Archive for September 24, 2008

Chronicles Of Depression 2.0: #236

September 24, 2008

How close was the financial system to melting down?

If the FDIC hadn’t stepped in to backstop the runs on the money market funds, it’s not crazy to think that we might have seen a massive liquidation of huge portions of the banking system at fire sale prices. That magnitude–one person I talked to before the bailout gave a wild-sounding estimate of $1 trillion worth of money market fund redemptions in the immediate offing. With the money market essentially destroyed, the resulting bank liquidations would have been even worse, beyond even the ability of the US Government’s borrowing power to pull back. That would have touched the bank accounts, the investments, and the firms of even the hawkiest of credit hawks–unless you’ve actually got it buried in your back yard in tin cans, you’d lose something, and even then, who would buy whatever it is you sell to make a living?

Emphasis added by me.

That close to a financial all-out China Syndrome.

Chronicles Of Depression 2.0: #235: Swaps

September 24, 2008

Fed sets $30 billion swaps lines with Nordics, Australia

WASHINGTON (Reuters) – The Federal Reserve set new currency swap lines worth $30 billion with central banks in Scandinavia and Australia on Wednesday to boost short-term U.S. dollar liquidity and help drive down interbank lending rates.

European money markets rates eased on Wednesday after the Fed’s move, but analysts questioned if the pledged $30 billion in new liquidity was enough to calm markets for long.

The Fed’s action comes on top of $247 billion that has already been committed to currency swaps with other major central banks, as authorities battle a global credit crunch sparked by the collapse of the U.S. subprime mortgage market last year.

Emphasis added by me.

And we don’t get the full picture. This is the first time I’ve read this:

Norway’s has been the busiest among Scandinavian central banks, injecting both crowns and U.S. dollar currency swaps since Lehman’s collapse to calm the local money market, which stopped functioning at one point last week.

Emphasis added by me.

And the bleeding of dollars just goes on and on and on and on:

The Fed has already set up a $110 billion swap line with the European Central Bank, $60 billion with the Bank of Japan, $40 billion with the Bank of England, $27 billion with the Swiss National Bank, and $10 billion with the Bank of Canada.

Emphasis added by me.

Are you beginning to get the picture that there isn’t enough money in the entire world to stop this?

All Chronicles of Depression 2.0 posts. Why bother?

Chronicles Of Depression 2.0: #234: Milken

September 24, 2008

The poster boy for the excesses of the first Wall Street orgy, Michael Milken, convicted, fined, and imprisoned Junk Bond King is astonished by today’s Wall Street crack whoredom.

Junk bond king Milken astounded by Wall Street crisis

“Thirty-to-one leverage is not a business, it has never been a business and it will never be a business,” said Mr. Milken in a clear reference to the now infamous debt to asset ratio at defunct Wall Street giant Lehman Brothers. His own businesses have never been leveraged by a ratio of more than four to one, Mr. Milken said.

Emphasis added by me.

And:

Mr. Milken also drew a distinction between U.S. banks which are not currently in a position to finance more consumer spending, and well-capitalized Chinese banks that have more funds available.

Emphasis added by me.

You will welcome your new Chinese Overlords.

All Chronicles of Depression 2.0 posts. The trail of FAIL.

Chronicles Of Depression 2.0: #233: Brutal

September 24, 2008

Jack Welch says U.S. faces “deep downturn”

NEW YORK (Reuters) – Former General Electric Co (GE.N: Quote, Profile, Research, Stock Buzz) Chairman and Chief Executive Officer Jack Welch said the U.S. economy faces a deep downturn in coming quarters, and he supports a proposed $700 billion government rescue package for the financial sector.

“I now believe we are in for one hell of a deep downturn,” Welch told the World Business Forum in New York on Wednesday, adding that the first quarter of 2009 will likely be “brutal.”

Until recently, Welch said, he had believed the U.S. economy could avoid recession, but he has changed his mind.

“I am now caving,” he said. “Get ready for real tough times. They’re coming. There is no credit available.”

Emphasis added by me.

Sinking in yet?

All Chronicles of Depression 2.0 posts. The chronology of our Doom.

Writer Christopher Fowler Awarded

September 24, 2008

Blimey! I Won!

At the British Fantasy Convention, his book Old Devil Moon won the award for Best Collection.

But what is killer is his blogged account of it. We all need a laugh — and Fowler comes through with the funniest write-up I’ve ever read. It is classic Christopher Fowler and not to be missed! Click that link!

And congratulations to Chris!

Book Cover: What?!

September 24, 2008

The other tragedy of this cover — the outright racial slur is the first — is that the writer is a geniunely great writer: James Hadley Chase.

He’s criminally out of paper print (and not in eBook). I was able to snag two of his books to read and they were simply tremendous.

I’ve linked to a site dedicated to James Hadley Chase all this time. I won’t delete that link because of a stupid title.

Other paperback book covers are available for viewing at Vintage Paperbacks & Digests, from which I obviously swiped this.

— via Twitter from top_book

Chronicles Of Depression 2.0: #232

September 24, 2008

Choosing Cash Over Cachet
The dramatic downturn on Wall Street has caused an uptick in selling off pricey assets, from designer handbags to wine collections.

The unprecedented turmoil on Wall Street has made liquidity the new luxury. No one wants his cash hanging on the wall or around his wife’s neck. And all over the country, re-sellers of luxury goods from art to Birkin bags are seeing the exact same thing: wealthy consumers, once conspicuous in their consumption, are not just scaling back their spending, but parting with some of their priciest assets for cash.

Emphasis added by me.

Cash will be king.

For a short time.

Then utterly worthless.

Chronicles Of Depression 2.0: #231: Pray

September 24, 2008

I’ve been paying close attention to the testimony of Paulson and Bernanke.

The bailout is bullshit.

“Price discovery” is a pretty term for uncovering fraudulent valuations.

That’s what brought down Lehman Brothers. When people finally saw that a bunch of paper Lehman was valuing at $20 billion was fetching only $2 billion in the current open market, everything else was flushed down the toilet too. Lehman destroyed itself.

How many other companies have been playing that game? All of them!

“Market mechanism” is bullshit. There are no buyers right now. The housing market was based on outright fraud. Home ownership affordability has been made impossible even with writedowns. So where is this new massive sum of money going to come from?

It’s not!

They think they can now ignore the free-market principles they’ve espoused and pushed pushed pushed since Reagan came into office. They think they can sweep all this under the rug.

With the millions of foreclosed and now empty homes — that aren’t selling — how many construction companies will be able to get loans to build new unneeded and unsalable homes? Housing construction is dead for the next five to ten years. There’s already a glut of inventory.

You think international investors aren’t going to notice this? Do you think they operate under different accounting rules than everyone else? Do you think they won’t see the past ten years of foundational wealth essentially being erased? With the government trying to assure them, Hey, no, really, it’s okay to still buy our Treasury Bills in order for us to continue increasing our national debt. Backed by what? By what collateral? Millions of homes empty and falling apart due to being empty and unmaintained?

Paulson and Bernanke were asked more than once to explain the ramifications to the average American of not passing this bailout. They balked. They won’t say it’s The End. They won’t even say that even if the bailout FAILS — and it will — that it’s The End. It would enrage the American people to find out they’re facing an American Gotterdammerung.

I’ll damn well say it: It’s The End.

And there’s one point I really must address. It was said quickly: “People buying homes they couldn’t afford.” What? Say that shit again? Do they think these people walked into a store with a fucking credit card and said, “I’ll take the Colonial!”? Are they fucking insane, to try to pass that shit off on us? There had to be real estate agents, mortgage brokers, bank financing. Speedbump after speedbump, check after check, to validate the buyer. People who rightfully never dreamed they would ever own a home were lied to and told they could. Millions and millions of people were outright lied to. And because they believed, because they made their faithful mortgage payments up until the time the ARM jacked up the mortgage to double or even triple what they were paying — those people are the villains of this piece? Oh no no no. You can’t pass that truckload of bullshit off on me, nor on any other American — especially the millions who were defrauded!

This makes me so fucking angry. Can you tell?

The word used again and again is “unwinding.” Hey, unwind that shit. All documents have signatures on them. Trace them back and back and back to the real estate agent, the mortgage broker, and the bank officer who signed up. Put those people in jail to begin with. And then wind it all back up and go up that ladder again and put in jail the megabanks who took these lies and fraudulently revalued them, laundered them, and sold them.

As it is, this bailout is nothing but another grand fraud.

I can smell it from where I sit in front of the TV watching CNBC. So will international investors sitting in front of their TVs watching CNBC.

This is The End.

All Chronicles of Depression 2.0 posts. As if they matter now!

Chronicles Of Depression 2.0: #230

September 24, 2008

The 50 Richest Members of Congress

Shouldn’t people this wealthy forfeit their government salaries, perks, and pensions?

How much is enough?

And we expect them to relate to our concerns?

Red Sony Reader: REAL Pictures!

September 24, 2008

A kind soul who wishes to remain uncredited sent me three real pictures of the red Sony Reader!

Click to make big!

OK, now is it tempt-o-liciously gorgeous and lustitastically irresistible?

Yes!

Previously here:

FIRST PHOTOS! Red Sony Reader!!