Meltdown

[ezodisy]

This is pure speculation as I doubt reliable trade numbers from the 1930's are even available for any meaningful comparision against today numbers.

maybe, but there's no speculation about this:

Over the past five months since the credit crunch intensified, US's real exports have plunged at a 49% annual rate, while real imports have fallen at a 30% pace. The pace of the decline is unprecedented in modern times, economists say

lol!

[Coopmv]

Miami Herald: 1 in 5 home loans in Florida are delinquent

There is quite a bit of foreign money in the Florida real estate market.  There are also residents of the US who do not even live in FL but decided to speculate in that market.  Those people would just go to the poor house ...

[ezodisy]

you've got to laugh at all those muppets on Bloomberg who keep talking about a bottom. You don't ever hear them talking about a top, do you?

[BachQ]

NYT (14 mar 09): On March 15 (today), AIG will pay $165 million in new bonuses (up to $6.5 million per executive) in addition to previous bonuses of $121 million. AIG is now 80% taxpayer-owned after having received $170 billion in bailout funds.

Subsequent update: Despite Timmy Geithner's demands to cut bonuses, AIG "still plans to distribute about $165 million on March 15 because of legally binding contracts."

WASHINGTON (AP) -- President Barack Obama declared Monday that insurance giant American International Group is in financial straits because of "recklessness and greed" and said he intends to stop it from paying out millions in executive bonuses. "It's hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay," Obama said at the outset of an appearance to announce help for small businesses hurt by the deep recession. "How do they justify this outrage to the taxpayers who are keeping the company afloat," the president said.

you've got to laugh at all those muppets on Bloomberg who keep talking about a bottom. You don't ever hear them talking about a top, do you?

lol.    Does an abyss really have a bottom?  and if so, will we know it when we see it?  (but yeah, I always wonder about people who obsessively focus on bottoms).

[BachQ]

Can anybody explain WTF this means:

Telegraph (16 Mar 09): The International Monetary Fund is poised to embark on what analysts have described as "global quantitative easing" by printing billions of dollars worth of a global "super-currency" in an unprecedented new effort to address the economic crisis.

WTF?

[BachQ]

The credit card industry "may end up with possibly the highest credit card losses the industry has ever experienced," Bank of America Chief Executive Kenneth Lewis said on Tuesday.

U.S. credit card defaults rise to 20 year-high

[Coopmv]

U.S. credit card defaults rise to 20 year-high

The foolishness of these American bankers know no bounds.  They have been offering truckloads of credit cards to college kids, who are the equivalent of subprime borrowers ...

[Coopmv]

lol.    Does an abyss really have a bottom?  and if so, will we know it when we see it?  (but yeah, I always wonder about people who obsessively focus on bottoms).

No one is smart enough to call the top or bottom of ANY market until it has been reached ...

[ezodisy]

No one is smart enough to call the top or bottom of ANY market until it has been reached ...

Oscar called the top to within 1 point

[BachQ]

Marc Faber taking calls on a Canadian TV station.

http://watch.bnn.ca/the-street/march-2009/the-street-march-5-2009/#clip146489

http://www.youtube.com/v/-l_QLmbXCvs

Marc Faber: "US government bond market is a disaster waiting to happen [given that the govt's need] to cover its fiscal deficit will be very, very high"

Marc Faber: "we may still have a rally (in the S&P) until about the end of April and probably then a total collapse in the second half of the year ... when it becomes clear that the economy is a total disaster." 

[ezodisy]

man I love Marc Faber. Did you see his interview with Bernie on Asian Bloomberg? It's on the front page of that channel (4 parts). Bernie's the only TV host with a (wicked) sense of humour

[BachQ]

Thanks for the tip (see below).

man I love Marc Faber. Did you see his interview with Bernie on Asian Bloomberg? It's on the front page of that channel (4 parts). Bernie's the only TV host with a (wicked) sense of humour

Marc Faber in Hong Kong (Bloomberg 16 mar 09): "The global economy is really stuffed"

Part 1/4 http://www.youtube.com/v/IwQaHNm4adM

Part 2/4 http://www.youtube.com/v/WL-larBxL7k

Part 3/4 http://www.youtube.com/v/6jm1Hy2qfnk

Part 4/4 http://www.youtube.com/v/Aamfc_GGsIA

Bernie Lo is a funny guy! 

[BachQ]

Bloomberg: Hidden Pension Fiasco May Foment Another $1 Trillion Bailout

[Coopmv]

Bloomberg: Hidden Pension Fiasco May Foment Another $1 Trillion Bailout

Pension liabilities may force the local governments to follow what the private sector has been doing for the past 20 years.  That is, stop offering pensions altogether and switching over to some defined contribution plans.  After all, it is the tax dollars that pay for these generous pensions and there are only so many tax increases these local governments can make. 

Like I have said before, the US should mind its own business and sharply rolls back on its contribution to the IMF funds and cut back on its foreign aids. 

[ezodisy]

what we were saying a few pages back

Shell CEO: Unsure Whether Enough Oil Supply After Downturn
VIENNA -(Dow Jones)- Royal Dutch Shell PLC (RDSB.LN) Chief Executive Jeroen van de Veer said Wednesday the tailing off in oil exploration spending globally threatens to cause supply concerns once the global economic downturn recedes.
"It's not very clear that we (will) have enough supply after the economic crisis ends" to meet the recovery in crude demand, van de Veer told an energy conference here.
The economic crisis has forced many small- and medium-sized oil producers to delay or cancel projects, particularly in the U.S.
Van der Veer said such developments were putting the industry into its usual "boom and bust" cycle, in which a period of weak prices undermines investment and lays a foundation for higher prices as demand outpaces supply.

[ezodisy]

Can anybody explain WTF this means:

Telegraph (16 Mar 09): The International Monetary Fund is poised to embark on what analysts have described as "global quantitative easing" by printing billions of dollars worth of a global "super-currency" in an unprecedented new effort to address the economic crisis.

WTF?

Special Drawing Rights?

I don't know what that's all about but it sounds good for gold and I'll be buying heavily at $400! lol

[BachQ]

what we were saying a few pages back

Shell CEO: Unsure Whether Enough Oil Supply After Downturn
VIENNA -(Dow Jones)- Royal Dutch Shell PLC (RDSB.LN) Chief Executive Jeroen van de Veer said Wednesday the tailing off in oil exploration spending globally threatens to cause supply concerns once the global economic downturn recedes.
"It's not very clear that we (will) have enough supply after the economic crisis ends" to meet the recovery in crude demand, van de Veer told an energy conference here.
The economic crisis has forced many small- and medium-sized oil producers to delay or cancel projects, particularly in the U.S.
Van der Veer said such developments were putting the industry into its usual "boom and bust" cycle, in which a period of weak prices undermines investment and lays a foundation for higher prices as demand outpaces supply.

Yep, this is all very true.  Matt Simmons had been warning about how this disinvestment in oil infrastructures (resulting from the economic collapse) will worsen the effects of peak oil ...

Speaking of peak oil, the oildrum declared yesterday that 2008 is the official year the planet reached peak oil -- i.e., the year that global oil production peaked.  Why is this important?  Because, given the geological limitations on extractable oil, once demand for oil reignites, production will be unable to meet demand, oil prices will skyrocket, and any efforts for economic recovery will be constrained correspondingly.  There can be no economic growth/recovery without cheap energy (i.e., cheap oil).



-- Using an expansive definition of oil, world oil production peaked in 2008 at 81.73 mbd (crude oil + lease condensate + oil sands + natural gas plant liquids).

-- Or, excluding natural gas plant liquids, world oil production peaked in 2008 at 73.79 mbd.

-- Or, excluding oil sands + natural gas plant liquids, considering only conventional crude oil, world oil production peaked in 2005 at 72.75 mbd.

[BachQ]

Eastern European countries most at risk of default (excluding Ukraine) based on 5-yr CDS spreads:

1. Romania
2. Bulgaria
3. Hungary
3. Croatia
5. Turkey
6. Poland
7. Czech Republic

[BachQ]

Coop, see also below ...

Pension liabilities may force the local governments to follow what the private sector has been doing for the past 20 years.  That is, stop offering pensions altogether and switching over to some defined contribution plans.  After all, it is the tax dollars that pay for these generous pensions and there are only so many tax increases these local governments can make. 

Like I have said before, the US should mind its own business and sharply rolls back on its contribution to the IMF funds and cut back on its foreign aids. 

The Next Catastrophe (Feb 09): Think Fannie Mae and Freddie Mac were a politicized financial disaster? Just wait until pension funds implode. ... "State, local, and private pension plans covering millions of government employees and union workers with 'defined benefit' accounts are teetering on the brink of implosion, victims of both a sinking stock market and investment strategies influenced by political considerations."

From January to October 2008, defined benefit funds—those promising a predetermined amount of retirement money to the payee—averaged losses of 26 percent, according to Northern Trust Investment Risk and Analytical Services, making it the worst year on record for corporate and public pension funds. *** Companies with defined-benefit pensions may soon find themselves choosing between making payroll or pumping money into their pension plans. If companies are forced to make up the shortfall out of their assets, which seems likely, that would send profits tumbling even more, further destabilizing the stock market. And even with a cash infusion, many businesses might still have to freeze or even cut benefits.

[BachQ]

Coop, see below.

Pension liabilities may force the local governments to follow what the private sector has been doing for the past 20 years.  That is, stop offering pensions altogether and switching over to some defined contribution plans.  After all, it is the tax dollars that pay for these generous pensions and there are only so many tax increases these local governments can make. 

Like I have said before, the US should mind its own business and sharply rolls back on its contribution to the IMF funds and cut back on its foreign aids. 

Pension plan woes for 2008:

  --  Their value has tumbled the most in 20 years;
  --  They are now underfunded by over $400 billion;
  --  Underfunded pension plans force companies to invest their ever-dwindling cash reserves into pension plans rather than in their business operations, thereby jeopardizing the financial health and/or survival of the business. 
  --  This tradeoff entails an adverse feedback loop as follows: the economic meltdown causes pensions to become underfunded, which in turn forces businesses to divert scarce cash reserves toward pension obligations, which in turn deprives companies of funds necessary for growth and/or survival, which in turn worsens the overall financial meltdown, which in turn reinforces the adverse feedback loop.



Business Week

Washington Post