Archive for November 12, 2008

Chronicles Of Depression 2.0: #399: Emergency

November 12, 2008

It’s an emergency. Long-term cures must wait

The sudden collapse of the global banking system that followed the bankruptcy of Lehman – described by Mr King yesterday as probably the worst financial crisis in recorded history – was a separate affliction. Like a heart attack in a patient previously weakened by chemotherapy, it required a different clinical response.

Rather than a heart attack, the global banking collapse could perhaps be described as a bullet in the head, since its proximate cause was a conscious decision by the US Treasury to jeopardise the stability of the world economy in pursuit of an essentially political objective – to show that the Bush Administration was willing to act ruthlessly against at least one big Wall Street investment bank. Until that point, savers and investors around the world had assumed that financial institutions such as Lehman were “too big to fail” and would always be supported by their governments.

By shattering this belief Henry Paulson triggered a run on every important bank in the world and caused the sudden implosion of consumer and business confidence seen in the past two months.

Emphasis added by me.

His analysis is rather suspect. As in, I suspect he is parroting what the financial crooks want us to believe.

Here is his own flaw:

The obvious ways to do this are to slash interest rates and taxes, especially taxes on consumption and on lower income households, who are most likely to spend rather than save any extra money that they are allowed by governments to keep.

To avoid a deep and prolonged depression, policymakers all over the world must be willing to cut interest rates to levels never before imagined – if necessary all the way to zero, as Mr King hinted yesterday – and to increase their budget deficits without any regard to the old rules of fiscal restraint. They must also be willing to let their exchange rates float without worrying about inflation – another controversial policy that Mr King rightly endorsed yesterday.

Luckily, the post-Lehman recession has made this possible by transforming the inflation outlook: oil and commodity prices have halved in just over two months.

Emphasis added by me.

Riiiight: low commodity prices. Until, say, a disaster hits somewhere and those prices spike like all fuck. Let’s not forget what happened with rice earlier this year.

Chronicles Of Depression 2.0: #398: Insecurity

November 12, 2008

Retirees Cope With Dwindling Portfolios

DELRAY BEACH, Fla. — Since the stock market began to fall, friends have been coming to Barbara Goldsmith to talk about their depression, loss of appetite, insomnia and cravings for hot fudge sundaes.

“People are grieving,” said Ms. Goldsmith, a semiretired psychotherapist who counsels fellow residents of the Gleneagles Country Club, a gated community here. “There was a death. Their money died.”

In communities like Gleneagles and in the homes of retirees across the country, these are days of fear and uncertainty. In theory, retired people are not supposed to invest much in the stock market; in reality, many millions of them do. With the economy in free fall and stocks down about 40 percent this year, legions of middle- and upper-middle-class people are suddenly worried about having enough to carry them through.

Emphasis added by me.

Read this next bit carefully:

They all heard the standard advice to move their assets out of stocks and into supersafe investments as they neared retirement. But, with interest rates so low, the returns on safe investments like government bonds were meager, and many of them saw a risk in not keeping some money in stocks. To finance a long retirement, they figured they needed the gains characteristic of the stock market.

Keeping money in stocks left them exposed, of course, to the risk of a once-in-a-lifetime market meltdown. Now, that day is at hand.

That is what the Republicans have wanted to do with Social Security.

Privatize it. Collect all that “cash” and ship it of to Wall Street for multiplication.

Where would Social Security be today if Dubya had gotten his way eight years ago and finagled the privatization of Social Security?

The people in this article are well-off. Some have $2M portfolios, so don’t go weeping for them.

Save the tears for yourself.

Chronicles Of Depression 2.0: #397: $1T UP

November 12, 2008

Financial system may need over $1 trillion: dealmakers

NEW YORK (Reuters) – The U.S. government’s $700 billion bailout fund is unlikely to be enough, with the financial system needing more than $1 trillion to get through the crisis, two of Wall Street’s top dealmakers said on Wednesday.

The global crisis appears to have passed its most intense phase, seen around the time of the collapse of Lehman Brothers Holdings Inc in September, but financial institutions still face losses in the fourth quarter and early next year as the economy and credit quality deteriorate, said Gary Parr, deputy chairman of investment bank Lazard Ltd.

Emphasis added by me.

And, more bluntly:

“The government’s $700 (billion) is not enough. It’s going to be over a trillion,” he said. “It has to come from somewhere. And indeed in the last three months around the world, the primary source of capital for the financial services industry was the government.”

Emphasis added by me.

Remember that when you’re living in a cardboard box.

Especially when your Food Stamp allotment runs out before the end of the month.

Chronicles Of Depression 2.0: #396: U.K. 0%

November 12, 2008

Bank of England: We’ll slash interest rates to ZERO to rescue the economy

Interest rates could be slashed to zero for the first time in UK history as the Bank of England battles the deepening recession.

Governor Mervyn King said he is ready to reduce rates to ‘whatever level is necessary’ to counter the economic storm.

He warned Britain’s economy could shrink by at least two per cent during 2009, pushing inflation into negative territory for the first time in almost half a century.

A worst case scenario could see a slump of over three per cent in gross domestic product (GDP) – the biggest year-on-year fall since the beginning of 1981.

The Bank confirmed the UK has already entered its first recession since the early 1990s, blaming the slump in lending and chaos on financial markets.

In its report, the Bank said national output will fall at an annual pace of around two per cent by the middle of 2009.

Inflation will drop to one per cent, and alarmingly the retail prices index may well tumble into negative territory for the first time since March 19

Employment is also set to fall ‘significantly’ for the next two years, driving down incomes, the Bank warned in the wake of a surge in jobless figures.

Separately, more than a million people are now struggling with their mortgages because of the credit crunch, its quarterly inflation report showed.

Emphasis added by me.

Do you think 0% interest on market would work?

It didn’t work in Japan! It’s known as the “lost decade” over there. And in its wake, Japan is not the same. Lifetime employment: gone. Domestic manufacturing: China. Homelessness: accepted.

Chronicles Of Depression 2.0: #395: $5T

November 12, 2008

Washington’s $5 Trillion Tab

For all the fury over Treasury Secretary Henry Paulson’s $700 billion emergency economic relief fund, it seems downright puny when compared to the running total of the government’s response to the credit crisis.

According to CreditSights, a research firm in New York and London, the U.S. government has put itself on the hook for some $5 trillion, so far, in an attempt to arrest a collapse of the financial system.

The estimate includes many of the various solutions cooked up by Paulson and his counterparts Ben Bernanke at the Federal Reserve and Sheila Bair at the Federal Deposit Insurance Corp., as the credit crisis continues to plague banks and the broader markets.

Emphasis added by me.

I want all of you sitting there to consider all the times we’ve been told they was no money for:

1) Universal health care
2) Better roads
3) Better schools
4) Better food inspections (recall the e. coli outbreaks!)
5) Extensions of unemployment benefits
6) Rebuilding New Orleans
7) Supplying our troops with body armor

— and more. In short, anything that directly affected the betterment of our lives as ordinary citizens, we were told we were too poor to afford.

Suddenly, all these crooked motherfuckers on Wall Street are given trillions and trillions and trillions of dollars of money.

Yet there was no money for us.

Remember that.

Remember that when your pension fund goes broke.

Remember that when your 401K is wiped out.

Remember that as you frantically put your possessions up on eBay.

Remember that as you’re evicted from your home or apartment.

Remember that when you’re on line for Food Stamps.

Remember that when you’re living in a fucking cardboard box!

Chronicles Of Depression 2.0: #394: Moody’s

November 12, 2008

Moody’s forecasts surge in defaults

Company default rates could rise to levels not seen since the Great Depression because of the rapid deterioration in the global economic outlook since the collapse of Lehman Brothers.

The default rate for speculative or junk-grade debt could rise to 14.9 per cent by the end of next year, the highest level since 1932 when it peaked at 15 per cent, according to ratings agency Moody’s Investors Service.

This is the agency’s most pessimistic scenario, with the main so-called baseline forecast rising to 10.4 per cent for the end of 2009, a marked jump from a month ago when it was predicted to rise to 7.9 per cent. This jump is a result of expectations of a steeper US downturn, which will undermine growth across the globe.

Default rates rose to 10.5 per cent in 2001 following the dotcom crash and 12 per cent in 1991 after property prices slumped. The default rate is currently 2.8 per cent and expected to rise to 4.3 per cent by the end of this year.

Kenneth Emery, Moody’s director of corporate default research, said: “Our forecasts are now based on a deep and protracted US recession. The credit crisis has deepened with almost all economic data pointing to a much steeper slowdown.”

Emphasis added by me.

Moody’s is full of shit.

Whatever they publicly state, double at the very least.

“With all due respect, sir,” Daniel told the C.E.O. deferentially as they left the meeting, “you’re delusional.” This wasn’t Fitch or even S&P. This was Moody’s, the aristocrats of the rating business, 20 percent owned by Warren Buffett. And the company’s C.E.O. was being told he was either a fool or a crook by one Vincent Daniel, from Queens. — The End by Michael Lewis

Moody’s is still fucking delusional.

The Dimensions Of Our Doom

November 12, 2008

This post has since been updated. There is now a fourth component. If you’ve read this post before, come back to read the final piece.

This post is a permanent sticky. It will remain here even after the completion of this blog on December 31, 2008. Scroll down one for the latest posts.

On January 1, the first day of this blog, I did a post titled And Now A Word About Our Future….

I could see even then things were going to get Bad.

What I didn’t know at all were the total dimensions of our doom. Since then I’ve seen a bigger picture.

That larger picture has caused me to change my blog banner and create this permanent sticky post. Update: The fourth link necessitated yet another blog banner change.

Click to read the rest …

Blog Notes: Changes

November 12, 2008

Things might look messy for a while as I wrestle with WordPress.

No blog banner, for example!

Reference: 100+ Free Mac OS X Applications

November 12, 2008

100+ Free Applications For Mac OS X

Most of the time, Windows users are reluctant to switch to a Mac. One amongst many reasons is that they found it hard to search for free softwares/applications for the Mac. Some of them have already switched to a Mac, but they’re still running Windows OS on a Mac.

It’s such an irony that actually there are mountains of free Mac applications available for us. After days of working on this, I’ve come out with list of free and useful Mac applications.

I’ve categorized and arranged the order of applications so that it will be extremely easy for you to find applications you need for your Mac.

Continue reading and you will see fabulous list of 100+ Free Mac OS X Applications!

This will be useful to me. Some day.

— via Twitter from aboutbooks

R.I.P. Writer Marilyn Ferguson

November 12, 2008

Marilyn Ferguson: New Age writer

Marilyn Ferguson wrote many influential books about the human brain and psychiatric practices. Her best-selling The Aquarian Conspiracy (1980) did much much to establish the “New Age” movement in popular culture. Ferguson emerged in Los Angeles in the late 1960s where she studied pschiatry and became interested in the workings of the human brain. Her ideas were formalised her book the Brain Revolution (1973). Her Brain/Mind Bulletin from 1975 would gain 10,000 subscribers and establish her reputation.

Click the link for more. Clearly she was way ahead of her time.