-election to third-party unknown
MinnPost - What about Bob? Michele Bachmann owes re-election to third-party unknown
Anderson said he spent less than $200 on his campaign, which begs the question: If he'd spent $300, could he have won 15 percent of the 6th District vote?
OT
For anyone who wants great ideas and historical data about mixing commodities into a portfolio, this month's issue of the Journal of Indexing has really great stuff. See especially the article on the Benefits of Low Correlation: Round II.
Journal Of Indexes
re: Depression
Ease up, we won't see any calls for a depression until everyone sees Asia blow up. So give Asia a year to live through reality, and then about another year before they publicly report it.
Nouriel Roubini
I, Килгор Траут, do hereby nominate Joe The Plumber, with his vast knowledge of the homeland, to be Secretary of Treasury.
Cordially,
Килгор Траут
"Generalisimo Gerkinov writes:
They could dust off Paul Volker."
Probably unrealistic, but it appeals to me. We need a SecTreas who actually scares Wall Street.
Secretary Jain
You don't put your prophets in office.
Maybe we could join the EU?
I think Summers is the guy.
Rubin has baggage especially since he is on Citi's board.
Summers doesn't really have that.
Volker is too old.
Geithner is too hard to tap, as it then means we need to find a new Fed President.
Jamie Dimon has the same baggage that Rubin does (part of banking cartel)
So Summers it is (IMO)
I can only hope he doesn't pick Dimon. The last thing this country needs is another corporate crook to steer fiscal policy...
Generalisimo Gerkinov writes:
They could dust off Paul Volker.
Please stop all the Volcker nonsense.
The election is over, the window dressing can be put away now. Only Keynesians need apply in a Obama administration.
vilHenryPaulson writes:
re: Depression
Ease up, we won't see any calls for a depression until everyone sees Asia blow up. So give Asia a year to live through reality, and then about another year before they publicly report it.
The velocity of information will be the undoing of any coordinated effort to stave off a China crisis. All those trillions in China? Just try and find them when TSHTF. You don't think their generals cum factory managers are so stupid as to not have their finger poised over the electronic funds transfer button 24x7 do you?
Thanks for the info rich.
"Q&A: Hatzius says the probability of depression is 'very low' unless we see phenomenal mistakes from Fed and Government - and he doesn't expect those mistakes.
Hmmn. He must be an optimist.....
Lot's of short term debt that has to be rolled in the next few years. If the Fed was smart they'd load up on TBT...
From what I understand, China's economy is melting down as we speak (so to speak).
Perhaps a Sarah Palin-like nobody from nowhere, with fresh sassy ideas with nice clothing, like Jas?
Bloomberg had another piece this AM regarding Chinese central bank wants local banks to lend but locals are refusing because they want to protect their capital...heh...where have I heard that before. China may have more difficulty with fiscal stimulus than we have been led to believe.
Jas only wears dhotis.
(FD I like Jas too....)
Government can either borrow money or print it. Either way, it cannot create wealth and cannot prevent a depression.
Buckle your seat belts. This sucker is going down.
Hatzius says the probability of depression is 'very low' unless we see phenomenal mistakes from Fed and Government - and he doesn't expect those mistakes.
I put a little more stock in Roubini's "animal spirits recession" call. Obama has his work cut out for him.
Volcker's austerity is so 20th Century. We need change!
How about something truly BOLD ? Shock & Awe ! I like a $2 TRILLION stimulus for everything under the sun.
Wall St will SKYROCKET under such reckless abandon.
Agree with nades... Jas is not the type with fancy clothing.
bearly i like your vision!
Maybe it should be someone that can speak some Asian lingo..
Re: As an example, in Canada: "McCallum, a former chief economist with the Royal Bank of Canada, is the Liberal finance critic and is also bilingual."
Nova Scotia News - TheChronicleHerald.ca
Being Bi doesn't mean a person is a superior intellect, but what we don't need is someone that just speaks wall street bonus language and bribe-speak and crooked, corrupt, insider shitbag with connections to chains of money laundering.
bearly writes:
Volcker's austerity is so 20th Century. We need change!
How about something truly BOLD ? Shock & Awe ! I like a $2 TRILLION stimulus for everything under the sun.
Are you available for SecTreas? I hear O is looking for someone with just your vision....
We need a woman in the post for balance.Would Jas consider a sex change?
I occasionally see reference to JPM's book of derivetives which absolutely dwarfs any other financial institution on earth, although I am not knowlegable enough to fully understand the implications. I have seen numbers like over $90T in notional value. I find it more than a little disturbing that their CEO could be Treas Sec.
The Big Picture
Larry Summers supposedly once said that agriculture doesn't matter because it is only 4 percent of the economy. The guy is a retard.
Weltmeister Rubin:
Rubin 30/60/II/3 gross
$500 billion stimulus package?
Yep, like the last one, timed to exactly coincide with the oil companies' annual Memorial Day gallon gouge. If the Democrats want to give a half trillion to Exxon-Mobil, why don't they just do it directly?
Any ideas where Goolsbee (sp?) will land in the Obama admin?
Well,
With the new President, we'll change all that's bad and everything will be all right then. The old and bad is practically over. That's just the right thing for Optimistic Joe who is currently very optimistic at least for the near-term.
O-Joe
We can change recession!
Re: "Would Jas consider a sex change?"
That doesn't seem to be a rhetorical Q?
What about this hack?
Originally one of the youngest economics professors in the history of Harvard University, Sachs became renowned for his work on the challenges of economic development, environmental sustainability, poverty alleviation, debt cancellation, and globalization.
My proposal for saving the economy:
Start a new program, the Civilian Blogging Corps. Anyone who is unemployed can join the program and be paid minimum wage to write blog postings. The program is funded via paid advertising, with not less than 5% of all ad space dedicated to public service announcements and political campaign ads.
Also, start a new program, the Web Projects Administration, whose purpose in life is to wade through the crap created by the Civilian Blogging Corps, and delete anything that's considered stupid, offensive, or not in the best interests of TPTB.
I may already have earned $.25 for this comment!
In economics, shock therapy refers to the sudden release of price and currency controls, withdrawal of state subsidies, and immediate trade liberalization within a country, usually also including large scale privatization of previously public owned assets. Prominent economist Jeffrey Sachs was among the foremost proponent of shock therapy for several emerging economies although others have traced the concept back even further.[1] Occasionally the term is used to refer to any significant program of pro-market reforms, such as those instituted in Chile in 1975.
Shock therapy (economics) - Wikipedia, the free encyclopedia
Can we keep making the same mistakes with a new administration?
"Yes We Can"
John S writes:
$500 billion stimulus package?
Remember, this is Goldman Sachs speaking.
Maybe it's wishful thinking.
Larry Summers is currently a managing director at one of the biggest hedge funds in the world -- D. E. Shaw & Co. -- although apparently he is only part time. Lawrence Summers - Wikipedia, the free encyclopedia
Any idea if that would affect his viability?
YouTube - Nas - Black President [Video & Lyrics] New!!!
I would like to see a "Son of TARP" teller window set up in the LV airport where arriving passengers can go to withdraw up to $5k to invest wisely in the future of America.
I say "up to" because as we all know many Americans would be cautious and behave with some measure of restraint, right ?
crispy&cole writes:
O inherited a mess...even Jebus would have a hard time cleaning up after GW
crispy&cole | 11.05.08 - 11:40 am | #
Obviously you didn't listen in Sunday School - Jeebus has an answer for that too... But Larry Kudlow would NOT approve.
upside risk to Goldman unemployment forecast (peak of 8.0%
Hogwash Double digit unemployment (10%) with the shadow figure higher due to the illegal and "under the table" unemployed...
PapaSloth writes:
Also, start a new program, the Web Projects Administration, whose purpose in life is to wade through the crap created by the Civilian Blogging Corps, and delete anything that's considered stupid, offensive, or not in the best interests of TPTB.
That part should be easy enough.
Amid the rubble of global finance, a blueprint for Bretton Woods II
Jeffrey Sachs
The Guardian, Tuesday October 21 2008
Jeffrey Sachs: Durable reform must tackle climate change and world poverty as well as market regulation |
Comment is free |
The Guardian
Here, then, is an agenda for Bretton Woods II. First, we need to restructure global finance, based on an expanded system of capital adequacy standards, financial reporting, system-wide risk management, and new lender-of-last-resort capacities. Derivatives traders, hedge funds, and broker dealers would be brought under regulatory control. The IMF would be empowered to be a true global lender of last resort (as I urged a dozen years ago, warning of the threat of self-fulfilling panics). To make this possible, a small tax on financial transactions - a Tobin tax - would be implemented to expand the IMF's war chest in case of crisis and to fund other urgent international needs.
With a sexy up-'do and some saucy librarian glasses, Jas would have 20% of America in the palm of his hand.
I just want to hear him grilled by the dopes in Congress and go Indian Johnny Cochran on 'em.
Rob Dawg writes:
Can we keep making the same mistakes with a new administration?
"Yes We Can"
Rob Dawg | Homepage | 11.05.08 - 12:16 pm | #
That was funny...
Rob Dawg writes:
Can we keep making the same mistakes with a new administration?
"Yes We Can"
Rob Dawg | Homepage | 11.05.08 - 12:16 pm | #
Exactly, but remember the RFC was started in the Hoover administration and wasn't effective until FDR cleaned it up and greatly expanded it. We could see something similar happen in the Obama years.
Rich, been short commodities and shares since April. I'll might listen to you down at 25 oil. See you down there.
2. Goldman Sachs should do a crash weekend course in classical econ for their top people. They would be bankrupt without taxpayer assistance, make terrible forecast and still don't get it.
How about Jim Cramer holding conjur bag?
Or the accountant of the rainbow push coalition....
Calypso Louie Farrakahn, he'd straighten all those corrupt wall streeters out....
can i get a witness?
Best overnight statistical analysis: Red State, Blue State, Rich State, Poor State » Election 2008: what really happened
Y'know, I'm as liberal as anybody here... but my take from all the Great Depression arguments is that both sides must be wrong.
See, say you get your ass kicked - what happened to America in the Great Depression.
There are enough well-spoken arguments on both sides about the causes and escape out of the GD that I conclude they are all wrong.
What I do believe was that the government set up structures that would prevent the situation arising again.
This is avoiding another encounter with the big guy.
Which is different than getting to a point where you can actually whip the big guy.
Hatzuis implies that the Fed & Government can whip the big guy. I am not so sanguine. I think we may very well take some serious lumps and just have to learn from them -- and no way all the lessons are over.
bearly writes:
Volcker's austerity is so 20th Century. We need change!
Volcker is a modern man - older but still modern... he has said a number of times he WOULD NOT do the same thing today that he did in 1980. We had far less debt and was still a net saving vs. debtor then. And we were still a net exporter.
So don't look to Volcker to save our sorry ass. We've dug one helluva a hole since his time at the Fed.
Do I hear SPX 760 ?
a different chris,
except china and so many other countries we depend on for equilibrium...
here we are freaking at 2% FC's in the housing market, where during the GD it was 50-60%...
And govt intervention made it worse..
this crisis is something different entirely...
IMHO of course
INTERVIEW/ Joseph Stiglitz: Crisis points to need for new global currency
http://www.asahi.com/english/Herald-asahi/TKY200811050060.html
Q: How do you respond to critics who say the massive bailout programs will lead to big government, smacking of socialism?
A: This is not socialism. Socialism cares about people. The Bush administration doesn't care about people. Socialism would begin by trying to take care of the people losing their homes, about the workers. This administration is what is called "corporate welfare-ism," not socialism. It's trying to help corporations, not people.
Q: Will we see a further decline of the dollar in the future and will we see the advent of a dual-currency system?
A: It's clear that the role of the United States, as a reserve currency (nation), maybe even the role as the (world's primary) financial market, is going to be diminished ... still there, but it will be diminished.
But I've argued in my book "Making Globalization Work" that moving from a dollar reserve to a two- or three-currency reserve, would lead to a more unstable system. We need a global reserve system, and that's what I advocate in the book.
We need a multilateral system that doesn't depend on any currency. If you have two, then if there's a problem in the United States, everybody will run to the euro. And if there's a problem in Europe, everyone runs to the United States. You'll get a lot of volatility.
'Bretton Woods moment'
Q: Are you saying that we would need a "currency basket" in order to secure stability?
A: (What is needed is) Bringing all the currencies, like the SDRs (special drawing rights), but SDRs have only been periodic. Make this more permanent.
"Do I hear SPX 760 ?"
I'll take SPX Bottom for 750 Alex.
Sorry if this is a repeat, but how about Michael Alix, former risk officer for Bear Stearns. he's already on the payroll...
I yield to the WSJ:
* NOVEMBER 5, 2008
A Bear Stearns 'Risk' Expert Joins the Fed
By MICHAEL S. DERBY
NEW YORK -- In a twist, the Federal Reserve Bank of New York has hired the former chief risk officer of Bear Stearns Cos., the Wall Street firm it was forced to save last spring.
...
"The Fed is not only the lender of last resort, it's also the employer of last resort," said Paul Kasriel, an economist at the Northern Trust who is a frequent critic of the central bank.
Tom Schlesinger, who leads the central bank watchdog group Financial Markets Center, said, "I don't think catastrophic failure has been so rewarded in the annals of Federal Reserve history."
Summers doesn't have a very good history with opinionated people of color.
Yeah, Jeebus is pretty clear about his stand on all things financial.
Re: "saucy librarian glasses"
Clarence...Where's Mary?
YouTube - Clarence...Where's Mary?
See and experience: Slowly, George realizes that Clarence is right. But he feels that if he can just find Mary, things will be back to normal. Mary is discovered as an old maid librarian, a sad, lonely, frightened and plain widow without a spring or joyfulness in her step. Her hair is tied back tightly, and she wears unsightly spectacles. George approaches toward her as she closes up the library, pleading and begging Mary to help him, but she doesn't recognize him and screams to get away from him. In a panic, she runs from George when he accosts her. Bert comes to her defense, but is knocked to the ground. His fears deepened, George flees from the center of town, with gunshots ringing in his ears.
the man from nantucket writes:
PEBO (president elect barack obama) has inherited a total economic nightmare. feckless inaction will make it worse, ill-conceived fixes will make it worse, the perfect plan will make it bearable but it will still be ugly. So....three things can happen and two of them are really, really bad and one is darn bad. methinks PEBO is in for a horrific time no matter what he does. It's just the luck of the draw he got, let's see what he does with it.
Sounds like the Kobayashi Maru
can i get a witness?
malcome X the Owl | 11.05.08 - 12:24 pm
Amen.
Two things there:
Maybe Pottersville needs a better healthcare system or maybe a new optometrist?
Hot in the meme-o-sphere:
1) Sanguine
2) Feckless
3) PEBO (my fav)
Jerry Yang looking to eat some humble pie: Yahoo May Embrace Microsoft After Google Walks Away (Update3) - Bloomberg.com
Don't fret, Obama will change the world and hope springs eternal.
No need for the negative nancy's anymore, our savior is at hand.
The economy is fine and with Obama in office I am absolutely POSITIVE he will make wise and sound decisions and our elected officials will no longer allow the rampant corruption to continue.
I give it 12 months before the disillusionment sets in and people realize that he is not "The One"
Ron Paul 2012!!!!!
Best part is I can say I voted Ron Paul!
With the passing of Prop 8.
Gavin Newsoms bid for the Governors mansion is officially dead. RIP
My favourite line from It's a Wonderful Life is the bartender's when Clarence tries to order a glass of milk;
"This a place where men drink whiskey to get drunk."
Oops x, sorry.
4) comparing our world to Capra World
Generalisimo Gerkinov writes:
Yeah, Jeebus is pretty clear about his stand on all things financial.
Generalisimo Gerkinov | 11.05.08 - 12:32 pm | #
They always seem to leave this one out Parable of Talents
UB,
The person they pick will be from the org we were onto last night!
About the Peter G. Peterson Institute for International Economics
E.g: William R. Cline, writing for the Peterson Institutes new blog, says lending will remain constrained. It seems likely, however, that bank credit expansion will remain far below the pace of recent years even with the new recapitalization plan. Peter Boone, Simon Johnson and James Kwak write in the Washington Post that the government will have to take a stronger hand. The United States, in contrast, is putting the full credibility of its balance sheet behind banks but giving them free rein to move on.
Secondary Sources: Will Banks Lend?, Myths, Stimulus Plans - Real Time Economics - WSJ
"I give it 12 months before the disillusionment sets in and people realize that he is not "The One""
They're going to start calling him "That One".
That was a fairly good link (above)
Secondary Sources: Will Banks Lend?, Myths, Stimulus Plans
A roundup of economic news from around the Web.
If Obama 'leaves' office while he is still considered 'the one,' he will go down as the most overrated Pres since JFK. And then America can excuse its fall as being caused rather than earned and dream about what might have been if only the domestic terrorists had been dealt with earlier.
Then President Biden can get busy cleansing America and we will all understand or be quiet.
"Patriotic Americans" will be the new "good Germans."
And our descent into hell can accelerate while those with power continue their grab.
The status quo will survive even as we cry at a memorial and call it change.
Tell Lee Greenwood to get warmed up.
They're going to start calling him "That One".
HAHA
x: in the interest of full transparency they should rename it the Petropoulos Institute For International Economics.
CSC
How long before you see all the Obamam T-Shirts at the Goodwill?
Why@ ZIRP writes:
Generalisimo Gerkinov writes:
Yeah, Jeebus is pretty clear about his stand on all things financial.
Generalisimo Gerkinov | 11.05.08 - 12:32 pm | #
They always seem to leave this one out Parable of Talents
It's there.
The Republicans have rushed an order for "Obamanation" T-shirts, taking advantage of the bounce they got from the GOP crowd reaction to McCain's concession speech.
How long before you see all the Obamam T-Shirts at the Goodwill? - Tim the casual observer
They will be called "Goodwill Federal" soon enough.
The Greeks again, just great!
OT: Addressing the Financial Crisis
Morris Goldstein, Peterson Institute
Speech presented at a Peterson Institute event
October 7, 2008
http://www.iie.com/publications/papers/goldstein1008.pdf
I have been pushing this since last April; Treasury Secretary Paulson, FDIC
Chair Blair have come out in favor (as has Shadow Financial Regulatory
Committee)but still dont have it; need it ASAP.
Hmmm...
dding in the $700 billion approved for the Wall Street bailout, the government potentially could wind up investing more than $1 trillion in the private sector.
With so much already on their plate, financial regulators may not have had time to work out every detail on how to unwind their investments, according to George G. Kaufman, a finance professor at Chicago's Loyola University and co-chairman of the Shadow Financial Regulatory Committee.
"I think the administration spent so much time just working out the entrance strategy, given the crisis they were facing, to worry too much about the exit," he said.
Bush: Banks boost to be 'limited, temporary' - Washington Times
Statement of the Shadow Financial Regulatory Committee on Would Basel II Have Helped Prevent the Subprime Turmoil? December 10, 2007
http://fic.wharton.upenn.edu/fic/Policy%20page/Shadow%20Statement%20253.pdf
Hmmm
That Bear guy going to Fed proves truth is stranger than... we just can't make this stuff up!
It is important to get out in front of our President-elect and slam him before he's performed a single action in office or even taken the Oath. The American people have resoundingly asked for a change in policy, but it's crucial that we act NOW to make sure that that change fails, regardless of the costs to the country.
We have elections to win in a few years, you know.
Shadow Financial Regulatory Committee: An independent committee
sponsored by the
American Enterprise Institute
See: Obama Foreign Policy May Keep Some Bush Initiatives (Update3)
Obama Foreign Policy May Keep Some Bush Initiatives (Update3) - Bloomberg.com
The Iranian regime, as well as al-Qaeda leaders, may view Obama's emphasis on engagement and negotiation as a sign of faltering U.S. resolve, said Danielle Pletka, an analyst at Washington's American Enterprise Institute and a former staff member of the Senate Foreign Relations Committee.
Perception of Weakness
What we think of as multilateralism and internationalism is perceived as weakness by some,'' Pletka said.The problem is that those who perceive it that way are most likely to try to take advantage of it.''
There is wide agreement that Obama will embody a perceptual change in America's face to the world -- partly because he will be the first black president, partly because of life experiences that include a Kenyan father and a boyhood spent in Indonesia, and partly because he isn't Bush.
Experts: Make Investment Bankers Share The Cost
Experts: Make Investment Bankers Share The Cost - Forbes.com
The Shadow Financial Regulatory Committee also took a stand against new restrictions on short-selling and recommended that the government liquidate Fannie Mae once the market for mortgage financing has stabilized. The federal government took over the two quasi-private mortgage giants earlier this month.
Let's get some perspective on a trillion. With 310 million people a trillion is $3200 per person. With 128 million households $7800.
Anybody seen their share?
Yep, that's what the pirates are up to:
Private National Mortgage Acceptance Company aka as Countrwide, will morph Fannie/Freddie into a new shadow mortgage corporation....
Ok, my work is done here, I am sorry if I pissed off anyone!
It's A Wonderful Life bank run
YouTube - It's A Wonderful Life bank run
Anybody seen their share?
This way lies madness. You could do similar math for the defense budget but I don't think too many people would say we aren't getting our money's worth there.
"GM will announce important changes on Friday."
4 Row Hummer or Chevy Aveo SS
Michael Crichton is dead.
Ok, I'm not done!
Our company is managed by a team of mortgage industry veterans led by Stanford L. Kurland, and is based in Calabasas, California. PNMACs strategic partners are BlackRock and Highfields Capital Management.
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PNMAC MORTGAGE OPPORTUNITY FUND, LLC
SEC Info - PNMAC Mortgage Opportunity Fund LP - 40-17G - On 9/3/08
27001 AGOURA ROAD
CALABASAS CA \t91301
/s/Jeffrey Grogin, on behalf of Private National Mortgage Acceptance Company, LLC \t8/21/08
Also see: It would be a shame to see Circuit City disappear, but perhaps their own management is to blame given their history of refusing buyout offers the company turned down an $8 a share offer in 2003 and $17 per share in 2005 from Highfields Capital Management, and recently blew a shot at being acquired by Blockbuster for at least $6 a share.
Mortgage Applications : The weekly MBA mortgage applications index plunged 20.3% l(lowest in nearly 8 years according to Bloomberg) ast week with refis down 27.8% and purchasing applications down 13.9%. The fixed 30-yr mortgage rate rose to 6.47% (+21 basis points) while the 15-yr popped to 6.14% (+13 bps) & 1-yr adjustable rate mortgages dipped to 6.86% (-4 bps).
Rahm Emanuel is a stoner.
Look at the guy.
If you don't see a stoner, you're probably a shitty parent.
It's too bad we have one party rule, because if this were a functioning republic I might actually have some hope.
I hope that he selects someone from the "real" economy (i.e. non-financial industry). The bankers have had their run, time for those who add true value to the US economy to have a shot.
"I hope that he selects someone from the "real" economy (i.e. non-financial industry). The bankers have had their run, time for those who add true value to the US economy to have a shot."
You're joking right?
CR: Would you consider changing the title of these posts to "Credit Opportunity Indicators?" Crisis is so 2000-2008. We're all unifying now and I hope you'll do your part.
Let the beatings continue.
How old will Ron Paul be in 2012? 85?
I hope that he selects someone from the "real" economy
How about Joe the Plumber?
rent_to_own writes:
'They will be called "Goodwill Federal" soon enough.'
Just like all the expected rioting in America turned out to be called 'celebrations.'
No, think IndyMac which is now IndyMac Federal. You've so missed my intent that you aren't even merely wrong. That would be too kind.
"Currently Smoking Cannabis writes: Crisis is so 2000-2008. We're all unifying now and I hope you'll do your part."
Obama has harshed CSC's mellow. Change you can believe in.
Hopefully he will not choose these persons. They were in under Clinton, when Glass Stegal was destroyed. The represent old banking interests -- the reason we are in bad shape today. I have great hope for Obama, but this would not be a good sign.
$500 billion? I guess it depends on what you call 'stimulus' and what you call 'normal spending'. It is really just a semantic difference.
If $500 billion goes out for specific projects of some value to us, fine. It it gets tossed to the pigs like the last one did, forget it.
Either way, we'll have no option eventually but to inflate the debt away.
Will the new stimulus be based on 2008 income, which is not yet knowable? I made way too much in 2007 to qualify for the first stimulus giveaway. I made around $1M shorting stocks and gambling in 2007. I paid federal taxes in proportion to the total tax revenues that would be equivalent to a $10K share of the cost of that stimulus package. Therefore, my actual stimulus was quite negative.
I might managed to keep my household income under $150K in 2008. If I can fit under the cap, I might get a taste of the next stimulus package.
Well aside from CR, I think Summers is probably the best bet among the names being tossed around, although Buffet might be an interesting pick if he is interested in the job. I would love to see Tanta tapped as head of OFEHO or perhpas comptroler of the currency. Steglitz would be my top pick for CEA, although PK would also be an inspired choice. Perhaps a undersecratary role for a guy like Brad DeLong. I'm guessing that Spitzer and Edwards are out of the running for AG or head of SEC. However, Andy Cuomo would make a good choice for head of SEC. How about naming Al Gore to head either Interior or the EPA. Bill Richardson would be a good pick for Sec of State. Put Dennis Kuchinch in as head of HUD.
"$500B stimulus package? Insane"
-Iceman
But the 700 billion dollar (now 2.5 trillion) Bailout/Giveaway to the jackasses who destroyed the world economy is sane?
Lawrence Summers? Read this.
Multinational Monitor
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