"We noted that the world economy is in good condition and growth is more evenly distributed across regions. ... We anticipate a smooth adjustment of global imbalances which should take place in the context of sustained and robust economic growth."
- G8 Summit communiqué, June 8, 2007, Heiligendamm
-- Tracer Hand, Friday, 11 July 2008 17:37 (8 minutes ago) Bookmark Link
from the same document:
"While noting the positive contribution (sic) of hedge funds to financial-market stability, we also want to minimise systemic risks by increasing transparency and market discipline on the part of all parties involved."
-- Tracer Hand, Friday, 11 July 2008 17:38 (7 minutes ago) Bookmark Link http://gispro.files.wordpress.com/2007/06/bullshit.jpg
― VeronaInTheClub, Friday, 11 July 2008 16:48 (fifteen years ago) link
yeah, that "CHRIST! Did a cow shit in here?" quote from kentucky fried movie is a pretty good summary of the economy today.
― Eisbaer, Friday, 11 July 2008 16:51 (fifteen years ago) link
I love how the graph is mincing around just above 11000, like it's ready to jump in but is afraid the water might be a little too cold
― Tracer Hand, Friday, 11 July 2008 16:53 (fifteen years ago) link
http://www.davemanuel.com/images/dead_cat_bounce.jpg
― Eisbaer, Friday, 11 July 2008 16:54 (fifteen years ago) link
Phil Gramm 'expert' lolz
― Dr Morbius, Friday, 11 July 2008 17:02 (fifteen years ago) link
this seems like a good time to post modok with a moustache http://s89230137.onlinehome.us/BBC/blogfiles/MODOK_moustache.gif
― El Tomboto, Friday, 11 July 2008 17:19 (fifteen years ago) link
I thought that when the tech bubble burst the Big Dow would find its support at around 8000. Little knew I then, apparently. Still, it wouldn't shock me if it gets there now, over this housing bubble.
― Aimless, Friday, 11 July 2008 17:42 (fifteen years ago) link
One thing that puzzles me about the current crisis - it seems sort of common sense to me that any little thing can push an already teetering mortgage over the brink - a rise in gas and food prices, a layoff, etc., and it seems like those little things are on the rise. Do *analysts* consider that simple fact when they evaluate the mortgage and mortgage securities businesses? Like are their projections based on the assumption that things will follow their current trend instead of getting worse? And if so, is that why we keep getting *more bad news* surprises?
― Hurting 2, Friday, 11 July 2008 18:01 (fifteen years ago) link
yeah, i'm really an amateur about economics, but i'm kind of surprised that the fannie mae/freddie mac bombshell happened now and not sometime months ago. why is this?
― goole, Friday, 11 July 2008 18:03 (fifteen years ago) link
Short-sellers piling in, maybe?
― o. nate, Friday, 11 July 2008 18:29 (fifteen years ago) link
Does the 95% "institution owned" statistic for both of these companies have something to do with their semi-government-backed structure?
― Hurting 2, Friday, 11 July 2008 18:34 (fifteen years ago) link
A perfect photo for today (though I don't think it was taken today, sadly):
http://latimesblogs.latimes.com/laland/images/2008/07/11/k3uny1nc.jpg
― Ned Raggett, Friday, 11 July 2008 18:36 (fifteen years ago) link
Actually that deserves a 'Caption this photo' thread...
Caption this photo (Fannie Mae/Freddie Mae/economic collapse edition)
― Ned Raggett, Friday, 11 July 2008 18:37 (fifteen years ago) link
Well I imagine that contributed to the view that these were relatively safe investments that encouraged institutional investors to hold them. That could also be contributing to the free-fall, if all these institutions decide to get out at once.
― o. nate, Friday, 11 July 2008 19:08 (fifteen years ago) link
Well I don't know enough about how that stat is calculated and how up-to-date it is. I mean if a stock is 95% institution owned, a precipitous drop like this can ONLY come from institutions selling it off. Unless the number somehow reflects the fact that everyone else has been selling and only institutions are holding.
― Hurting 2, Friday, 11 July 2008 19:34 (fifteen years ago) link
I don't think that number's very up-to-date - probably updated monthly or less, I'd guess. I'm not sure how it's calculated though I guess these institutions periodically issue reports on what they've bought and sold, so that might be the source. I think these institutions typically trade in such large blocks that they usually try to place a block with another institution if they have to sell so that they don't move the market too much, but if they really are desperate to sell and they can't find someone willing to take a large block, then I guess they might have to sell in smaller lots. I'm not sure though.
― o. nate, Friday, 11 July 2008 20:19 (fifteen years ago) link
so much for IndyMac.
― El Tomboto, Friday, 11 July 2008 22:55 (fifteen years ago) link
The company was desperate for more capital but couldn't find investors willing to put fresh funds into what looked like a crippled institution.A growing number of banks are facing a similar, if less dire, challenge, as investors who pumped billions of dollars into capital-hungry banks are now starting to balk at throwing good money after bad.An exodus of depositors added to IndyMac's woes. Deposits are the lifeblood of banks, providing them with a stable, low-cost source of cash to fund their daily operations and lending activities. After Mr. Schumer raised questions about the bank, depositors withdrew $1.3 billion in 11 days.It's unclear how much the failure will cost the FDIC.
A growing number of banks are facing a similar, if less dire, challenge, as investors who pumped billions of dollars into capital-hungry banks are now starting to balk at throwing good money after bad.
An exodus of depositors added to IndyMac's woes. Deposits are the lifeblood of banks, providing them with a stable, low-cost source of cash to fund their daily operations and lending activities. After Mr. Schumer raised questions about the bank, depositors withdrew $1.3 billion in 11 days.
It's unclear how much the failure will cost the FDIC.
― El Tomboto, Friday, 11 July 2008 22:57 (fifteen years ago) link
Part of me wants a total world economic collapse just so I can hear how surreal Kai Rysdall sounds reading completely horrific news in his cheerful style.
― Hurting 2, Friday, 11 July 2008 23:35 (fifteen years ago) link
barry's line today made me irlol
Fannie (FNM) and Freddie (FRE) fell more than 25% each, as the bailout plan makes it clear that shareholders are not going to be rewarded for showing such bad judgment as to own this crap.
― El Tomboto, Wednesday, 16 July 2008 04:26 (fifteen years ago) link
So like, what are the options Obama is offering? (In case he does actually win the presidency). I heard he's supposedly to be less progressive than Clinton on these US recession woes?
― VeronaInTheClub, Wednesday, 16 July 2008 12:54 (fifteen years ago) link
WE GONNA DIE
― El Tomboto, Wednesday, 16 July 2008 17:51 (fifteen years ago) link
I never thought Tom would turn into Jar Jar Binks.
― Nicole, Wednesday, 16 July 2008 18:45 (fifteen years ago) link
The front page of the Washington Post is LOL today: two articles on the sinking economy and part 3 of a like 15 part series on CHANDRA LEVY
― Mr. Que, Wednesday, 16 July 2008 18:48 (fifteen years ago) link
You know, taking you back to the last recession.
― Ned Raggett, Wednesday, 16 July 2008 18:53 (fifteen years ago) link
ok i'm a dunce about all this but bear with me, this is me half-repeating stuff i've read in a several different places
the housing crisis is huge but underlying inflation is part of the cause of it: ppl are more likely to skip out on a mortgage payment than on food or gas. so oil prices are the lurking problem underneath the entire slowdown. oil is more expensive lately but not as much as it seems in the US - oil is priced in dollars and all the foreign producers still want to make they money even tho the dollar is weak.
the dollar is weak because of the terrible fiscal position of the US government (monetary policy is no help here, either that or a relatively loose monetary policy actually hurts too?). our fiscal picture looks so bad because of massive wartime borrowing and spending (the war(s) and concomitant hawkishness re: iran are part of the instability premium on oil as well). the US congress and populace may have itself fooled that running the war off the books in emergency spending bills makes it free, but the economists at every bank and firm on the globe are not stupid -- they are right to not value the greenback very much. so, if we want to fix the economy, we have to end the war?
am i totally amateurishly zmag wrong about this or what
― goole, Wednesday, 16 July 2008 18:58 (fifteen years ago) link
we have to do a lot more than stop spending on shock & awe surge funtime & dinar casino games to fix this shit
I briefly considered taking the day off today to go down in front of the hill and make myself a posterboard sign saying NO BAILOUT but it's really hot
― El Tomboto, Wednesday, 16 July 2008 19:08 (fifteen years ago) link
no bailout rly?
i would like to get all the garbage out of the system and finally see where the bottom is, since that's what everyone seems to want to know. but i also don't want to be selling matches on the corner of marshall and snelling either
― goole, Wednesday, 16 July 2008 19:14 (fifteen years ago) link
Nothing can stop that now.
― Jimmy The Mod Awaits The Return Of His Beloved, Wednesday, 16 July 2008 19:23 (fifteen years ago) link
http://www.bertdecker.com/photos/uncategorized/wheels_off_jpeg_1.jpg
i plan to offer pencils also
― goole, Wednesday, 16 July 2008 19:24 (fifteen years ago) link
the dollar is weak because americans have spent beyond their means for deacdes and had the rest of the world finance it. the war et al have been catalysts perhaps but as tombot says, it'll take a lot more than no more shock and awe o fix this shit.
china (and to a lesser extent, india) is industrializing like crazy, creating demand for commodities on a quantitively different level than the world has known to date. this means that unless the earth has an abundance of presently unknown natural resources, prices are going to new levels where there are likely to remain.
meanwhile, speaking for russia at least, despite the fact that oil production is down slightly, a significant minority of people i know believe that the nasty secret is that oil companies are not particularly bothered about boosting productino to meet higher demand because the oil they pump next year will fetch a higher price than whatever they pump this year. (admittedly we're starting to see cost inflation cutting into the crazy profits - Gazprom's financials were pretty disappointing last quarter - so that theory may get tested over the next year or so)
― mitya, Wednesday, 16 July 2008 19:35 (fifteen years ago) link
i just lost my job :D
― deej, Wednesday, 16 July 2008 19:38 (fifteen years ago) link
wait i mean http://www.best-of-web.com/_images/080509-131410-727007.jpg
― deej, Wednesday, 16 July 2008 19:39 (fifteen years ago) link
:O
― Jimmy The Mod Awaits The Return Of His Beloved, Wednesday, 16 July 2008 19:39 (fifteen years ago) link
btw did you guys see the bit about how 10% of china's GDP is in Fannie/Freddie bonds? scary foreign policy angle
― El Tomboto, Wednesday, 16 July 2008 19:39 (fifteen years ago) link
ha we'll curb the yellow menace yet
― goole, Wednesday, 16 July 2008 19:40 (fifteen years ago) link
(I assume most everybody on these threads reads barry ritholtz on the regular, which may be false)
― El Tomboto, Wednesday, 16 July 2008 19:40 (fifteen years ago) link
yes, it's false - what's the link pls
― mitya, Wednesday, 16 July 2008 19:54 (fifteen years ago) link
http://blogs.cfr.org/setser/2008/07/12/too-chinese-and-russian-to-fail/
lol I did not see this was from CFR
― El Tomboto, Wednesday, 16 July 2008 19:55 (fifteen years ago) link
Solution: stop wasting your money on the Internet and high-tech. Apparently.
― Ned Raggett, Wednesday, 16 July 2008 19:57 (fifteen years ago) link
wow that guy is dumb
― El Tomboto, Wednesday, 16 July 2008 20:01 (fifteen years ago) link
But it's Larry Magid!
(Whoever he is.)
― Ned Raggett, Wednesday, 16 July 2008 20:02 (fifteen years ago) link
this is my new .sig file
― Tracer Hand, Wednesday, 16 July 2008 23:39 (fifteen years ago) link
Deej, what kind of job did you lose?
ps that sucks
― Hurting 2, Wednesday, 16 July 2008 23:46 (fifteen years ago) link
deej sorry u lost yr job man!
― J0hn D., Wednesday, 16 July 2008 23:49 (fifteen years ago) link
i was working at a company that gets contracted to write learning materials for other companies
zzzzzzzzzzzzzzzzzzzzzz but it paid the bills
― deej, Wednesday, 16 July 2008 23:54 (fifteen years ago) link
btw if anyone wants to know how to sell insurance im your man it basically involves scaring the customer into spending more
sorry to hear the news, deej :-(
― Eisbaer, Thursday, 17 July 2008 01:38 (fifteen years ago) link