Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.

Friday Open Thread

by afew Fri Oct 3rd, 2008 at 09:50:22 AM EST

It's what it says on the box:

Friday.Open.Thread


Display:
metavision:
ust got a message from Helen:

"...let ET know Sassafras is getting better. May leave hosp. Monday. Helen."

Let´s do whatever auspicious dance lefties do for this ocassion!  Yeeesssssssss!

<please copy to OT>

Our knowledge has surpassed our wisdom. --Charu Saxena. by metavision on Fri Oct 3rd, 2008 at 02:22:24 PM CET

by afew (afew(a in a circle)eurotrib_dot_com) on Fri Oct 3rd, 2008 at 09:51:42 AM EST
Excellent :)
by ThatBritGuy (thatbritguy (at) googlemail.com) on Fri Oct 3rd, 2008 at 10:03:08 AM EST
[ Parent ]
That's good to hear!
by Fran on Fri Oct 3rd, 2008 at 11:48:43 AM EST
[ Parent ]
May leave hosp. Monday.

Excellent!

Less excellent: they said at the post office that my postcard is to arrive on Saturday or Monday...

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Fri Oct 3rd, 2008 at 12:08:24 PM EST
[ Parent ]
I only was able to put it in the mail today - as I found out the village I live in has no postcards. :-(

Maybe they send it to her when she is home again.

by Fran on Fri Oct 3rd, 2008 at 12:46:59 PM EST
[ Parent ]
Same for me - it takes mail some 1.5 weeks from this side of the planet to travel up north.

But you can't wish someone to stay longer in the hospital, really. :)

by Nomad on Fri Oct 3rd, 2008 at 04:47:56 PM EST
[ Parent ]
Good news indeed!
by In Wales (inwales aaat eurotrib.com) on Fri Oct 3rd, 2008 at 12:25:26 PM EST
[ Parent ]
Who (what?) is (a) Sassafras?

They tried to assimilate me. They failed.
by THE Twank (yatta blah blah @ blah.com) on Fri Oct 3rd, 2008 at 12:47:41 PM EST
[ Parent ]
Reminds me: Who (what?) is (a) Twank?

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Fri Oct 3rd, 2008 at 12:56:21 PM EST
[ Parent ]
MAN!  Ask a reasonable question around this place and see what happens! :)

Time to go for my walk.  Later y'all.

They tried to assimilate me. They failed.

by THE Twank (yatta blah blah @ blah.com) on Fri Oct 3rd, 2008 at 01:00:08 PM EST
[ Parent ]
No, really. English is not my first language (nr for many others on this site). I have no clue what your nick denotes.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Fri Oct 3rd, 2008 at 01:31:58 PM EST
[ Parent ]
Nickname (bastardized last name) from my college years, early '70's.

My brother and I went to the same local private college, he was three years ahead of me.  He was known as Twank, I became the Baby Twank, younger. My brother graduated, I became Twank but I have taken TWANKING to a whole new level, thus THE Twank (accept no substitutes).

They tried to assimilate me. They failed.

by THE Twank (yatta blah blah @ blah.com) on Fri Oct 3rd, 2008 at 02:16:09 PM EST
[ Parent ]
Sassafras - Wikipedia, the free encyclopedia
Sassafras is a genus of three[1][2] species of deciduous trees in the family Lauraceae, native to eastern North America and eastern Asia.[2]
by Fran on Fri Oct 3rd, 2008 at 12:57:14 PM EST
[ Parent ]
Originally, it was the main ingredient in root beer. At some point the medical community discovered that if you could drink several hundred gallons of sassafras extract in two minutes you had better odds at getting some obscure disease. So sassafras content was reduced or cancelled from some root beers. However, sugar content in root beer has gone up over the decades with no apparent outcry, myself excepted.
by de Gondi (publiobestia aaaatttthotmaildaughtusual) on Fri Oct 3rd, 2008 at 05:19:13 PM EST
[ Parent ]
Excellent!

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Fri Oct 3rd, 2008 at 01:15:24 PM EST
[ Parent ]
Great!

Hey, Grandma Moses started late!
by LEP on Fri Oct 3rd, 2008 at 02:01:43 PM EST
[ Parent ]
Apologies for repeating. This is a crucial credit event...

Litigation World | Citigroup v. Wachovia | 3 Oct 2008

NEW YORK - Wachovia says it agreed to be acquired by San Francisco-based Wells Fargo & Co. in a $15.1 billion all-stock deal. But Citigroup now demands that Wachovia abide by the terms of its earlier deal to buy Wachovia's banking operations.

The clash sets up a battle over who will win Charlotte, N.C.-based Wachovia.

The Citigroup deal would have been done with the help of the Federal Deposit Insurance Corp., but the Wells deal would be done without it. The head of the FDIC said the agency is standing behind the agreement it made with Citigroup.

Citigroup says its agreement with Wachovia provides that Wachovia will not enter into any transaction with any party other than Citi or negotiate with anyone else.

Hostile Takeover | Wachovia LBO taps Wells Fargo | 3 Oct 2008

NEW YORK (Reuters) - Wells Fargo & Co agreed to buy Wachovia Corp for more than $16 billion, besting a U.S. government-backed Citigroup Inc bid for some of its assets, in a deal that would catapult Wells Fargo to the top ranks of national consumer banks.
[...]
Wells is buying the whole of Wachovia, including its retail brokerage Wachovia Securities, and its asset management unit, Evergreen. Citi had just bid for Wachovia's banking assets.
[...]
A Wachovia spokeswoman said neither Citigroup nor the Federal Deposit Insurance Corp is involved in the transaction. Citi officials were not immediately able to comment, although the Citi/Wachovia deal was featured prominently on Citi's website Friday morning.

"This deal enables us to keep Wachovia intact and preserve the value of an integrated company, without government support," said Wachovia President and Chief Executive Robert Steel [GS alum, Under Sec. Treasury a/o July 2008, Blueprint signatory a/o March 2008].

and an augur of Centurion Paulson's wars to come ...

Diversity is the key to economic and political evolution.

by Cat on Fri Oct 3rd, 2008 at 12:21:29 PM EST
Wells Fargo offer is stock swap for holding company and all subsidiaries. Citigroup offer is cash and credit for Wachovia Bank. Both Wells Fargo and Citigroup are bank holding companies whose markets are OCC, FDIC valued "core bank", top five consolidated assets.

Bloomberg

Citigroup, led by Chief Executive Officer Vikram Pandit, dropped as much as 15 percent in New York trading after San Francisco-based Wells Fargo said it would buy Wachovia in an all- stock transaction. Citigroup announced a $2.16 billion offer for parts of the company four days ago.

"Citi has substantial legal rights regarding Wachovia and this transaction," the New York-based company said in a statement. "Wachovia's agreement to a transaction with Wells Fargo is in clear breach of an exclusivity agreement between Citi and Wachovia."
[...]
"The FDIC stands behind its previously announced agreement with Citigroup," FDIC Chairman Sheila Bair said in a statement today. "The FDIC will be reviewing all proposals and working with the primary regulators of all three institutions to pursue a resolution that serves the public interest."
[...]
The Wells Fargo transaction values Charlotte, North Carolina-based Wachovia, led by CEO Robert K. Steel, at $7 a share, the companies said in a joint statement today. Wachovia traded at $6.80, up 74 percent from yesterday. Wells Fargo rose 8 percent to $38.16.

More GS games, promised shareholder dilution

"It provides superior value compared to the previous offer to acquire only the banking operations of the company," Richard Kovacevich, 64, chairman of San Francisco-based Wells Fargo, said in a statement. "Wachovia shareholders will have a meaningful opportunity to participate in the growth and success of a combined Wachovia-Wells Fargo that will be one of the world's great financial services companies."

Wachovia shareholders get 0.1991 shares of Wells Fargo common stock for each share they own. Wells Fargo expects charges related to the acquisition of about $10 billion, and the company said it will issue as much as $20 billion of new securities, mostly common stock.

PR claims Wells Fargo is "saving" taxpayer funds. That is a specious argument. Further, if Wells Fargo passes the judicial test despite Citigroup's contract, the legitimacy of "taxpayer equity" claimed by Paulson's extraordinary authorities in the Bailout Bill is effectively void. (Which isn't to understate the arbitrary powers extended to Treasury's agents in principle and in any event.) International investors will balk at risking capital for any equity claims on US-domiciled banks.

Diversity is the key to economic and political evolution.

by Cat on Fri Oct 3rd, 2008 at 12:45:09 PM EST
[ Parent ]
PR claims Wells Fargo is "saving" taxpayer funds. That is a specious argument.

Unless Citi left valuable assets on the table in their deal, Wells Fargo's offer would seem to save the FDIC money at least.  It would appear that Citi was trying to cheery pick here and Wells saw value it was willing to pay for.  While current FDIC funds come from bank fees, with the pending increase of guarantees to $250,000 and pending bank take-overs, anything that preserves FDIC reserves would seem, quite likely, to save future taxpayer's funds.  Has Citi put up funds for Wachovia which it might lose?  Else why would this cause international investors to balk at future deals?

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Oct 3rd, 2008 at 01:04:08 PM EST
[ Parent ]
First, the Bailout Bill includes FDIC credit limit minimum and not limited to insurance increase of $150K per account. The Bailout Bill passed today as both Citigroup and Wells Fargo lobbyists intended.

1 Oct 2008

The agency has access to a total of $70 billion in short- and long-term lines of credit. It can also charge banks higher premiums. The 451-page Senate bill would increase the amount of deposit insurance coverage to $250,000 through next year from the current $100,000 in a bid to reverse the deteriorating crisis of confidence in the marketplace.

The FDIC had asked for an unlimited cap on insurance limits but was rejected by lawmakers, according to sources familiar with the FDIC request.
[...]
According to the legislation, the FDIC may ask Treasury for "a loan or loans in the amount or amounts...without regard to the limitations on such borrowing."

The bill also seeks similar requests for the National Credit Union Administration, the regulator of federal credit unions. The U.S. House of Representatives is "likely" to vote on Friday on a latest version of the bailout package, a House Democratic aide said on Wednesday.

FDIC Chairman Sheila Bair said on Tuesday that raising the limit to $250,000 would serve a dual purpose. It would reassure depositors and provide more liquidity to banks for lending.

Bair implies FDIC will exercise credit facility to "supervise" undercapitalized banks, i.e. to forestall bankruptcy.

Therefore the federal government pledges public debt increases of equivalent amount in the event of future bank failures resulting from underlying asset defaults.  To that extent, both Wells Fargo and Citigroup bids to acquire are backstopped. No advantage gained by either's shareholders on that credit account.

No FDIC "savings" for taxpayers; huge potential loss gained by taxpayers, regardless of M&A outcome.

AR:

Unless Citi left valuable assets on the table in their deal, Wells Fargo's offer would seem to save the FDIC money at least.  It would appear that Citi was trying to cheery pick here and Wells saw value it was willing to pay for.

Second, precisely: Citi cherry-picks Wachovia FSB asset Wachovia Bank. Together internal asset valuation and market conditions ("distress") justify the offer of cash ($1.9B) and credit (i.e. explicit FDIC financing, in addition to Citigroup explicit loss reserve of $42B, of Wachovia Bank outstanding liabilities, including demand depositors' insurance).

Cash (USD) is a "valuable asset" if CDS participants are to be believed.

Third, Wells Fargo's offer is a stock swap only that dilutes the equity of both companies' shareholders. The fact [!] that Wells Fargo values Wachovia FSB at ~$16B of Wells Fargo outstanding shares (priced mark-to-market) attests only current market conditions ("distress") --AND-- incentive of controlling shareholders to profit from sale of preferred and trust preferred warrant during a period of arbitrageuer volatility that typically accompanies M&As.

More important, in acquiring Wachovia FSB brokerages along with Wachovia Bank, Wells Fargo-Wachovia controlling shareholders benefit from huge Bailout Bill money market and ASB guarantees (so-called insurance) payouts for cheap priced "troubled assets". It is not now evident how the two firms valued Wachovia "troubled assets" engrossed by the wholesale deal. If FDIC valued Wachovia depositors alone at $282B, bet your life the Wells Fargo values "troubled assets" at ZERO.

AR:

Else why would this cause international investors to balk at future deals?

Would you purchase common or preferred shares of a US-domiciled bank at any price, if the US did not protect your contractual rights? I wouldn't even if my name were Warren Buffet. Because I'd have to buy a few circuit court judges, too, for life.

Diversity is the key to economic and political evolution.

by Cat on Fri Oct 3rd, 2008 at 02:49:58 PM EST
[ Parent ]
In other words, Wells Fargo has no skin in the game. Its offerr provides no incentive, no internal mechanism, no cash, to prevent subsidiaries' defaults which benefit from federal insurance payouts and increasing public debt.

Diversity is the key to economic and political evolution.
by Cat on Fri Oct 3rd, 2008 at 03:03:30 PM EST
[ Parent ]
Thanks for the background.  It is difficult for those of us without experience in that industry to evaluate the consequences of proposed actions.  Same for Congress.  Thanks also for the link to the Jessie's Cafe article on default swaps.  $54 trillion in bets!  Any sense how badly which firms will be hurt.  It is trying to finance the unwinding of default swaps that I find most inappropriate for the US Government to underwrite.  I cannot see how the taxpayer gets any value for such expenditures.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Oct 3rd, 2008 at 03:39:24 PM EST
[ Parent ]
Allow me to set your hair afire.


OCC Q1 Report on Bank Derivatives Activities (pdf). Click to enlarge. The pdf is rather instructive. Take a peek. Maturity of these contracts range 2 mo - 5 years.

Notice Wells Fargo-Wachovia combined exposure is tiny be comparison (< 1%) to the top 3 "core banks." That's good and bad headline news. On one hand, derivatives trading was 4% of Wachovia gross Q1 and trending higher Q2. On the other, combined, the merger may be insufficiently capitalized to settle. Could be their positions net zero, everyone goes home relieved though.

Migeru posted an article here about notional value.

Diversity is the key to economic and political evolution.

by Cat on Fri Oct 3rd, 2008 at 05:28:42 PM EST
[ Parent ]
sems to be a party to every single derivative deal on the planet... Did anyone say 'too big to fail'??

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Fri Oct 3rd, 2008 at 05:44:51 PM EST
[ Parent ]
how about you get a 700 billion cash injection from the government, and it turns out the financiers have already been playing pass the parcel wit the debt, and somebody is getting cast loose with the debt while the other banks run off with the cash.

Any idiot can face a crisis - it's day to day living that wears you out.
by ceebs (ceebs (at) eurotrib (dot) com) on Fri Oct 3rd, 2008 at 05:48:06 PM EST
[ Parent ]
Didn't they invent CDSs?

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Fri Oct 3rd, 2008 at 05:59:05 PM EST
[ Parent ]
here for pdf file.

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Fri Oct 3rd, 2008 at 06:04:03 PM EST
[ Parent ]
While bank supervisors normally have concerns about market or product concentrations, there are three important mitigating factors with respect to derivatives activities.  First, there are a number of other providers of derivatives products, such as investment banks and foreign banks, whose activity is not reflected in the data in this report.  Second, because the highly specialized business of structuring, trading, and managing derivatives transactions requires sophisticated tools and expertise, derivatives activity is appropriately concentrated in those institutions that have made the resource commitment to be able to operate this business in a safe and sound manner.  Third, the OCC has examiners on-site at the largest banks to continuously evaluate the credit, market, operation, reputation and compliance risks of derivatives activities.
[Drew's WHEEEEE™ Technology]

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Fri Oct 3rd, 2008 at 06:06:59 PM EST
[ Parent ]
Noted Neo-Con Praises Obama

Charles Krauthammer criticized McCain for attempting a third "hail Mary" with his "suspension" of his campaign, from which he had to climb down:  

(McCain's) frenetic improvisation has perversely (for him) framed the rookie challenger favorably as calm, steady and cool."
 
Krauthammer still appears to prefer that McCain win, but not enough to overcome his own need to make sagacious comments.  He continues:
Oliver Wendell Holmes Jr. famously said of Frankin Roosevelt that he had a "second-class intellect, but a first-class temperment."  Obama has shown that he is a man of limited experience, questionable convictions, deeply troubling associations... and an alarming lack of self definition--do you really know who he is and what he stands for?  Nontheless, he's got both a first-class intellect and a first-class temperment.  That will likely be enough to make him president.
Perhaps he is now concerned to assure access and relevance under an Obama Administration.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Oct 3rd, 2008 at 12:47:51 PM EST

Perhaps he is now concerned to assure access and relevance under an Obama Administration.

They're all, with notable exceptions, a bunch of whores who will say/print anything for their own profit.  The days of Walter Cronkite et al are long over.

They tried to assimilate me. They failed.

by THE Twank (yatta blah blah @ blah.com) on Fri Oct 3rd, 2008 at 12:57:06 PM EST
[ Parent ]
Krauthammer? Nah. Krauthammer is a propagandist. He won't say/print anything, the ideology remains the same. Once the persons he may hope would act accordingly changes.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Fri Oct 3rd, 2008 at 01:30:39 PM EST
[ Parent ]
Poor wittle Chuckie.  Running out of material to fill his nausea-inducing columns since the Stray Cock Express allowed his psychosis to get out in the open, apparently.

I wouldn't give him access.  Give Gene Robinson access, if we're choosing a WaPo columnist.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Fri Oct 3rd, 2008 at 01:19:28 PM EST
[ Parent ]
My operative word was that he might be concerned to preserve access...  Still it is a nice quote to have to throw back at Mac in ads.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Oct 3rd, 2008 at 02:39:55 PM EST
[ Parent ]
Just backing off from the Cottage Cheese/Lime Jello Disaster™
by afew (afew(a in a circle)eurotrib_dot_com) on Fri Oct 3rd, 2008 at 02:50:25 PM EST
[ Parent ]
i've never seen him interview anyone, is it his style?

what an assclown, he always looks like someone pissed in his drink and he had just drunk it anyway.

the lip curl almost at elvis level.

he does have a good brain, but what an attitude!

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Fri Oct 3rd, 2008 at 04:33:32 PM EST
[ Parent ]
His politics make it difficult for me to be as charitable to him as you are, melo.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Oct 3rd, 2008 at 09:38:30 PM EST
[ Parent ]
i know, i have a hard time separating the personal from the political too.

he's so cartoon evil, even the name is sci-fi.

a figment of a diseased image-in-nation

...with good brain bloodflow-

even gwb could get smirking lessons

'The history of public debt is full of irony. It rarely follows our ideas of order and justice.' Thomas Piketty

by melo (melometa4(at)gmail.com) on Sat Oct 4th, 2008 at 08:05:07 AM EST
[ Parent ]
I love how we attach random words to the end of the word "ass" in the blogosphere (asshat, assclown, etc).  I don't quite get it, but I've always found it hilarious.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Sat Oct 4th, 2008 at 09:05:39 AM EST
[ Parent ]
Just another aspect of the medium.


She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre
by ATinNM on Sat Oct 4th, 2008 at 10:39:56 AM EST
[ Parent ]
Aspect.

Get it?

Ass-pect.

(I am unappreciated.  :-(

:-D

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Sat Oct 4th, 2008 at 01:36:09 PM EST
[ Parent ]
but I've always found it hilarious.

in that case did you see  Rogers Profanisaurus when you were over here?

Any idiot can face a crisis - it's day to day living that wears you out.

by ceebs (ceebs (at) eurotrib (dot) com) on Sat Oct 4th, 2008 at 10:57:31 AM EST
[ Parent ]
No.  Do tell.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Sat Oct 4th, 2008 at 11:07:37 AM EST
[ Parent ]
it's a book of swearing

Any idiot can face a crisis - it's day to day living that wears you out.
by ceebs (ceebs (at) eurotrib (dot) com) on Sat Oct 4th, 2008 at 11:11:32 AM EST
[ Parent ]
McClatchy Newspapers, Lax oversight? Maybe $64 million for D.C. pols explains it:

Since 2001, eight of the most troubled firms have donated $64.2 million to congressional candidates, presidential candidates and the Republican and Democratic parties, according to data from the nonpartisan Center for Responsive Politics...

Both political parties have become beholden to Wall Street.

For a mere $64.2 million investment, Wall Street will be able to profit $700 billion. That is an amazing, ungodly ROI!

by Magnifico on Fri Oct 3rd, 2008 at 01:17:43 PM EST
Gratifying to see McClatchy running a major piece on the corrupting effect of the current campaign finance system.    Talk about having an effect at the the margin!  Every US citizen should write their senators and congressman and ask how much they have received in contributions from failed or bailed-out institutions since 2000.  Cc your state's newspaper of record.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Oct 3rd, 2008 at 02:47:33 PM EST
[ Parent ]
More from the same article.
...experts interviewed by McClatchy said that inaction by the Congress helped set the stage for the current crisis.

Some state regulators, recognizing early signs of trouble in housing markets, sought help from Congress when the Bush administration adopted rules barring states from enforcing tough laws targeting predatory lending -- the practices that were enabling unqualified applicants to obtain subprime mortgages.

With Wall Street serving a key role in buying, bundling and reselling subprime mortgages, state officials couldn't get Congress to intervene, said John Ryan, the executive vice president of the Conference of State Bank Supervisors."



"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Fri Oct 3rd, 2008 at 03:22:22 PM EST
[ Parent ]
Which is why we need to end this bullshit of organizations donating money.  People should be allowed to donate (up to a certain limit of no more than $1-2,000 IMO), but corporations/PACs/etc are not people.  They don't have a vote, so they shouldn't be allowed to donate.

Be nice to America. Or we'll bring democracy to your country.
by Drew J Jones (pedobear@pennstatefootball.com) on Sat Oct 4th, 2008 at 09:07:50 AM EST
[ Parent ]
ROLL CALL to come ... more important ...

Schwartzenegger petitions Treasury for $7B loan --CA has insufficient funds to make goddam payroll 15 Oct.

Diversity is the key to economic and political evolution.

by Cat on Fri Oct 3rd, 2008 at 01:50:35 PM EST
Dow Jones down 300 points on the news. Will have post up soon.

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Fri Oct 3rd, 2008 at 03:39:39 PM EST
[ Parent ]
The MSM was immediately reporting that the credit markets were still seized after the bill was signed and this lead to the point drop, so luckily there isn't any debunking needed.

you are the media you consume.

by MillMan (millguy at gmail) on Fri Oct 3rd, 2008 at 04:25:59 PM EST
[ Parent ]
The Dow Jones Index is not the economy

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Fri Oct 3rd, 2008 at 04:37:49 PM EST
[ Parent ]
Thank you!

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Fri Oct 3rd, 2008 at 04:40:04 PM EST
[ Parent ]
should I post it here or is it too US-centric?

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Fri Oct 3rd, 2008 at 04:42:17 PM EST
[ Parent ]
If you think it is US-centric you can post it on booman's :-)

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Fri Oct 3rd, 2008 at 04:44:24 PM EST
[ Parent ]
I just read the piece on dkos, and it seems to me it applies to some degree here, too, although not specifically with regard to this crisis.

Everyday the public German TV shows a couple of minutes how the stock market did, despite probably less than 5% of the population actually own stocks represented in the DAX. And of course that kind of information wouldn't be good to make investment decisions.

Given that most days are rather randomly on the stock market, and not determined by the one big news, I don't see a great newsworthyness in the stock market. In times like the current crisis, it might be newsworthy however, but you end up with one number (change of the index) and a gazillion possible explainations, why it moved now that way. For measuring the healthyness of the overall economy there are plenty of other numbers like GDP growth, unemployment etc.
On public TV, instead of stock market news, they should have a little segment, where economy is explained (e.g. how comes the money into the system, how is it prevented, that a bank simply adds a couple of zeros behind its cyber money, what are derivatives, or more controversal issues, and chage the guest experts every day).

Der Amerikaner ist die Orchidee unter den Menschen
Volker Pispers

by Martin (weiser.mensch(at)googlemail.com) on Fri Oct 3rd, 2008 at 05:36:43 PM EST
[ Parent ]
I entirely agree. Every time El Pais does a live blogging session with a stock market analyst reading meaning into noise I get angry.

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Fri Oct 3rd, 2008 at 05:53:09 PM EST
[ Parent ]
y=b1+ xb2+u

Mostly just u.........

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Fri Oct 3rd, 2008 at 06:27:45 PM EST
[ Parent ]
Everyday the public German TV shows a couple of minutes how the stock market did, despite probably less than 5% of the population actually own stocks represented in the DAX.

DW TV, N24, n-tv too. Annoys me to hell, too. But when the stars of our age are brokers, and our business people dream to be like American counterparts and our media people too, this is what you get.

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Sat Oct 4th, 2008 at 06:05:30 AM EST
[ Parent ]
Less than 5 %? More than 90 % of the Swedish public has money in shares or mutual funds.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Sat Oct 4th, 2008 at 06:44:03 PM EST
[ Parent ]
Really? And, more to the point, how many own stocks in the OMXS30 companies?

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Sat Oct 4th, 2008 at 07:41:30 PM EST
[ Parent ]
Very many, but most just have one or a handful of stocks, and maybe a total portfolio of just €2000-5000. Telia Sonera, Ericsson, Volvo Trucks, some bank. But most funds are index funds following OMXS30. Well, they're called "actively managed" and are horribly overpriced, but in reality  they are index funds.

Peak oil is not an energy crisis. It is a liquid fuel crisis.
by Starvid on Mon Oct 6th, 2008 at 06:58:36 AM EST
[ Parent ]
Can we get Gray Davis back?

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Fri Oct 3rd, 2008 at 04:21:04 PM EST
[ Parent ]
Certainly not!

Gray Davis was responsible for the electricity crisis of 2001/2002 all by himself, don't you remember?

And any recollection of the Enron trading shenanigans or the fact that the legal framework that allowed California residents (including yours truly at the time) to be fleeced by the energy traders was put in place by the previous Republican Pete Wilson administration must be a figment of your imagination...

Republican's stewardship of the economy is just peachy; now can you spare some change? They have this tiny teensy lil'l $700B package to put together...

by Bernard (bernard) on Sat Oct 4th, 2008 at 05:24:58 AM EST
[ Parent ]
<sigh>

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Sat Oct 4th, 2008 at 05:39:04 AM EST
[ Parent ]
I've found something interesting, but I'm trying to figure out if I'm interpreting data correctly.

The US BLS released new employment situation numbers today that show no net increase in unemployment.  Yet, they are also showing a 0.5% drop in the participation rate, and that over 1 million people were pulled from the labor force statistics.  If we added in that them back into the labor force as unemployed, that would bump the U-3 rate up another 0.73 % from 6.0% to 6.73%.

Am I reading this right?

Did they seriously just fudge the numbers to show an almost full point increase in unemployment as a net decrease over the last month?

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Fri Oct 3rd, 2008 at 02:07:28 PM EST
Well if they did it does show a serious lack of basic adding up skills amongst the reporting classes.

Any idiot can face a crisis - it's day to day living that wears you out.
by ceebs (ceebs (at) eurotrib (dot) com) on Fri Oct 3rd, 2008 at 02:30:04 PM EST
[ Parent ]
The track record - Paul Krugman - Op-Ed Columnist - New York Times Blog
The track record Feel the boom

This chart shows U6, the broadest measure of unemployment and underemployment from the Bureau of Labor Statistics. (No data available before 1994.) You can still argue that presidents really don't have that much influence on the economy. But remember, Bush supporters eagerly claimed that downward stretch from 2003 to 2006 -- coinciding with the worst excesses of the housing bubble -- as proof that tax cuts work. Live by the business cycle, die by the business cycle.

[Click link to see the chart.]

by Metatone (metatone [a|t] gmail (dot) com) on Fri Oct 3rd, 2008 at 02:30:34 PM EST
[ Parent ]
Barry Ritholtz has a fairly good post on it here.
by afew (afew(a in a circle)eurotrib_dot_com) on Fri Oct 3rd, 2008 at 02:58:13 PM EST
[ Parent ]
what galls me is that they've effectively cut the unemployment rate by almost a full point by "disappearing" people from the labor force.  Seriously.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg
by ManfromMiddletown (manfrommiddletown at lycos dot com) on Fri Oct 3rd, 2008 at 03:20:07 PM EST
[ Parent ]
That's how it's done. Seriously.
by afew (afew(a in a circle)eurotrib_dot_com) on Fri Oct 3rd, 2008 at 04:13:30 PM EST
[ Parent ]
Lies, damn lies, and government statistics.

I've been meaning to tell Migeru that he needs to look at what's been happening with the reconstructed M3 money supply measure.  It's been skyrocketing as a percentage of the US money supply, while the other M1 and M2 have remained static. Hmm........

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg

by ManfromMiddletown (manfrommiddletown at lycos dot com) on Fri Oct 3rd, 2008 at 04:20:07 PM EST
[ Parent ]
Where is the reconstructed M3?

A vivid image of what should exist acts as a surrogate for reality. Pursuit of the image then prevents pursuit of the reality -- John K. Galbraith
by Migeru (migeru at eurotrib dot com) on Fri Oct 3rd, 2008 at 04:21:53 PM EST
[ Parent ]
by Metatone (metatone [a|t] gmail (dot) com) on Fri Oct 3rd, 2008 at 05:27:20 PM EST
[ Parent ]
No.


And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg
by ManfromMiddletown (manfrommiddletown at lycos dot com) on Fri Oct 3rd, 2008 at 06:22:38 PM EST
[ Parent ]
This one.

And I'll give my consent to any government that does not deny a man a living wage-Billy Bragg
by ManfromMiddletown (manfrommiddletown at lycos dot com) on Fri Oct 3rd, 2008 at 06:23:51 PM EST
[ Parent ]
That's one of the issues that's got Bernanke flipping out.  It's worrying him that M2 -- M2 is the important one as it relates to GDP, employment, etc -- isn't responding to Fed policy.  He's lowered rates a ton, but we're still seeing the money supply in trouble.

Another sign pointing to a steep recession, and perhaps a depression.

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Sat Oct 4th, 2008 at 09:13:25 AM EST
[ Parent ]
From Last year

Is M3 money warning of an inflationary blow-off in the US? :: Ambrose Evans-Pritchard

Japan lived through this in the 1980s when it allowed property and stocks to mushroom out of control, mistakenly thinking the effects would be benign because retail price inflation was low. (The US did much the same in the 1920s but the collective mind in Washington and New York seems to forgotten that).

Capital Economics makes a different argument. Mr Ashworth said his group at first supported the Fed's decision, agreeing that (narrower)  M2 was good enough on its own.

"Recent evidence has made us reconsider that position. It appears that broad money and consumer prices have begun to move in tandem once again. Over the past two years M3 growth may even have been leading core inflation by a few months," he said.



Any idiot can face a crisis - it's day to day living that wears you out.
by ceebs (ceebs (at) eurotrib (dot) com) on Sat Oct 4th, 2008 at 09:56:38 AM EST
[ Parent ]
It's not that they're fudging the numbers.  That's just how that particular unemployment measure is put together.  Other ones -- U-6, for example -- will take account of it, I believe.

But, yeah, you read it right.  When people stop looking for work, they're no longer counted as unemployed, which is why unemployment usually shoots up at the beginning of a recovery (since they're reentering the labor market).

Be nice to America. Or we'll bring democracy to your country.

by Drew J Jones (pedobear@pennstatefootball.com) on Sat Oct 4th, 2008 at 09:11:01 AM EST
[ Parent ]
The bailout passed!  Now our govt. has the funds to support the military which will keep the US public in line during the coming SHITSTORM!

I love the irony.  Double dose!

They tried to assimilate me. They failed.

by THE Twank (yatta blah blah @ blah.com) on Fri Oct 3rd, 2008 at 02:20:16 PM EST
It's senile Friday over here, so I can scroll down in despair, or hope you will explain this ´unconstitutional´ humor.  (;

Our knowledge has surpassed our wisdom. -Charu Saxena.
by metavision on Fri Oct 3rd, 2008 at 02:32:47 PM EST
[ Parent ]
Not trying to be humorous this time.  

Am I the only person to smell a rat when the govt. says, "Give one of our guys a blank cheque for 1 TRILLION bucks and then GO AWAY!"?  Remember how the US was hustled into the Iraq invasion, and a few said it was an oil grab, and now we have all of these voiced regrets from our politicians, "We were lied to", blah blah.  Here we go again.

A link from Migeru not long ago.

Occupations cost money, even if it's to control US citizens.  What?!  I'm supposed to feel that the money just appropriated will be spent on "good stuff" because our USELESS Congress stepped in?  Pleeeeease!  

They tried to assimilate me. They failed.

by THE Twank (yatta blah blah @ blah.com) on Fri Oct 3rd, 2008 at 06:29:37 PM EST
[ Parent ]
A long story short: Prof. Michael Mann (of the (in)famous hockey stick paleo-"temperature" reconstruction) released a new hockeystick paper earlier this year. Antagonist Stephen McIntyre has been having field weeks to pick apart the inconsistencies in the recent publication. So far it's been amusing and vaguely interesting to read the two parties parry, but this recent post of McIntyre is really screamingly loud embarrassing for Mann - if true.

Ok. This is how I get it: The new hockeystick reconstruction of the Mann paper comes in a few versions, also to curve around some of the controversies surrounding tree ring analyses. One of McIntyre's long-standing arguments is that Mann's paleotemperature reconstructions which exclude tree ring analyses do not show a statistically significant uptick in temperature over the past 1500 years. One of the newer additions to the dataset of the new reconstruction without tree rings data were a set of varve (thin mud layers) analyses done in northern Finland. The authors of that research got this picture in their publication:

X-rays are here correlated to organic material, and organic material is seen as a proxy of higher temperatures. Inverted to temperatures, the graph reads thus:

Yet how does the Mann paper interprets the results according to McIntyre? This way:

Mann inverted the wrong way to give himself an extra hockeystick in his dataset! Mcintyre has further been hinting that these data sets could be heavily weighted by Mann, in order to get the final results.

If true, Mann has an ostrich egg on his face.

by Nomad on Fri Oct 3rd, 2008 at 05:28:21 PM EST
A classic case of Mann's inhumanity to Man....

"The future is already here -- it's just not very evenly distributed" William Gibson
by ChrisCook (cojockathotmaildotcom) on Fri Oct 3rd, 2008 at 06:03:32 PM EST
[ Parent ]
I LOVE YOUR SMILES, I LOVE YOUR FACES, EVERYONE!

That means that I just got to the Paris photoblog!!
When I catch up to the crisis, I´ll have a cow.


Our knowledge has surpassed our wisdom. -Charu Saxena.

by metavision on Fri Oct 3rd, 2008 at 05:47:56 PM EST
Tonight is cold, dark, damp, foggy and I'm drunk (damn you Galliano hot shot!) and the world economy is collapsing. I am going to make some tea and sandwiches.

Hope you've had a great Friday night! :)

   

Peak oil is not an energy crisis. It is a liquid fuel crisis.

by Starvid on Fri Oct 3rd, 2008 at 06:29:43 PM EST
Just about to go home, at the early, early hour of 1:30 AM having spent a fun evening preparing for a big canvass weekend. Folks here are cautiously optimistic about Missouri, meaning they see it as fifty fifty. This area is mostly poor, with a small number of very affluent people, one of whom gives us our offices. It's mostly white with a tiny sprinkling of blacks. Supposedly there are some Hispanics out here, but I can literally count the number I've seen on my fingers. It's one of those traditional blue collar dem places with a big contingent of 'Reagan democrats', but it is the only place outside the KC and St. Louis area which Dems have a chance of winning in Missouri. Also lots of Christian right folks, mostly already culled from our lists, but I've hit a few. Some friendly and polite, others assuring me they'll pray for me as I burn in hell. Lots of committed and frustrated liberal Dems working there asses off on the campaign. This is even more true apparently of the nearby rural areas where it seems the Dem base minority is even more pissed off and desperate for change. The life of an organizer is mostly drudge work - phone calling, canvassing, playing with data. The phone calling sucks, canvassing is pleasant with nice weather. Data varies.

More later

by MarekNYC on Sat Oct 4th, 2008 at 02:33:59 AM EST


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