{"id":197258,"date":"2008-02-19T17:55:00","date_gmt":"2008-02-19T22:55:00","guid":{"rendered":"https:\/\/www.panix.com\/~msaroff\/40years\/2008\/02\/19\/economics-update-519\/"},"modified":"2008-02-19T17:55:00","modified_gmt":"2008-02-19T22:55:00","slug":"economics-update-519","status":"publish","type":"post","link":"https:\/\/www.panix.com\/~msaroff\/40years\/2008\/02\/19\/economics-update-519\/","title":{"rendered":"Economics Update"},"content":{"rendered":"<p>It appears that US banks have <a href=\"http:\/\/www.ft.com\/cms\/s\/0\/66db756a-de5d-11dc-9de3-0000779fd2ac.html\">borrowed massive amounts of money from the Federal Reserve<\/a>, over $50 billion, using assets that have very little value in the market right now.  They get money for shovels of the big sh&amp;#pile<\/p>\n<p>Credit Suisse will be  <a href=\"http:\/\/www.nytimes.com\/2008\/02\/20\/business\/worldbusiness\/20bank.html?ex=1361163600&amp;en=2846865666078e32&amp;ei=5090&amp;partner=rssuserland&amp;emc=rss&amp;pagewanted=all\">writing down $2.8 billion because of &#8220;pricing errors&#8221; of assets<\/a> (also <a href=\"http:\/\/money.cnn.com\/2008\/02\/19\/news\/companies\/bc.apfn.switzerland.credit.ap\/index.htm?postversion=2008021910\">here<\/a>), and has suspended the traders involved.<\/p>\n<p>Errors, my ass.  If these were &#8220;errors&#8221; as opposed to fraud and\/or bad systems, the net would be closer to $0.<\/p>\n<p><a href=\"http:\/\/www.rgemonitor.com\/blog\/roubini\/244768\/\">The Forthcoming \u201cJingle Mail\u201d Tsunami: 10 to 15 Million Households Likely to Walk Away from their Homes\/Mortgages Leading to a Systemic Banking Crisis<\/a><\/p>\n<p>It is now expected that the <a href=\"http:\/\/www.bloomberg.com\/apps\/news?pid=20601087&amp;sid=aEjj9lH3toDI&amp;refer=home\">U.K. government will keep British home mortgage giant Northern Rock nationalized for years<\/a>, in order to avoid a massive exposure to the taxpayer.<\/p>\n<p>In the increasingly dire world of insurance, we have predictions that <a href=\"http:\/\/www.bloomberg.com\/apps\/news?pid=20601087&amp;sid=aOeT8cK2ZxVk&amp;refer=home\">bond insurer splits may lead to an explosion of lawsuits<\/a>, as the separation valuable (municipal) side and the insolvent (big sh$%pile) side involves a lot of loss for the holders of non-municipal paper.  Additionally, <a href=\"http:\/\/money.cnn.com\/2008\/02\/19\/news\/newsmakers\/mbia_ceo\/index.htm?postversion=2008021909\">MBIA&#8217;s CEO has stepped down<\/a>, and has been replaced by his predecessor.<\/p>\n<p><img decoding=\"async\" src=\"http:\/\/titanic.gov.ns.ca\/gizmos\/chair2.jpg\" \/><br \/>Deck chairs, Titanic.<\/p>\n<p>In the lawsuit category, we have <a href=\"http:\/\/www.washingtonpost.com\/wp-dyn\/content\/article\/2008\/02\/18\/AR2008021802084.html?hpid=moreheadlines\">investor activists calling for more accountability in management<\/a>, which is generally a prelude to shareholder suits and the like.<\/p>\n<p>Finally, we have <a href=\"http:\/\/money.cnn.com\/2008\/02\/19\/news\/international\/china_inflation.ap\/index.htm\">inflation in China hitting an 11-year high<\/a>, 7.8%.  It&#8217;s likely that this will drive interest rates up in China, placing downward pressure on the US dollar.<\/p>\n<p>And if that doesn&#8217;t make you think that it will soon be raining brokers in Wall Street, Noriel Roubini is predicting between 1<a href=\"http:\/\/www.rgemonitor.com\/blog\/roubini\/244768\/\">0 and 15 million home owners simply walking away from their homes,<\/a> because they will be underwater with their mortgages, and cannot afford their resetting mortgages.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>It appears that US banks have borrowed massive amounts of money from the Federal Reserve, over $50 billion, using assets that have very little value in the market right now. They get money for shovels of the big sh&amp;#pile Credit Suisse will be writing down $2.8 billion because of &#8220;pricing errors&#8221; of assets (also here), &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1261,973,1004,1265],"tags":[],"class_list":["post-197258","post","type-post","status-publish","format-standard","hentry","category-bubble","category-economy","category-finance","category-housing-crash"],"_links":{"self":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/197258"}],"collection":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/comments?post=197258"}],"version-history":[{"count":0,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/197258\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/media?parent=197258"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/categories?post=197258"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/tags?post=197258"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}