Didn't I say earlier- watch carry trades unwind? This affects all currencies. The market has to crash it is survival of the fittest time. The multinationals have already decided on the US Election. They say that the new president will be as transforamtional in histroric terms as Washington, Lincoln or FDR. A new economical system will emerge.
Meanwhile, Bush takes a pot-shot at Syria!

This is old already but worth listening to:
The freezing of commercial paper:
http://www.thisamericanlife.org/Radi...px?episode=365
Staring into the abyss-Adult halloween!

Good point
The Yen is rising to engulf these carry trades _ another $ trillion or more waiting to happen
& locally to engulf those people in Germany & France who bought properties in euros with CHF mortgages.

Marton

Another 5 minutes of fame; VW shares hit €1,005 yesterday & got very close to being the world's largest company measured on stock value.
Little chance of the markets recovering while the hedge funds sell the family silver at any price to cover their shorts.
BTW, serves them right.
Once they lose the taste for short selling (vain hope ) things might start reverting to normal.

Marton

I am afraid everybody is talking about the failure of banks. What has in fact failed is th "market". Perhaps it would be more appropriate to say that it was the failure of all those who did not believe in market failure. Mr. Greespan is one of them, and he admits that now, but as the "market" became a "religion" for some,they do not want to believe their eyes. Now the "chicken ha come to the roast".
One hopes that the lesson is learned.

Good grief.

Why "Market Failure" Fails
Market Failure? Try Yet Another Government Failure
The Myth of Market Failures
There Are No Flights To Jupiter: Market Failure?

Sure it is, until the next time...

Another article/interview on Swiss info

And another — about Marc Faber, who accurately predicted the stock market crash of 1987 and the Asia crisis.

Please ignore previous post- I kept trying to post a cartoon of Alan Greenspan entitled Mea Culpa. He is drawn as Nero saying 'My bad" as he sits sits elevated between columns, while beneath him Wall Street crumbles. So you will have to try picturing it!

Hoppy, it's about time you learned how to use the Edit button. With it, you can edit your own post, or even delete them. Just click on the Edit button!

I did, I have to use that thing constantly. It is better if I just copy stuff I have done previously on word. I honestly don't know what happened that wasn't even the post that I was commenting on.
But you are right I will go and check on how to do stuff- anyway what are you doing up so late!
Anyway while I am here it seems as if Obama is trying to implement Nouriel Roubini's theories. NR has said that another injection of cash from the government into the economy is necessary, if we are to avoid the depression being massively deep. Bush doesn't mind injecting capital, but prefers injecting into private companies. NR has said that it must be injected in unemployment benefit etc. I am trying to figure out what that will do, maybe he is following the New Deal /FDR type policies? If anyone knows please explain to me .
Ah, now I know what I am doing, my cuff is dragging on the arrows as I type. So I keep spinning all over the page as I type!

Okay here I go -hope I get posting the links right!
Here is Nouriel Roubini on Bloomberg with Al Hunt and Arthur Levitt.

http://www.bloomberg.com/avp/avp.htm?clipSRC=mms://media2.bloomberg.com/cache/vq44wyEF3URM.asf

Start 4 minutes 30 secs in after introductions, or better still go to 59.20 especially from 1:16.
Basically he says that the US government has to inject 400-500 Billion and invest in infrastructure.

Or in short read this from October 10th- 8 ways to stop the credit crisis:

http://www.usnews.com/blogs/capital-commerce/2008/10/10/nouriel-roubini-8-ways-to-stop-the-credit-crisis.html?s_cid=rss:capital-commerce:nouriel-roubini-8-ways-to-stop-the-credit-crisis

So that’s it the future is Nouriel Roubini as the macroeconomist.

The microeconomy will follow the ideological inclusive capitalism mix of of Mohammed Yunus and Michael Milkin.

This will be the ‘New Deal’ I am trying to figure out how the macroeconomy and microeconomy will intertwine.

These are just my musings- any experts out there that would care to comment?

No, it was the banks. Basel 2 did not help as it allowed the capital to be reduced in return for better risk management. Clearly capital was reduced but risk management did not cover the difference (& more).
I would guess that most banks did not factor into their risks that the foreclosure rules in the USA are different from Europe. In the USA you hand back your keys & walk away; in Europe you take responsibility for the debt with you.
Now we have the hedge funds complaining that they did not factor into their risks that the rules in Germany are different; which is why they short sold 13% of VW when there was only 5% on the table.

As I understood Greenspan (maybe not, he is the master of complex speak) he basically said that he believed the big banks could be trusted to self regulate because they had the same goals (to continue in profitable business) as Government.

Marton

I do not see the bad bank generating much that is taxable from these toxic assets? More likely losses that they have nowhere to offset.

I cannot imagine why the bad bank directors would want to incorporate in Caymans & be paid in this tax haven?

Marton

New article on voxeu.org re. the costs of solving the crisis:

"A new IMF database, which covers the universe of systemic banking crises from 1970 to 2007, shows that the average fiscal cost was about 15% of GDP, or three times the US’s $700 billion. This column points out that quick action often lowers the ultimate cost. Moreover wishful thinking teamed with regulatory forbearance and bank liquidity plans often raises the cost by delaying vital, but politically painful, government action."

http://www.voxeu.org/index.php?q=node/2505

Ciao,

Paul

Why?...Of Course they Did!!


Paul

KoF stiil reports an even gloomier downward trend for Swiss GDP than previously:

http://www.ibtimes.com/articles/20081031/swiss-kof-economic-barometer-continues-its-downtrend-in-october.htm

Swiss people are savers and they save with Swiss banks. I think that Switzerland has far less to worry about than other countries with respect to its banks only (only UBS got badly hit, Credit Suisse slightly). However what has not been factored in, is the massive immigrant population, who generally don’t have Swiss habits and are more inclined to take risks. For instance, I wonder how many people on this blog have houses in the UK or elsewhere that are rented out.
The rental market in the UK is good at present , but wait till unemployment hits and renters become squattors. Then there are the ‘Swiss speculators’ who like to dabble in Far Eastern markets, and the large percentage of Swiss Abroad who will need to draw on their swiss reserves.
Therefore, I do not agree with Dr. Doom, Marc Faber’s opinion, that the bottom is near for Switzerland.
In contradiction to saying the bottom is near he ends by stating:

Swiss Info October 28 predicts:
M.F.: The export industry will be extremely hard hit. People in Switzerland will have to accustom themselves to bankruptcies, particularly in the machine industry.

http://www.swissinfo.org/eng/news/business/Dr_Doom_sees_gloom_for_global_bourses.html?siteSec t=164&sid=9900162&cKey=1225278372000&ty=st

Switzerland’s economy is safer but not immune.

Today " Switzerland's largest bank, UBS, has reported record outflows in the third quarter as clients seek security in other financial institutions."

Marton