It’s Monday, and the pundits are all saying that it looks like a wild ride this week for Wall Street, as the "subprime slime" problem morphs into "mark to myth" problems. Captain Alpha Male asks, "Can something be done?"
If you’ve got any tips for the Captain, post them here, along with any links, stories, ideas, whatever that you think Doomers might appreciate.
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Moin,
Fleckensetin
The Fed digs us a deeper hole
Qatar’s Delta Drops 10.5 Billion-Pound Sainsbury Bid
The Fed digs us a deeper hole / Fleckenstein
http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/TheFedDigsUsADeeperHole.aspx
Why measuring the extent of subprimes losses is so difficult
@Captain: “You can’t. It’s a logical all-encompassing process that is called ‘the Minsky cycle’”
or, as they write in today’s Barrons:
“Banking has always been a business in which the craziest, least-careful players begin to set the rules for everyone toward the end of a credit cycle. Once the late-cycle, easy-money experiments in financial “sinnovation” got rolling, the main options are to play along or opt out of the game, before it ends with loss and regret.”
A must-read piece on Minsky (credit) cycles is “Are We at The Peak of a Minsky Credit Cycle?” by renowned economist Nouriel Roubini @ http://www.rgemonitor.com/blog/roubini/208166
AustrianEconomist-
I was of the opinion that stopping the tsunami or righting the ocean liner would probably be easier myself. : )
Jan-Martin-
Fleckenstein’s best line:
I hope he emailed a copy to Jim Cramer!
Captain Alpha Male – two suggestions, since you can travel backwards in time
1) Go back to 2003 and beat Alan Greenspan over the head with a two-by-four until he understands that companies that create credit require regulation and oversight.
2) Go back further to 2001 and ridicule the idea of an “ownership society”, where everyone regardless of income can have the home they want. “Suzanne researched this” Gah.
Moin Twist,
i agree.
I also like his take on fiat currencies and the $
“Thanks to the suggestion put forth by a reader of my daily column, I have come up with the new name for our currency. Henceforth, it shall be called the xera. That’s a combination of Xerox, for the piece of Xerox paper that it is; lira, which in the past was one of the world’s chronically weak currencies; and, most importantly, the fact that it sounds like zero. That is ultimately where the xera is headed.”
“Two wrongs don’t make a right” at least thats what I was always taught as a youngster. Since subprime was and is wrong anything done to help it would be another wrong. Let the market work it out. And who would we be helping if we did do something the underwater buyer or the fat cats on wallstreet. We know who would get the help.
Bond Buyers Are Losing Confidence
Jan-Martin-
Great link, although I think a better title would be “Bond buyers stop buying now that they have a better grasp of the situation.” “Losing confidence” sounds like they have nothing to worry about, and are merely having an emotional reaction.
Financial Ground Has Shifted Under a Record Deal
http://www.nytimes.com/2007/11/07/realestate/commercial/07kushner.html?ref=business
Citigroup Credit Swaps Near Five-Year High on Subprime Concerns
Goldman Pay Tops Bear Stearns’s Slumping Market Value
Bank of England Keeps Key Rate Unchanged at 5.75%