Global financial system implosion begins

[Dr Jon]

I recently watched a clip of Will Hutton and Martin Wolf speaking at the LSE in 2008. Wolf made the point about the outrageous bonus culture and how the architects of the financial implosion cashed in their chips before the implosion began. Hutton said that around 100 key people should've been arrested and possibly charged with criminal negligence.

Have any of these people even been interviewed by the cops?

 

[Barking_Mad]

The film in this Guardian article might interest some

http://www.guardian.co.uk/film/2011/feb/17/inside-job-financial-crisis-bankers-verdicts

 

[hammerntongues]

that seems to suggest that oil prices led food prices up until autumn 2006, at which point food prices continued to rise instead of dropping in response to falling oil prices - this seems to correspond with the boom in biofuel production during that period

the cart then seems to have been pulling the horse for a while, although it could be that the 11/2010 food spike is due to the 4/2010 oil spike and once again oil prices are leading food prices (although now with an exaggerated effect)

I can see how you would come to that conclusion but it is not nearly as clear cut as you believe , the increase in production of Oils and Fats which are the primary raw feedstock for biofuels production far outstripped the demand from the biofuels market . Record high Soya , Rape and Palm production was needed not for biofuels but for a huge increase in " food " demand from the new giants of consumption China and India . It is not just food commodities that are rallying , look at metals , minerals etc they too have seen same percentage increases and you cant blame that on biofuels. Biofuels represents a tiny percentage of demand overall .

Lies damn lies and statistics

 

[deke t lefel]

no conclusion was intended

was there a sudden increase in food demand in China and India in 2007 that could have caused such a spike in food prices?

 

[dweller]

The film in this Guardian article might interest some

http://www.guardian.co.uk/film/2011/feb/17/inside-job-financial-crisis-bankers-verdicts

Ah but is this film just a cunning distraction?
Inside Job - The director is a Wall Street Shill

I'd like to see it and on Sunday at the Hampstead Everyman it is shown with a Q and A with one of the makers.

 

[Dr Jon]

Just spotted US economics: One big Ponzi scheme

As Noam Chomsky puts it: "The population in the United States is angry, frustrated and full of fear and irrational hatreds. And the folks not far from you on Wall Street are just doing fine. They're the ones who created the current crisis. They're the ones who were called upon to deal with it. They're coming out stronger and richer than ever. But everything's fine - as long as the population is passive."

 

[Barking_Mad]

Oil up $1 per barrel this morning

 

[Dr Jon]

Just spotted this interesting piece by Danny Schechter:

When financial institutions and services became the dominant economic sector, they, effectively, took over the political system to fortify their power. It was a done incrementally, over years, with savvy, foresight and malice.

Will banksters get away with it?

 

[Giles]

Ah but is this film just a cunning distraction?
Inside Job - The director is a Wall Street Shill

I'd like to see it and on Sunday at the Hampstead Everyman it is shown with a Q and A with one of the makers.

I downloaded and watched "Inside Job" over the weekend, and it seems pretty damning about how big financial firms got laws changed to let them do ever more complex and risky deals, ignored anyone who said it was all heading for trouble.

If this film is a distraction - what is it supposed to be distracting us all from? It squarely lays the blame for the current mess at the door of global banks, and politicians who allowed and encouraged their dody practices.

Who else does anyone else think we should be blaming?

Giles..

 

[gosub]

watched it in Edinburgh cinema on Friday night, encouragingly cinema was 3/4 full including 5 members of the Irish rugby squad.

CREDIT RATING AGENCIES. which the film touched on and the fact they are pleading first amendment (freedom of speech) to get away scot free. Institutional investors such as pension funds are and were already legally bound to only invest in AAA which is a nonsnese if there is no regulation in place on what qualifies for AAA. It was the instiutional funds that fuelled the thing. As the film pointed out none of the so called reforms have touched Credit Rating, same is true in UK as US

 

[Dillinger4]

I just came across a pretty unusual article. I don't know what to make of it:

Pentagon report reveals financial terrorists may have triggered economic crash

Two mystery investors 'were number one traders in all financial companies that collapsed or are now financially supported by the U.S. government'

Terrorists and other 'financial enemies' were likely responsible for the near collapse of the U.S. financial system in 2008, a new Pentagon report has concluded.

http://www.dailymail.co.uk/news/article-1361898/Pentagon-reveal-financial-terrorists-triggered-economic-crash.html

Probably just speculation, but intriguing.

 

[yield]

I just came across a pretty unusual article. I don't know what to make of it:
http://www.dailymail.co.uk/news/article-1361898/Pentagon-reveal-financial-terrorists-triggered-economic-crash.html
Probably just speculation, but intriguing.

The article it's based on is available online.

http://www.scribd.com/doc/49755779/Economic-Warfare-Risks-and-Responses-by-Kevin-D-Freeman

The USA has no-one to blame but itself.

 

[ferrelhadley]

The price of oil will be playing hell with the inflation figures. Interest rates will be coming under renewed pressure.

 

[ferrelhadley]

Spains rating cut again.

While PIMCO is getting out of US treasuries.

 

[Dr Jon]

Bankster's Holding a Gun to the Heads of British Tax Payers

The bankster elite are holding the tax payers of Britain hostage under the threat of financial armageddon, the fraudulent banking sector converts the tax payer funded profits into hard cash that the bankster elite pockets as bonuses.

 

[laptop]

The article it's based on is available online.

http://www.scribd.com/doc/49755779/Economic-Warfare-Risks-and-Responses-by-Kevin-D-Freeman

I started reading that paper and came across this:

Early in 2009, a congressman was harried into admitting on video that the US was financially attacked on September 11 2008, and that this almost led to a complete US economic collapse.

It was this attack by Shariah-Compliant nations, now admitted to by the Pentagon, that helped Obama get elected by a 4% margin. Obama, you may recall, was secretly put through Harvard by Prince AlWalid of Saudi Arabia (via AlWalid's covert frontman, Khalid Al Mansour.)

http://www.archive.org/details/EconomicWarfare-RisksAndResponsesByKevinD.Freeman

I'm not clear whether he wrote that, or a paranoid pirate posting his paper to archive.org

In any case, Freeman fingers the usual suspects - Chinese, jihadists, Russkies.

What originally set alarm bells ringing for me is that China has a very strong interest in not collapsing the dollar. The Chinese government owns shedloads of dollar bonds; and it is furiously resisting US pressure to increase the value of its currency; collapsing the dollar is the same as appreciating the rembini and would destroy a good part of China's exports.

 

[yield]

What originally set alarm bells ringing for me is that China has a very strong interest in not collapsing the dollar. The Chinese government owns shedloads of dollar bonds; and it is furiously resisting US pressure to increase the value of its currency; collapsing the dollar is the same as appreciating the rembini and would destroy a good part of China's exports.

“Economic Warfare: Risks and Responses” didn't make a lot of sense.

As you said China is completely dependent on the USA.

Lehman Probe Stalls; Chance of No Charges
wsj. March 12, 2011

The snags are the latest sign of trouble for the SEC and other U.S. regulators trying to punish companies and executives at the center of the financial crisis. So far, no high-profile executives have been successfully prosecuted. Last month, a federal criminal investigation of former Countrywide Financial Corp. Chief Executive Angelo Mozilo was closed without charges.

The U.S. government lost the only crisis-related case to go to trial when former Bear Stearns Cos. hedge-fund managers Ralph Cioffi and Matthew Tannin were acquitted in November 2009 of criminal charges related to the $1.6 billion collapse of their hedge funds.

"Everything's fucked up, and nobody goes to jail,"

 

[ferrelhadley]

UKs inflation hits 4.4% so interest rates rises are either coming or any authority the BOE has over the market is gone. Little suprise there. But Japan may seen further inflationary pressure as factories are unable to make as much (supply chain difficulties). Job losses to come and the UK housing sector is due a big battering next year as student numbers fall.


I seen US housing starts take another dive. There unemployment continues to bump along with the ugly numbers up and down a little bit below 10% official.

So we are all in the shit still and no one has spotted anything respembling a paddle.

 

[Dr Jon]

Signs of doom for global economy

 

[ska invita]

Portugal PM resigns as the country heads towards IMF bailout
http://www.bbc.co.uk/blogs/newsnight/paulmason/2011/03/portugal_draft.html

 

[A Dashing Blade]

Portugal PM resigns as the country heads towards IMF bailout
http://www.bbc.co.uk/blogs/newsnight/paulmason/2011/03/portugal_draft.html

More likely a european bailout, ECB has been propping up Portguese govvie bonds to the tune of around EUR20bn nominal

 

[kyser_soze]

I can hear the sound of 70m Germans slowly hand-clapping from my desk.

 

[yield]

The richest 25 hedge fund managers made a bit less money last year.

But don't cry too hard. Collectively, this privileged class of traders did quite well for itself -- raking in some $22 billion in compensation, according to AR Magazine.

Topping the charts in hedge fund pay was John Paulson, who reportedly earned $4.9 billion. Paulson's name at the top of the "rich list" isn't too surprising, given that his $36 billion Paulson & Co has emerged as one of the industry's top performing funds.

$4.9 billion in a year. That's over $500,000 an hour?

 

[ferrelhadley]

Spending on construction projects in the U.S. unexpectedly fell to the lowest level in more than 11 years in February, pulled down by sharp declines in both the housing sector and commercial real estate.

Construction spending tumbled by 1.4% to a seasonally adjusted annual rate of $760.56 billion compared to the prior month, the Commerce Department said Friday. It was the third straight decline and the lowest level since October 1999.

Economists surveyed by Dow Jones Newswires expected spending the construction industry would rise by 0.2% in February.

Commerce also reported that spending in January fell 1.8%, revised down from a previously estimated decrease of 0.7%. December spending fell 3.2%.

Couple of trillion dollars of debt racked up and still this key market is flatlining.

Link.

Like Japan in the 1990s, the US in the 2000\10s seems unable to lift such a key asset class. The backlog of repossesions weighs heavily on the market and on the banks balance sheets.

22 statistics that the middle class being wiped out.

61 percent of Americans "always or usually" live paycheck to paycheck, which was up from 49 percent in 2008 and 43 percent in 2007.

66% of the income growth between 2001 and 2007 went to the top 1% of all Americans.

36 percent of Americans say that they don't contribute anything to retirement savings.

Massive, the need to surge savings to replace losses in housing and other assets to cover for a lack of savings in retirement could be a major 'headwind' forcing a slowing in the velocity of money. For years people revelled at how the economy responded to 'confidence', all confidence ever was was a willingness to defer the day of saving and spend now.

'What did you do when the sun shone?


I danced'

As of 2007, the bottom 80 percent of American households held about 7% of the liquid financial assets.

Same old same old but the American "middle" is getting poorer, the poor are getting fucked.

 

[Giles]

UKs inflation hits 4.4% so interest rates rises are either coming or any authority the BOE has over the market is gone. Little suprise there. But Japan may seen further inflationary pressure as factories are unable to make as much (supply chain difficulties). Job losses to come and the UK housing sector is due a big battering next year as student numbers fall.


I seen US housing starts take another dive. There unemployment continues to bump along with the ugly numbers up and down a little bit below 10% official.

So we are all in the shit still and no one has spotted anything respembling a paddle.

Although officially the BOE is supposed to control inflation, I have a feeling that politically, the only way even vaguely out of the current situation where so many people owe so much on their houses, car loans and everything else, is to allow inflation within what they hope are reasonable bounds.

It's far from ideal, but without it, as soon as they put interest rates back anywhere near normal, everything blows up, loads default on their mortgages, more companies go under, more on the dole, more repossessions, repeat until......

A few years of 5% - 10% inflation, a lot of those mortgages start to look like .... car loans.

Short of a total collapse of the whole system which might well entail several wars, holocausts etc, I can't see a way out of where we are now.....

Giles..

 

[toblerone3]

What is happening in Portugal right now?

http://twitter.com/#!/ftalpha/status/55692396612161536

 

[toblerone3]

Socrates is going to make a statement.

 

[toblerone3]

Somebody is saying the PIIGS will be slaughtered, what are PIIGS?

 

[laptop]

what are PIIGS?

Portugal, Ireland, Greece and Spain = PIGS, with Italy inserted later.

Finance commentators seem to have acquired the librarians' habit of giving everything a cute acronym (a project named only so its acronym would be SOSIG...) see also BRICs (Brazil, India, China; now the final S is capitalised for S. Africa).

 

[toblerone3]

If Portugal, Ireland, Greece, Italy and Spain all go for bail outs, are there likely to be be any knock on effects on the remaining European economies?