| Tired. |
[May. 24th, 2009|02:51 am] |
I remember reading long ago, in the footnotes of Wired magazine, a lament for the departing editor, then the magazine changed. It used to be this amazingly vibrant and offbeat thing. Like somebody had taken lightning and bottled it. I used to buy it in a drab art supplies shop in Lincoln. It was amazing.
“We decided to put the Internet-founding subculture behind us, and be more mainstream with technology. We banned Burning Man and drug culture and the letters TCP/IP,” he said.
Which would account in no small measure for the car & clothes adverts and for why it sucked so hard, the more awards it won. There are high crimes and misdemeanors, the destruction of the old Wired is one of the former, the "relaunch" of Wired UK in the current economic environment is one of the later.
If Wired in it's current form is killed by that which spawned it, it's not a tragedy, just the natural order re-asserting itself. I figure I better stop here lest I say harsh things. |
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| probably |
[May. 22nd, 2009|07:31 am] |
Should I comment on the credit outlook of the UK? Probably. Given the size of the debt overhang of UK PLC, the fact that it was put on negative credit watch was not a surprise. I imagine when it happens to the USA thought, that that will spook a few people. Still pondering entry about Japan's relevance to the US, but the story is still evolving.
In other news, I'm this week's star letter in Micro Mart, now that did surprise me.
Happy birthday LJ! |
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| Anarchy in the UK |
[Feb. 28th, 2009|01:01 pm] |
On the premise of "good guitar music" I turned on NME tv, who appropriately enough for the times, after Black Sabbath and the Verve, then played the Sex Pistols, as above, which struck as me as odd, as at that point they couldn't actually play their instruments very well, let alone decent guitar. Which then caused me to muse on the common man reclaiming music from the prog rock aristocracy, who could play, but had lost the plot. Then Mr Rotten, young though he was, name checked the NME, (and not the MPLA, the UDA or the IRA) and talked about council housing, and as the music got it's act together, we reached the end of the tune, and the NME in it's wisdom chose to render "get pissed, destroy!" as "get , destroy!" Then it went to commercial, an advert for insurance Which I thought was particularly gratuitous.
Normally I avoid the music channels, they're a younger man's game. But I do feel sorry for the youth of today who are being force fed a safe, consumer friendly pastiche of their own culture. The Adidas advert that followed was an ad man's dream in that respect, artfully mixing celebrity and "bling" and overlaying it all with an R&B track at an exclusive house party, It checks all the right boxes. I can't say I was ever a great fan of punk, but yes, I do think I've "been cheated." |
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| will they or won't they? |
[Feb. 20th, 2009|08:14 pm] |
There are dark clouds on the horizon for Citgroup and Bank of America today. First there is this report, which reckons that neither will live to see May. Which you may think alarmist, but for where I found it, and articles like this one at bloomberg.
Then there is the report that Citigroup has cut all lending in Denmark or the fact that Citi is currently off around 20% on the day. You could buy both and have change from $40bn, while Apple, a maker of PC's, phones and media players, will cost you North of $80bn. Citi is hovering around the $2 a share mark. This is really not going to be pretty.
I guess we'll find out if they're right very soon.
Update: doing a little more research if what I'm reading is correct, then Citi are paying well over the odds for retail deposits, you only do that if you're desperate. This could be terminal. |
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| counting down the hours |
[Feb. 17th, 2009|08:29 pm] |
Things are happening, in a "coming to a head" manner. California, (the state of) one of the larger economies in the world, still has no budget, and is planning to idle/fire 20,000 employees. It's getting closer to default. Then there is news that another large financial institution, (Stanford Financial) has been charged by the SEC with "massive fraud" reportedly $8bn of assets is uncounted for, while the law have raided offices, etc. More doubt about the fiduciary responsibility, or lack thereof, is not what the financial world, (or investors) need right now. Cue more capital flight, and lower capital adequacy ratios.
Elsewhere it would appear that Poland is preparing to intervene in the currency markets to prop up the zloty, (the Polish currency) Poland doesn't have a lot of currency reserves, but then again it's out of options. This is but the "wet edge" of the storm that is Western European banking system's exposure to Eastern European debt financing in foreign currencies. If only 10% of the loans go bad, then the Austrian financial system will implode, which is unfortunate as the estimates are for a 20% default rate. Germany may help, but as an export driven economy, it, like Japan, is hostage to rapid foreign demand shortfalls, and thus may not be able to carry the can alone.
Meanwhile on the other side of the world, nervous glances are being shot at Dubai, who may or may not get bailed out by Abu Dabi, but given that the UAE finances are increasingly fragile, it may just come down to who blinks first.
Still, RIM, (maker of the crackberry) is apparently creating 3000 new jobs, allegedly. Whoo! |
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| In memoriam |
[Jan. 18th, 2009|12:55 pm] |
You know you're getting old when parts of your childhood begin to fade. So it's sad news that today Tony Hart died. He was a man of infinite jest, and a good artist, that made "art" seem less formidable from the stuffy world of childhood. Rest in Peace Tony, we will remember you. |
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| Need |
[Jan. 13th, 2009|08:36 pm] |
The BBC are reporting, "Israelis strike 60 Gaza targets" complete with video of big explosions. I imagine that the Israeli's are in hurry to get finished, they need to break the will of the Arabs.
Meanwhile, Palestinian Authority President Mahmoud Abbas accused Israel of trying to "wipe out" his people.
"This is the 18th day of the Israeli aggression against our people, which has become more ferocious each day as the number of victims rises," he said.
"Israel is keeping up this aggression to wipe out our people over there."
I suppose that shouldn't surprise me, but it does. That's at least one thing Israel has achieved.
Less surprising is UN secretary general, Ban Ki-moon, who has the following to say:
He has implored Israel and Palestinian militants to halt the fighting in Gaza immediately.
Mr Ban said too many people had died and there had been too much civilian suffering.
"My message is simple, direct and to the point: the fighting must stop," Mr Ban told a news conference in New York ahead of his departure on Tuesday for the Middle East.
"In Gaza, the very foundation of society is being destroyed: people's homes, civic infrastructure, public health facilities and schools."
Hamas meanwhile, keep fighting, and keep firing rockets into Israel, which means the Israeli's need to keep fighting too. The question is, how far will Hamas push the IDF? |
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| The habits of a lifetime |
[Dec. 22nd, 2008|05:25 pm] |
I've been going into consumer electronics shops and to a lesser extent "computer shops" (in so far as they are different) all my adult life and for a large part of my adolescence. For almost all of that time, except at the very beginning, It's been a disappointing and occasionally pointless & tawdry affair. Largely because when I ask a question, the shop assistants look at me blankly or like I'm from Mars. So over the years I've resorted to simply asking for the manual if I actually want to know something. Most of the time I go in to see how bad things look, and how much the average punter is being ripped off. I frequently target lost looking people, and offer the benefit of my expertise, usually steering them to another shop where they won't get screwed in the process.
Today I held my tongue, because truth to tell, I went out of morbid curiosity.
The high street in the UK belongs to one firm, DSG, they have always been hated, at least by most reasonable people, but they're all but a monopoly, so it's not like you have a choice.
DSG are going to the wall, their long term debt was downgraded a few moths ago, and is currently pricing in default 5-6 months hence. Today there were rumours that they were paying creditors in stock. This means they're short of cash, it means the end is nigh. Knowing all this I was somewhat surprised to find that upon going into the local superstore today that unlike the bulk of the high street, they're not having a sale. Which is either quite smart, in that they might squeeze a few more shekels from the punters over the Christmas period, meaning they can actually have a real sale come the new year. Or it's suicidal, in that their margins are being shredded by the fact that other people in the same space, games & gadgets, etc. are already running a sale, and by the time we reach the new year the average punter, their core demographic may well have run out of money.
I did think of walking up to a shop assistant and asking if the rumours were true, I imagined they'd ask where I heard that, and I'd tell them brightly it was the FT. But once I got there and I saw the listless youths I was suddenly struck by something akin to guilt and remorse, in that I didn't want to laugh in somebody's face knowing thy would soon lose their job. So I wandered the halls, and marvelled at the corporate stupidity on display. I doubt it will be here next time I visit.
So while I may feel sorry for the staff, I will shed no tears for the passing of the stores. The average "man on the street" will benefit from seeking more qualified and knowledgeable help elsewhere. I did wonder what will become of the extended warranties they so famously foist on all their customers. But I guess we shall find out soon enough. |
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| Natural laws have no pity |
[Dec. 12th, 2008|08:51 pm] |
Credit cards are a zero sum game.
The Economist on the counter productve moves in tinkering with the credit card repayment system:
EVEN the best-intentioned policies can fall prey to the quirks of human behaviour, as a new study of credit-card repayment finds. In order to stop borrowers from being socked by an accumulation of unpaid interest whenever they fail to pay their bill, there are laws requiring credit-card companies to specify a minimum payment in each statement. But these may do more harm than good, suggests Neil Stewart, a psychologist at Warwick University.
[...]
Mr Stewart presented 413 people with mock credit-card bills of £435.76 (about $650) that were identical—except that only half mentioned a minimum payment of £5.42. Participants were asked how much they would pay.
Among those inclined to pay the bill in full, the presence of the minimum payment hardly made any difference. However, those who wanted to pay just part of it handed over 43% less on average when presented with a minimum payment. In the real world, this would roughly double interest charges. [link]
The FT on the perils awaiting The US consumer once the fed meets to enfoce changes needed to "protect" the consumer:
The Federal Reserve board will meet this week to finalise changes to rules governing the $970bn credit card business.
Widely hailed by consumer groups as urgently needed reforms to protect borrowers, the changes could lead to the banking industry losing more than $10bn in annual interest payments, says a study by the law firm Morrison & Foerster.
This could prompt credit card lenders to raise prices and tighten lending standards, reducing the availability of credit for US consumers. [link]
the UK govt just tightened rules too, governing the notice required to consumers about interest rate rises. I expect that will result in far more people getting letters than would otherwise have been the case.
Like I said, credit cards are a zero sum game. |
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| Oh Bettie! |
[Dec. 12th, 2008|07:11 pm] |
Like many men my age I discovered Bettie Page though "the Rocketeer" comic of Dave Stevens, (later made into a movie.) His work was amazing, and looks like nothing else. He painted by hand, so it took him ages to produce a page, but the results were well worth the wait. He specialised in doing long limbed amazons, "Sheena of the jungle" was another of his covers, along with another for Airboy. All of them inspired by Bettie. Sadly she too is gone, at the age of 85. I guess there is just "something about Bettie" that special brand of chutzpah and vulnerability that envelops her and Marilyn Monroe which men can't help flocking too, ah the dreams of callow youth. |
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| The toll of the bell. |
[Dec. 3rd, 2008|05:35 pm] |
Struggling homeowners granted ‘mortgage holiday’
Gordon Brown is to grant homeowners in financial difficulty the right to demand a two year 'mortgage holiday' guaranteed by taxpayers, in a dramatic bid to prop-up the housing market
Breaking news, says the FT, personally I think it's economic suicide, and here's why:
First read this, by Prof Noriel Roubini, it's bleak, but he's got a point. The read this, by Martin Wolf the FT's chief economic commentator. Which is commented on by Yves Smith, here. Who's very switched on about this sort of thing and is another "go to" source, much like recent Nobel laureate Prof. Paul Krugman, for those of us who're actually interested in all this.
Finally read this, from Robert Peston, the BBC's business editor. Especially the last few paragraphs:
House prices are taking weeks and months to find a floor, that low-point from which recovery can begin, because many potential sellers are biding their time, hoping that something will turn up - while buyers are waiting for a crash that delivers bargains.
So the brutal truth is that a great downward whoosh in prices, the moment of catharsis, is most likely to come as and when there's a great surge in forced selling, which would be the consequence of a widely anticipated rise in repossessions.
But if all banks follow the lead of Royal Bank and add another three months to the schedule of seizing a home, well that's another three months to wait for the laws of supply and demand to exert their inevitable downward pressure on prices.
Which also means that there's another three months to wait for the crippling housing deflation to end - which also postpones a wider economic recovery, since the housing market is not hermetically sealed from the rest of the economy.
Doubtless the government will exert massive pressure on other banks to follow the example of Royal Bank, but they shouldn't kid themselves that interfering in the market brings no costs.
This is akin to Japan propping up the banks, rather than forcing them to sell assets or close them down, it's an incredibly costly way to postpone the day of reckoning, which, however personally or politically uncomfortable, must come. It will also tie up bank capital and further restrict credit. Why? Because banks can no longer foreclose to get their money back.
It's stupid and senseless and all but guarantees the coming recession will be prolonged, though given we're on the cusp right now, the depth is as yet unknown. The real dark side is that the USA will once again ape Gordon Brown's policy.
Over to you Mr Wolf:
In short, if the world economy is to get through this crisis in reasonable shape, creditworthy surplus countries must expand domestic demand relative to potential output. How they achieve this outcome is up to them. But only in this way can the deficit countries realistically hope to avoid spending themselves into bankruptcy.
Some argue that an attempt by countries with external deficits to promote export-led growth, via exchange-rate depreciation, is a beggar-my-neighbour policy. This is the reverse of the truth. It is a policy aimed at returning to balance. The beggar-my-neighbour policy is for countries with huge external surpluses to allow a collapse in domestic demand. They are then exporting unemployment. If the countries with massive surpluses allow this to occur they cannot be surprised if deficit countries even resort to protectionist measures.
So either China starts spending to offset the massive expenditure the West is about to extend to financially illiterate home owners, or we're setting ourselves up for a repeat of the 1930's. Smoot-Hawley and all.
But the offer of support to families living beyond their means may be seen as unfair by borrowers who have planned carefully and made sacrifices to meet their financial obligations.
The state intervention in the housing market may also distort house prices as Britain’s decade long property boom unwinds.
I figure I can wait until January to see what happens after the US inauguration, but then it's time to start thinking/doing some contingency planning for, as Krugman would say, "a return to depression economics"
If you've got any sense you'll be doing the same.
UPDATE: it may not actually be that bad, since Pesto reckons it will only save 9000 families and there are doubt that all the banks have signed up to it. So in which case, what was the point? |
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| R.I.P Tanta |
[Dec. 1st, 2008|01:47 pm] |
| [ | Tags | | | death | ] |
| [ | Current Location |
| | work | ] |
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I was telling somebody how good she was only the other week, and now she is no more. She will be missed:
The blogger Tanta, an influential voice on the mortgage collapse, died Sunday morning in Columbus, Ohio.
Tanta, who wrote for Calculated Risk, a finance and economics blog, was a pseudonym for Doris Dungey, 47, who until recently had lived in Upper Marlboro, Md. The cause of death was ovarian cancer, her sister, Cathy Stickelmaier, said.
I can't say I know much about her life, but it's not every blogger that gets a write-up in the print edition of the New York Times. Which if nothing else tell you how respected she was:
Tanta used her extensive knowledge of the loan industry to comment, castigate and above all instruct. Her fans ranged from the Nobel laureate Paul Krugman, an Op-Ed columnist for The New York Times who cited her in his blog, to analysts at the Federal Reserve, who cited her in a paper on "Understanding the Securitization of Subprime Mortgage Credit."
She was good, and the blogosphere is a poorer place for her absence. |
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| Drowning, not waving |
[Nov. 28th, 2008|01:13 am] |
There is once again far too much going on, but so it goes.
I had another prepared, but it appears to have gone AWOL on the way to my inbox this afternoon, so instead you'll have to make do with the following, under the headline, Weep for Woolies, Robert Peston has the following to say:
Although Woolworth had been one of the UK's weaker retailers for years - propped up by a decade of benign, debt-fuelled trading conditions which we now know to have been unsustainable - it was done in by a sudden deterioration both in the real economy and in financial markets that took hold four weeks ago.
And it's the suddenness of how everything turned bad that shocks - and means Woolies will not be the last casualty.
Up till then, Woolies sales had been broadly flat. Then, on an underlying or like-for-like basis, sales dropped off a cliff, falling by double-digit amounts in percentage terms.
Around the same time, many of its suppliers found they could no longer insure against the risk that Woolies would no be able to pay its bills. So Woolies was forced to pay suppliers in cash for all that important Christmas stock.
Besides being a great place for kids, "Woolies" as it's always been known, is/was also a good place to buy Games & CD's, etc. This happens to be because it ran a very large wholesale distribution arm that supplied most of the high street majors. So if you wanted anything along that line now may be a time to buy, since the wholesale unit is going into administration too.
Hopefully this will mean that DSGI will go to the wall, they will not be missed. Then the UK punter will be forced to go to a small retailer for computer and electronic goods, where they will probably get not only better advice and service, but better prices too. If "rip off Britain" has a poster child it is surely Dixons, as was.
Then we have Brad Setser writing on China which is good as I suspect that China is far more important to the globally economy than is widely reckoned. His seven point are:
1. China was no workers’ paradise during the boom years.
2. China really is a manufacturing and investment driven economy.
3. China’s current slowdown was made in China, not in the world.
4. There is more bad news ahead.
5. The fiscal stimulus is real, but modest.
6. The last thing anyone needs to worry about is fall in Chinese demand for US treasuries.
7. The way China manages its reserves matters immensely for the world not just China.
I also read a good article in the economist this past weekend, Desperately seeking cash Which was insightful in interesting ways:
Faced with huge difficulties of their own, banks have tightened their purse strings, lending less and driving up the cost of credit to consumers and corporations. That is compounding an already grim prognosis for the world economy. This week Japan said its economy had shrunk for the second quarter running. Much of Europe is in a similar state. And a new survey by the Federal Reserve Bank of Philadelphia has shown that many economists believe the United States went into recession in April and will not emerge from it until the middle of 2009.
Opinions differ as to how long and deep the global slowdown might be. But the combination of a battered banking system and shell-shocked consumers mired in debt suggests it could be particularly hard for many businesses, whatever the duration. So bosses are rushing to secure as much cash as they can now to see their companies through the downturn.
Oh, and Happy Thanksgiving, should you be so afflicted :) |
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| The high cost of credit |
[Nov. 5th, 2008|07:45 pm] |
Another lousy day on the markets, and now the slow and steady economic spiral begins. If you've not paid off your credit cards by now then I guess it's only a matter of time before they start asking for their money back:
Nov. 5 (Bloomberg) -- Credit card companies were shut out of the market for bonds backed by customer payments in October for the first time in more than 15 years, as investors shunned the debt amid the global credit freeze.
A weakening job market and a looming recession are making it harder for consumers to make monthly payments, eroding confidence among investors about the safety of credit-card-backed bonds. It's the first month since April 1993 that there have been no sales, according to Wachovia Corp. data. Issuers sold $17.1 billion of the debt in October 2007, the data show.
"Nobody is eager to put money to work given the uncertainty in the market," said James Grady, a managing director at Deutsche Bank AG's asset management unit. "When you think it can't get worse, it continues to get worse. There is not a demand" for these bonds.
Top-rated credit card-backed securities maturing in three years traded at a gap, or spread, of 475 basis points over the London interbank offered rate during the week ended Oct. 30, JPMorgan Chase & Co. data show, 25 basis points higher than the previous week. The debt was trading at 50 basis points more than Libor in January.
The higher cost to sell the bonds makes it more expensive for banks and credit card companies to fund loans to customers. New York-based American Express Co. paid 160 basis points more than Libor at a Sept. 11 sale of the securities compared with 30 basis points over the benchmark at a similar sale in October 2007, Bloomberg data show. [link] |
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| "unsinkable" |
[Oct. 31st, 2008|10:52 am] |
| [ | Tags | | | death | ] |
| [ | Current Location |
| | work | ] |
| [ | mood |
| |  amused | ] |
Many people may not find this funny, but I read it and found it hugely amusing:
AIG RAISES FUNDS FROM NEW FED FACILITY
Posted at 03:48 by Tracy Alloway
AIG has raised funds from a new Fed lending facility to repay part of a
$123bn Fed loan that is keeping the stricken US insurer alive, in a move
that could deepen the political backlash over its use of taxpayers'
money. AIG said yesterday that it had tapped a Fed lending window
designed to kick-start the flagging commercial paper market and used
some of it to pay back part of the government loan.
To see this article online and to comment:
http://ftalphaville.ft.com/blog/2008/10/31/17659/aig-raises-funds-fro
Talk about robbing Peter to pay Paul...
As I told my office colleagues, "they are now officially moving deck chairs on the Titanic" |
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| It's going to be one of those days |
[Oct. 24th, 2008|01:45 pm] |
| [ | Tags | | | death | ] |
| [ | Current Location |
| | work | ] |
| [ | mood |
| | uneasy | ] |
As a I write this the UK FTSE 100 is off 7%, and the Nikkei and the Kospi were both off around 10% while the the Dow and the S&P futures were limit down, prompting the following press release:
Oct. 24 (Bloomberg) — The New York Stock Exchange plans to open for U.S. trading today after trading in futures on the Standard & Poor’s 500 Index and the Dow Jones Industrial Average was limited.
NYSE Euronext, which operates securities exchanges on both sides of the Atlantic, will open the U.S. market, said the company’s New York-based spokesman Richard Adamonis. The exchange also operates stock markets in Paris, Brussels, Lisbon and Amsterdam and all opened as usual this morning, according to the company’s Paris-based spokeswoman Caroline Denton.
Earlier today, trading in futures on the S&P 500 and the Dow Average was limited after declines in the contracts of more than 6 percent triggered a so-called limit down restriction.
The S&P 500 futures will not trade below 855.20 until U.S. exchanges open for regular trading at 9:30 a.m. New York time, said Jeremy Hughes, a London-based spokesman for the Chicago Mercantile Exchange. Dow Average futures won’t trade below the 8,224 level, he said. The “limit down'’ suspension allows both contracts to trade above those levels, he said.
On top of that there are rumours that GM & Ford may file for bankruptcy protection, after some truly horrendous figures, and stock price falls from the European car & truck makers. Some of them off 20% or more.
Meanwhile, OPEC cut 1.5Mn barrels a day, which did nothing to help the oil price which is off 7% or so, while gold is has broken out to the downside looking like it's going to drop below $700 a Troy ounce.
Those who like risk, and can cover margin calls, may want to short government bonds, since the price is going through the roof, and you'll make a killing when it falls back to earth. Provided you don't lose your shirt in the process. |
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| Ah.. |
[Oct. 22nd, 2008|01:01 am] |
Not really the sort of thing you want to read before going to bed, but so be it. Brad Setser is pondering the end of Bretton Woods 2. The system whereby foreign countries bank roll the US Govt. by investing surplus cash in America in the form of dollar currency reserves and investments in US agency & treasury debt. No more he says:
I hope that the process of adjustment now underway isn’t as sharp as I fear. The US economy gradually can shift from producing MBS for sale to US investors flush with cash from the sale of safe securities to China and Saudi Arabia to producing goods and services for export – but it cannot shift from churning out complex debt securities to producing goods and services overnight. Indeed, in a slowing US and global economy, improvements in the US deficit will likely come from faster falls in US imports than in US exports – not from ongoing growth in US exports.
But right now it looks like there is a real risk that the adjustment won’t be gradual. And it certainly looks like the flow of Chinese (and Gulf) savings to US households over the past few years has produced one of the largest misallocations of global capital in recent history.
US taxpayers are going to be hit with a large tab for the credit risk taken on by undercapitalized financial intermediaries. Chinese taxpayers may get hit with a similar tab for the losses their central bank incurred by overpaying for US and European assets as part of its policy of holding its exchange rate down. The TARP is around 5% of US GDP. There are plausible estimates that China’s currency losses will prove to be of comparable magnitude. Charles Dumas puts the cost at above 5% of GDP:
If the US current account deficit were to fall rapidly, the US Government would either have to sell increasingly more debt, (the death spiral problem) or would have to radically rethink spending priorities. Frankly I don't see how the US economy could compete with the "screwdriver economies" of Asia on an equal footing, given the high overhead of US regulation to prevent exploiting workers etc. Or with German efficiency and engineering if it came to that.
Better balance the budget quickly then, "Shanghai, I think we have a problem" |
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| Desperate measures |
[Oct. 21st, 2008|04:14 pm] |
Oct. 21 (Bloomberg) -- The Federal Reserve Board invoked emergency authority to purchase assets from money market mutual funds that are having difficulty meeting redemptions from their investors.
"The short-term debt markets have been under considerable strain in recent weeks as money market mutual funds and other investors have had difficulty selling assets to satisfy redemption requests," the Fed said in a statement released in Washington today. The new program "should improve the liquidity position of money market investors."
The Fed will lend to a series of special units that will buy certificates of deposit, bank notes and commercial paper with a remaining maturity of 90 days or less. The new effort is called the Money Market Investor Funding Facility, and is aimed at supporting a private-sector initiative, the Fed said.
"In terms of the redemptions money-market funds are seeing, and hedge funds as well, any of these moves by the Fed are going to help," Mike Holland, chairman and founder of Holland & Co. LLC in New York, said in a television interview. "We are going to see those redemptions eased."
The private special-purpose vehicles set up under the program being announced today will finance their purchases by selling asset-backed commercial paper. The New York Fed will also lend to the facilities on an overnight basis at the discount rate, which stands at 1.75 percent. [link]
This is in addition to the the other ad-hoc fund that buys commercial paper (CP, short term corporate debt) from companies after the money market funds stopped buying it. So now money markets are having trouble selling CP too. Hmmmm. I know a lot of hedge funds parked cash in money markets as it was safer than investing it in equities, if they're having to liquidate too, then I'm guessing the Fed's choices are getting ever more binary.
Now we have a number, the FT, are reporting the fund to be worth $540bn.
"A billion here, a billion there, and pretty soon we're talking real money" |
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| accademic discourse |
[Oct. 2nd, 2008|06:20 pm] |
In the unlikely event anyone wonders what happened to the economics, lets just say that I view much more discussion as accademic. Whether or not the US congress passes the bailout bill, (or whatever the hell they're calling it this week) and I have to admit I have my doubts. I think the outcome is going to be the same. I think the crisis of confidence that was affecting "wall street" has now spread to the high street/main street. That being the case, almost anything done from this point on will not engender confidence where needed. Indeed, the fact that politicians are floundering on both sides of the Atlantic, and the central bankers appear to have withdrawn from the field of battle, would suggest to me that while not all hope is lost, and things will, at some point, "get better" as the bard would say:
"Now is the winter of our discontent..."
I remember reading a Matt Howarth comic long ago, (his hatching lines are to die for) I can't remember whether is was Savage Henry or the Post Brothers. But I remember One of the Brothers, Russ, I think, (possibly Ron too) Boche, Conrad Schnitzler and possibly the Elder God Cthulu, doing a house invasion up on a hill. "tearing shit up" killing people, and blowing out a side of the house. Just so they had a grandstand seat to watch the reactor they rigged down in the valley below go "Boom!"
If nothing else, 10 years of absent minded study, and 18 months of graft, have at least armed me with the same view. I always figured this was appropriate music for such times:
Please allow me to introduce myself
I'm a man of wealth and taste
Ive been around for a long, long year
Stole many a mans soul and faith
And I was round when Jesus Christ
Had his moment of doubt and pain
Made damn sure that Pilate
Washed his hands and sealed his fate
Pleased to meet you
Hope you guess my name
If I have to tell you Who it's by you've not been keeping up :) |
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| Legend |
[Sep. 28th, 2008|11:23 am] |
Sadly Paul Newman died today. He was a great actor, and by all accounts a good man. R.I.P |
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praxis22's journal
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