Here.
My favorite one:
9) What’s the capital of Iceland?
About £3.50
Yeah, it’s a British link.
Category: Finance
Argentina Plans to Renationalize Pensions
Of course, Moody’s investor’s services hates the idea.
I will make a note on the bigger picture: When Argentina privatized its pension system over a decade ago, it set the stage for its brutal economic implosion in the first place, because it stripped the government of all reserves in the process.
In response to the reports of the plans the Argentina markets dropped like a stone (13%).
I will note Brad Delong’s blog, and this quote:
The private retirement system, set up in 1994 to help bolster capital markets, owns about 5 percent of companies listed on the Buenos Aires stock exchange and 27 percent of shares available for public trading, data compiled by pension funds show.
The market crash was inevitable. It would either happen now, or when the population cohorts start sellling stocks when they retire.
This should have been done sooner.
Another Bald Guy Gets Top Bailout Bailiwick
I did not come up with bon mot, rather it was John Carney at Clusterstock did. He was talking about James H. Lambright, former head of the Export-Import Bank, who has been tapped to serve as interim Chief Investment Officer for the Troubled Asset Relief Program (TARP).
Mr. Carney notes that we should be concerned, and not just because we have, “Bald midwestern ex-Wall Streeter running our banking system.”
In his time at the Ex-Im Bank, it appears that his main accomplishment was to remove it from congressional scrutiny by making it self financing.
In English this means that Congress has no control, but is still liable for the bill if the Ex-Im bank sees losses.
And now they want him to be in charge of investments at TARP….Lovely.
Gary Larson Works for Standard & Poors and Caused the Credit Meltdown?
I’ve always wondered what he did after he shuttered his daily The Far Side job, and now we know that he got a job at S&P, because, when cows are at the center of malfeasance, Gary Larson will be there:
Official #1: Btw (by the way) that deal is ridiculous.
Official #2: I know right…model def (definitely) does not capture half the risk.
Official #1: We should not be rating it.
Official #2: We rate every deal. It could be structured by cows and we would rate it.
(emphasis mine)
Gary Larson rules our world.
Not Enough Bullets: South Korean Edition
A South Korean financial analyst, Han Sang-choon, was fired for saying that much of the losses people have experienced in the market are the result of greed:
“I reckon people haven’t cashed in their funds because of personal greed and expectations (of profits),” he told an investor, according to quotes from the Friday TV show that appeared widely in South Korean media.
There is a saying, “In Wall Street, the Bears make money, and the Bulls make money, and the Pigs lose.”
Alan “Bubbles” Greenspan Is Shocked At Meltdownan
So now Greenspan is shocked that a completely unregulated market leads to irrational speculation and abuse.
At the core of the theory capitalism is the idea that selfish people thinking only of themselves are what make the system work.*
If you had ever gotten your head far enough out of Ayn Rand’s long dead festering ass, you would have noticed that there were dozens, if not hundreds, of people you worked with who told you that this was going to happen.
You sir, are not a tool, because a tool has a use.
*Yes, I am paraphrasing Keynes.
Economics Update
I think that the first story is a real biggie, the Insurance Bureau at the Financial Supervisory Commission of Taiwan has forbidden Insurance companies in that nation* from buying mortgage backed securities from the GSEs, Fannie Mae, Freddie Mac and Ginnie Mae.
The scare quote of the article is, The FSC has not only limited insurance company exposure to Fannie, Freddie and Ginnie bonds and mortgage-backed securities, but has decided that existing credit ratings are meaningless.“
Taiwan is not huge in relation to world GDP, but it’s a lot bigger than Iceland….We may be seeing the first furtive steps toward an exit that will likely end in a stampede.
If I’m wrong about a stampede away from US securities, it’s clear that there
is a stampede away from hedge funds…Makes sense, why pay these guys something like 20% when they are losing money.
In the real world or ordinary people and work, the weekly US jobless claims were worse than forecast, 478,000. The standard caveat about this being a noisy metric applies.
I would be remiss in not noting that the 4 week moving average fell, to 480,250 from 484,750.
BTW, it looks like the credit crunch is not near over, because very little let up on interest rate spreads. (H/T Calculated Risk.)
For what it’s worth, Oil prices were up a bit, because there are indications that OPEC might actually make a small supply reduction stick amongst its members.
The thing that really scares me is the fact that Washington Mutual’s Credit Default Swaps will be sold at 57¢ on the dollar, and this is considered a relief to investors.
Even scarier is the little note at the bottom that losses in the Lehman debacle, when investors got 8¢ on the dollar ended up losing less money than expected, because it was a small group who all sold in a big circle to each other.
What happens when one of the members of this circle jerk goes down in flames?
*Or whatever the frack the Taiwan’s status is right now.
They are Lucky that they are White Folk
Because we now have a report that Iceland is going to accept an IMF bailout in the amount of $6 billion, about $18,740.10 per person living there, and about 1/2 of the island’s GDP.
Luckily for them, they are white, because the “strict measures” to be demanded by the IMF will be along the lines of, “a stipulation that Iceland quickly deleverage its three nationalized banks Kaupthing, Landsbanki and Glitner.”
If they were more darkly complected, you would likely see things demanded like a reduction of the minimum wage, the abolition of free primary schooling, the abolition of the government health care system, higher sales taxes and lower income taxes to favor investors, the sale of public utilities to foreign investors, a roll back of labor rights and employment protections, and aggressive measures to depress domestic consumption at because it would theoretically benefit exports.
BTW, that the last one is called creating poverty, which is fine for the n*gg*rs, but just wouldn’t do for the pale skinned blue eyed folk.
Countrywide, the Gift that Keeps on Giving
Well, it looks like one of my predictions, that Citi CEO Ken Lewis would be shown to be a complete moron to take on the corrupt and insolvent mortgage lender Countrywide Financial is turning out to be true.
Cases in the point: Countrywide, and thus Citi is being sued over accusations it blackballed appraisers who gave accurate assessments of property values, and Illinois Department of Financial and Professional Regulation just forbade them from making new loans in the state for the foreseeable future.
Just in Case You Were Wondering How Frozen Up The Credit Markets Are
They are now finding that companies in bankruptcy cannot ginf debtor-in-possession and exit financing (DIP loans), which are used to provide cash to companies in reorg.
Debtor-in-possession, or DIP, financing is essential for the lawyers, layoffs and other restructuring necessary for a company’s rebirth. Exit financing is used when a company “exits” reorganization. Banks have been eager to take part in this market because the loans are the first to be paid back and command high interest rates.
(emphasis mine)
This is about as safe as a loan can be. Even if the reorg fails, you are at the head of the line for liquidation, and the interest rates are very good, and people are still unwilling to lend.
Not Enough Bullets, Regulation Edition
Even after the government bailout, AIG is still lobbying to relax regulations on its business:
When the U.S. took control of failing mortgage titans Fannie Mae and Freddie Mac, it prohibited them from lobbying. But it hasn’t banned the practice at AIG, a huge insurer that is still 20%-owned by public shareholders.
AIG is currently working to ease some provisions in a new federal law establishing strict oversight of mortgage originators, according to state regulators. The law requires that originators be licensed by the states, and that they supply comprehensive information so state regulators can track their activities.
To quote Bruce Cockburn, “If I had a rocket launcher, some son-of-bitch would die.”
I Can Haz Breton Woods
The vid begs to go LolCat LolCat.
Funny.
Making a Bad Situation Even Worse
It looks like Hank Paulson and his bully boys at the US Treasury will be actively encouraging banks to merge with government money.
So, because some banks have to be bailed out, at taxpayer expense, because they are too big to fail, we should have even more really big banks, because it benefits the guys that Secretary Paulson plays golf with.
Well, it appears that some Senators have not viewed this development positively, and they just sent Paulson a “Whiskey Tango Foxtrot” letter regarding this.
Not Enough Bullets, Bloddy Kraut Edition
Well, the Germans have a bailout plan, one they developed after stiffing the rest of the Euro zone, and now they have been browbeaten into softening pay limitations of their bailout package by bank executives making noises about not accepting state aid.
It was to be a hard pay limit of €500,000 ($666,000), but that was too much for the upper failed management at the failed banks to accept.
Where is my revolver.
Not Enough Bullets, Damn Limey Edition
It appears taht Lloyds Staff ‘Will Still Get Bonuses’, even after the government injected £5.5 billion into the institution.
Burn, Baby, Burn!
It appears that prosecutors are looking at senior Lehman executivesincluding former CEO Richard Fuld.
Standard concerns, fraud, misleading statements, possible obstruction of justice, etc.
I’m hoping for some jail time.
A Handy List of Federal Reserve Measures Taken Since August 2007
And it’s a rather long list.
The Fed is done here…their quiver is empty.
Is This a Bailout, or a Fix for a Junkie?
James Saft notes that what we are seeing, “The market’s reaction to the new superbailout follows a familiar pattern: relief, disappointment and the need for a higher dose of the same medicine, is distressingly similar to the behavior of an addict.
I agree….I think we should start arresting and imprisoning bank executives, like we do junkies.
In any case, it’s a good read.
Economic Funnies
H/T The Big Picture.
Intrade Presidential Campaign Markets Manipulated
It appears that someone manipulated the market to drive up John McCain’s numbers.
There’s a surprise. You have a company making book, and the press reporting on the bets being made as a prediction, and someone takes it upon themselves to manipulate the market to get better press coverage.
What took them so long?