Watch your headlines, ma famille--this is Obama's first weekend. Most of the interesting and most aggressive fiscal/monetary/macroeconomic activities happen between Friday close-of-business and Sunday evening before the Asian stock markets open.
I predict (or at least hope for) big things for this weekend.
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U.K. currency is looking shaky... England's economy could collapse within days. I can't believe how ugly this is getting...
ReplyDeleteTerrifying Scenario for the Weekend #2: Citibank goes belly up. (Officially, that is; it has been insolvent for months.)
ReplyDeleteWell, Obama's Big Announcement is that there are going to be Big Chances. I hope that means a Big Nationalization. We shall see. Lots of news coming out this week that should shake the economy...
ReplyDeleteMaybe you don't want to empty out your pantry of beans and dry rice just yet, UncleSam.
In my personal economy, Coal just got a regular gig at the mud farm and should making at least an extra $1000 per month. That goes far in Texas.
ReplyDeleteThe "bad bank" looks like it is going to be made reality. What a fucking disaster. Obama, I'm already getting disillusioned with you. Instead of nationalizing the banks and punishing the managers and bond holders, you create the very same direct-to-their coffers give-away that got rejected at the time of the original bailout because it was so STUPID and CORRUPT?
ReplyDeleteIf you have stocks (and unfortunately, bonds) now might be a good time to move into cash, family. My retirement money is still in equities; I think I need to move it to cash, too.
Roothy, you really are scaring me. I just got back my TICREFF and I lost over 10,000 last year (and that was from a fund that started off with only 40,000 and was supposed to be less risky than my Fidelity account which IS all stocks.
ReplyDeleteFortunately I am not really relying on either of those two retirement acounts. They were from the 6 years I worked at Packard Children's hospital. I will get a pension when I retire from the library and that is supposedly secure.
Congrats to Kipsy and Coal on the new job. $1000 a month would go a long way in California, too!!
ReplyDeleteRoothy, I'm wondering if you REALLY thought a total overhaul of the entire banking system was really going to happen? The fat cats are still running things...
Chip, no, I really did think so. I really did. I suppose appointing Geitner (who is among the people who got us into the is mess) should have tipped me off, but I thought Obama was going to make the "hard choices." He said so, dammit!
ReplyDeleteIf you lost only 25%, UncleSam, you're doing well. The most horrifying thing about this whole mess is that usually, when stocks are bad bonds are good, and vice versa. This time, *both* have tanked (though bonds not quite as much). For reasons I only half understand (if that), things are looking particularly ugly for bonds (meaning the possibility of massive spreading defaults). Everyone lent to each other; no one can pay. First one to sell "wins"--so things are very shaky right now.
Would you really like to be terrified? Apprpriately dubbed "The Scariest Chart Ever," this graph keeps me up at night: http://seekingalpha.com/article/115525-the-scariest-chart-ever
Oh, and among the big news being released today, the Philly Fed released its report on individual states' economies. All fifty states are in recession. ALL FIFTY. Not a single bright spot. That has never happened before. Ever. Not in the entire history of the country.
ReplyDeleteGDP for the entire nation gets released tomorrow. It's going to be over a 5% DROP since last year. In other words, not only "low" or even "no" growth, but contraction.
I know I sound like a crazy person, but I don't know what to say. I've said it before: this is the largest economic catastrophe of our lifetimes.
Your "scary chart" breaks some basic rules about comparing charts. The numbers up the side and along the bottom do not match...it's like comparing apples to oranges. And the writing is so tiny, it's hard to see what the chart is ABOUT.
ReplyDeleteTake a look again: the Y-axis in both are "billions of dollars " (that banks have borrowed from the Fed). Until November, that number had never even broken 8 billion. Thus, the group that keeps this chart and issues updates every month (the St. Louis Fed) had a max. value on the Y-axis of 10 billion. Then, in December, the amount borrowed from the Fed not only shot past the maximum value on the Y-axis, it shot past it by multiple orders of magnitude: the value is now at around 700 billion. Seven HUNDRED, where for the previous 100 years, it had never been higher than 8. Thus, they had to rescale the Y-axis so that the highest value could even be shown. Another way of looking at it--the difference between the largest amount ever before borrowed (8 million) and the smallest is now, by comparison, virtually zero.
ReplyDeleteAs for the x-axis (the bottom line, which is just a time line), it differs by only one year. You could knock the superfluous year off and both graphs would be identical--no substantive differences.
In other words, the graphs are comparing apples to Really, Really, Terrifying Apples.
Well, why didn't you just say so?
ReplyDeleteActually the writing on the graphs is so small, my 47-year-old eyes couldn't read it.
sorry--I'll try to find the originals on the St. Louis Fed site.
ReplyDelete