Archive for October 6, 2008

Chronicles Of Depression 2.0: #322: Iceland 3

October 6, 2008

UK investors shut out as Icelandic bank admits it cannot safeguard British cash

More than 200,000 British investors in the internet bank Icesave were last night shut out from a guarantee to protect 100 per cent of their savings.

In a short statement, the Icelandic government said it would fully guarantee deposits in domestic banks.

But heads of Landsbanki, which runs Icesave, admitted that its UK-based savers would not get the same protection for their £4.5billion investments should it go bust.

Emphasis added by me.

Get this:

Worried British customers of Icesave were unable to access their accounts after its website crashed.

Some were informed they faced a wait of ‘several hours’ before they could access their money. Those ringing its phonelines were told that the bank was receiving ‘unprecedented call volumes’.

The internet bank insists it has ample reserves to pay back UK customers.

However, it admitted savers had been reducing their balances to the compensation level.

Emphasis added by me.

Hey, the Dollar Uber Alles freaks always bray about “rational markets” — there it is: people withdrawing their savings down to insurance- coverage levels! Did you expect people to do differently?

The background of all this is revealed:

Iceland’s current problems have their roots more than ten years ago when a conservative government privatised and deregulated the banking industry at the same time when huge amounts of foreign money began to flood into Iceland.

No one is quite certain where it all came from – most of it was via anonymous tax havens such as the Cayman Islands – but in part it was driven by investors hungry for high interest rates.

Banks took the money and went on a spending spree. Either directly, or by loaning the cash to Icelandic entrepreneurs, they rushed around Europe buying up companies.

Today, the country has foreign debts of £78billion, which is extraordinary given that its entire annual gross domestic product is only £8billion.

Emphasis added by me.

A conservative government! What a shock!

Chronicles Of Depression 2.0: #321: Then

October 6, 2008

‘I remember the Wall Street Crash’

Now nearly 97 years-old and still working as a financial adviser, Mr Bickell can see plenty of similarities between the current crisis and that of 1929.

“There was a lot of borrowing going on before the crash, just like today, and everybody was very happy,” he says.

“People were making lots of money, but then suddenly things started to change.”

Mr Bickell started off at the age of 17 years old chalking up the stock prices at a brokerage in the small town of Reading, Pennsylvania.

As Wall Street went into financial freefall on 24 October 1929, he found himself being quickly promoted as his brokerage began to shed staff.

Emphasis added by me.

You happy-happy people will be the death of us who think before we smile.

For many investors and brokers, the situation was too much to bear. Rumours began to spread of people throwing themselves from their office windows.

While many of these accounts later turned out to be exaggerated, the shock of the crash did push many to take their own lives in order to escape their financial woes.

And despite its distance from the financial district of New York, Mr Bickell’s home town of Reading did not escape unscathed.

“I remember two people in the town committing suicide as the effects of the crash hit home,” he says.

Emphasis added by me.

Dollar Uber Alles. Your life doesn’t matter. Only your money.

Now working at a branch of Wachovia Bank in Wyomissing near his home town, he has seen the events of 1929 repeat themselves with uncanny similarity.

Like many banks after the Great Crash, his current employer has recently ensured its survival by agreeing to be bought by its competitor, Wells Fargo, after a protracted period of uncertainty.

Emphasis added by me.

Brother, can you spare a dime?

Blog Notes: Sony Reader Part Three Delay AGAIN!

October 6, 2008

If I decide to do another blog after this one is put to sleep on 12/31/08, one thing I’ll have to be mindful of is to not pick a topic that’s going to grow like a goddammed aggressive cancer as the year progresses!

That’s what’s happened with my posts monitoring the economy.

What began as the fifth post on January 1st has grown to consume entire days.

Why can’t I get more non-Doom posts done?

It’s because of Microsoft.

This PC becomes increasingly hobbled with the passage of each day. Things I used to be able to do with sleek aplomb I can no longer do.

Just about everything I try to do has a multi-second delay running interference.

Posting is slower than it used to be.

Trying to edit a photo just about requires shutting down Firefox completely!

Trying to upload photos to both the WordPress blog and the Blogger backup blog is almost a heart-attack-inducing experience. Sometimes it takes up to thirty seconds for the file directory dialog to show me the photos! No, the hard drive does not spin during this. The entire PC acts as if it has been put into a state of stasis! No life at all. Except the sounds of my VERY LOUD SCREAMING at it.

Even trying to save something as simple as a screensnap has become hellish. I go to the Start menu and click on Paint (it’s nailed there). Seconds go by … and no Paint! I click on it again. Seconds pass. I scream!!! I get two instances of Paint!

Then when I tell it to save the BMP as a JPEG, I get the thirty-second file selector delay kicking in!

This shit is killing my biological incarnation.

Bill Maher has his New Rules.

I’d like a New Rule: For every multi-second delay I experience on this PC, someone at Microsoft should drop dead!

So now you know why Part Three is not appearing today.

And no, don’t tell me I have a virus or something. I’ve scanned the shit out of this PC. Had the Registry deep-cleaned. Nothing, nothing, nothing has helped.

So, all you smiley-smiley Microsofties who pollute the world with your utter shit — start dropping dead!

Chronicles Of Depression 2.0: #320: Unsub-Prime

October 6, 2008

BofA to slash mortgage payments

NEW YORK (CNNMoney.com) — A plan announced today by Bank of America will be the most aggressive foreclosure prevention effort ever undertaken by a U.S. bank.

The program, scheduled to start in December, will be open to borrowers who signed up with Countrywide Financial before it was acquired by Bank of America (BAC, Fortune 500), in July.

It came in a legal settlement that the company entered into with the attorney general offices of 11 states, who had sued Countrywide over predatory lending practices, but the initiative applies to borrowers in all 50 states.

“The Countrywide settlement is a watershed moment for loan modification programs,” said Mark Pearce, North Carolina’s Deputy Commissioner of Banks and a member of the State Foreclosure Prevention Working Group. “This is, by far, the best [program ever], even better than the FDIC program with IndyMac Bank.”

Emphasis added by me.

More:

As part of the initiative, Bank of America will cut monthly housing payments, including mortgage, property taxes and insurance, to no more than 34% of gross income. The move is expected to help keep as many as 400,000 troubled borrowers in their homes.

The program targets holders of subprime adjustable rate mortgage (ARMs), subprime fixed rate loans and option ARMs, but prime and Alt-A borrowers, who did not document their income, will be eligible as well.

No other foreclosure prevention effort has aimed to keep borrowers’ house payments so low.

Emphasis added by me.

Look at that. Not only wasn’t I ever invited to this party, but I also missed the free hangover treatment too!

I didn’t know he was now California Attorney General:

“This is the biggest mandatory modification of loans in U.S. history,” said Jerry Brown, attorney general of California, the state with the largest number of borrowers who may benefit from the settlement. “Of course, we never saw such a big rip-off by any other company either.”

Don’t you wish now you had made him President years ago?

I’m glad to see real relief coming to people who feared winding up on the street. Too bad it had it had to come as a result of legal pressure from several states!

If other banks fall into line and also do this maybe it can put a floor under everything and stabilize the system — at least here in the U.S..

Stock Market Crash Watch: Moscow Halted

October 6, 2008

Trading session halted as Moscow plunges

Russia’s benchmark RTS index suffered its sharpest fall in its 13-year history on Monday as investor jitters intensified over global financial turmoil, falling oil and commodity prices and overleveraged oligarchs at home.

The dollar-denominated RTS closed 19.1 per cent down, while the rouble denominated Micex fell 18.7 per cent, in spite of brief trading suspensions on both exchanges in an attempt to minimise the steep falls. The central bank spent an estimated $5bn to prevent the rouble weakening beyond the 30.41 mark against the euro-dollar basket.

Weighing heavily on investor sentiment were fears that Russia’s richest oligarchs could be dumping shares on the market if they faced margin calls on tens of billions of dollars in loans.

The forced divestment last week by Oleg Deripaska, Russia’s richest man, of his 20 per cent stake in Magna, the Canadian carparts maker, to creditors following margin calls on a $1bn loan sent rumours flying round the market other oligarch assets could be next. “People are being reminded that it’s a house of cards,” said one trader speaking on condition of anonymity. “If you’re a billionaire and you can’t raise money it’s pretty bad signal to everyone else.”

Emphasis added by me.

Let me repeat that bit:

“If you’re a billionaire and you can’t raise money it’s pretty bad signal to everyone else.”

A Small Intro To ePublishing

October 6, 2008

A Look at E-Publishing

This was published in August, but it’s all new to me — and probably to you too.

On the whole, E-Publishers don’t want books written for New York. They want things New York would never consider. Why? Because people who want to buy New York books will buy them from the same places you’d submit them to. E-Publishing isn’t about publishing more of the same. It’s about alternative books for an alternative market.

I’d like to see some specifics there as to what precisely are those things “New York would never consider.”

There’s another post that caught my eye: What Titles Evoke

But one thing I think writers often forget is that the image a title evokes is just as important as the words in the title. Let’s take the two examples I used already. The Accidental Demon Slayer is a fabulous and fun title and immediately you get the feeling that this is going to be a fun fantasy. You might not pick up that it’s paranormal romance, but that has actually worked to Angie’s advantage since the audience for the book has bled over to fantasy readers. The Naked Duke gives you an image of a fun, sexy romance. Which it is. But what about a title like The Case of the Missing Sword. When I hear a title like that I think of Nancy Drew or something similar. I think of a light mystery very possibly geared to a young adult audience.

Some interesting reading there.

One thing I must point out: This is ePublishing at a certain point in time. It won’t be the same thing, say, a year from now.

Chronicles Of Depression 2.0: #319: A-Bonds

October 6, 2008

An Asia bond could save us from the dollar

Asia has an opportunity to save itself, and the world economy, from the crushing excesses of Wall Street. China and Japan, with other Asian countries holding substantial surplus reserves, should act now to create an Asia bond to contain the fallout from a weak dollar.

They’re beginning to ask That Question.

I wouldn’t want to be God:

I would rather bet on China’s authorities – who ignored the prediction offered 18 months ago by Hank Paulson, the US Treasury secretary, that they risked trillions of dollars in lost economic potential unless they freed their capital markets. That seems wiser than praying to God that the US soon finds a credible model of economic growth and for regulation of financial institutions.

Emphasis added by me.

Look at that. Crooked Chinese Communist leaders are deemed more trustworthy than God!

Talk about bad PR!

Chronicles Of Depression 2.0: #318: POW!

October 6, 2008

Knock Out: CNBC Confirms Lehman CEO Punched at Gym

While former Lehman CEO Richard Fuld was testifying before the House Oversight Committee Oct. 6, CNBC reported he had been punched in the face at the Lehman Brothers gym after it was announced the firm was going bankrupt. CNBC and Vanity Fair contributor Vicki Ward said Fuld was attacked at the gym on a Sunday following the bankruptcy.

“Frankly, I sat there and listened and I’m with the guy who apparently, the day before Barclays announced they were coming in and Lehman had already filed for bankruptcy, went over to him in the gym and punched him because that’s how I feel when I, you know, when I watched that,” Ward said on the Oct. 6 “Power Lunch.” “I didn’t think he was contrite at all, I thought he was arrogant.”

Emphasis added by me.

Hey, the guy made near half a billion dollars from bonuses. And you expect him not to be a prick?

The Money Shot:

“From two very senior sources – one incredibly senior source – that he went to the gym after … Lehman was announced as going under. He was on a treadmill with a heart monitor on. Someone was in the corner, pumping iron and he walked over and he knocked him out cold. And frankly after having watched this, I’d have done the same too.”

Emphasis added by me.

Oh, if only it had made its way to YouTube!

Maybe the next one will!

Chronicles Of Depression 2.0: #317: Crackup

October 6, 2008

Six dead in Los Angeles murder-suicide: police

Six people were discovered dead on Monday at a house in a upmarket suburb in northern Los Angeles in what police described as a suspected murder-suicide.

[. . .]

However the Los Angeles Times cited an unnamed Los Angeles Police Department source as saying that a man suffering financial problems had shot his mother, wife and three children before taking his own life.

According to a real estate website, homes in the gated community where the bodies were found are valued at between 700,000 to 830,000 dollars.

Emphasis added by me.

As I said in Chronicles Of Depression 2.0: #245: Humans:

I have seen people react to the lack of money in terrible ways

There’s a prime example.

Millions more to follow.

Chronicles Of Depression 2.0: #316: Down

October 6, 2008

Global markets in meltdown as FTSE suffers worst one-day fall in its history

The London Stock Exchange suffered the worst one-day fall in its history today as the global economic crisis plumbed new depths.

The FTSE fell by a massive 7.8 per cent when Wall Street opened before rallying slightly to close down 363.1 at 4617.2.

Any hopes the turmoil would be eased by the U.S. finally agreeing a £400billion bail-out for its crippled economy on Friday were swept aside as panic spread.

After huge falls around the world, the Dow Jones in New York fell more than 500 points in early trading to dip below the 10,000 threshold for the first time in four years.

In Europe, Germany’s shock decision to issue a 100 per cent guarantee for all savings unleashed chaos around the continent.

Sweden, Austria and Denmark all followed suit today, prompting urgent calls for the Government to do the same or take a stake in major banks to stabilise the system.

Economist Ruth Lea said: ‘Desperate times call for desperate measures.’ CMC Markets analyst James Hughes added: ‘I’ve never seen anything like this. What we are seeing over the last few weeks is a once in a lifetime event.

Emphasis added by me.

Flashback to my post of March 3, 2008: When Will It Sink In That We’re Sunk?

Get used to hearing that phrase — I never thought I would see anything like this in my life — because you’ll be hearing it over and over again. Some of you will be saying it!

Ahem.