Topic: Global Economics

[jedifunk]

so, its not some much political, but rather financial, but i didn't really know where to stick it, so its going in here.

seems like finance gets pulled into political discussion in every thread, which is great because they are definitely joined at the hip, but i wanted to have a spot just for financial talk.

i definitely won't claim to be an expert or even fully understand the markets, but i do keep up with their news and happenings.  i also like hearing/reading others opinions/ideas on the markets and finance in general, so let's make this the thread to discuss them.

[jedifunk]

i'll start with this article i read this morning about the possible double-dip recession that seems fairly ominous at the moment.

http://business.blogs.cnn.com/2011/08/18/echoes-of-gekko-amid-markets-mayhem/?hpt=hp_c2

edit:  btw, the asian markets are getting hammered again today, with the hang seng down 3% already (-600pts)

[runawayjimbo]

Good call, jedi. I've been using the Inside Job or the Have you heard threads to throw out some of these issues but I think it makes sense to have a dedicated place for these discussions (especially these days).

As far as double-dip goes, I think that's kind of a misnomer:  the NBER may have declared the recession ended in July 2009, but I think most people would say we're just plowing through the longest recession in history (43 months and counting). But the Fed will try it's best to keep the wool pulled over people's eyes when they announce another round of QE in Jackson Hole next week.

[jedifunk]

i would agree with the idea that we've never really pulled out of the recession.  its never really felt like it to me anyways.

of course i think i mostly gauge that by whether my house is worth anything or not (which apparently its still not)

[Hicks]

Shit if you ask me we've been in recession since 2001 the whole way.

A jobless recovery is no recovery at all IMO.

[jedifunk]

A jobless recovery is no recovery at all IMO.

QFT

[susep]

I too think we've never pulled out of a "recession", its been downhill since 9/11.  the only positive of the economy retracting is, as production decreases so too does the chain of energy production and consumption, a slowed economy both micro and macro = less impacts on the environment.

[runawayjimbo]

the only positive of the economy retracting is, as production decreases so too does the chain of energy production and consumption, a slowed economy both micro and macro = less impacts on the environment.

How is that a good thing? It's great there is less of an impact on the environment, but people are out of work and even those with a steady income are having a harder and harder time meeting rising food and gas prices while wages remain stagnant. Now, to the extent it helps people understand they shouldn't buy shit they don't need or can't afford and helps reverse the debt-fueled consumption binge we (both as a country and as individuals) have been on for a decade, I'm all for that.

[kellerb]

the only positive of the economy retracting is, as production decreases so too does the chain of energy production and consumption, a slowed economy both micro and macro = less impacts on the environment.

How is that a good thing? It's great there is less of an impact on the environment, but people are out of work and even those with a steady income are having a harder and harder time meeting rising food and gas prices while wages remain stagnant. Now, to the extent it helps people understand they shouldn't buy shit they don't need or can't afford and helps reverse the debt-fueled consumption binge we (both as a country and as individuals) have been on for a decade, I'm all for that.

= less impacts on the environment.

How is that a good thing? It's great there is less of an impact on the environment

uhh, the entirety of his post that you quoted is the answer to your question.  The word "ONLY" is an important word in the sentence.

[runawayjimbo]

the only positive of the economy retracting is, as production decreases so too does the chain of energy production and consumption, a slowed economy both micro and macro = less impacts on the environment.

How is that a good thing? It's great there is less of an impact on the environment, but people are out of work and even those with a steady income are having a harder and harder time meeting rising food and gas prices while wages remain stagnant. Now, to the extent it helps people understand they shouldn't buy shit they don't need or can't afford and helps reverse the debt-fueled consumption binge we (both as a country and as individuals) have been on for a decade, I'm all for that.

= less impacts on the environment.

How is that a good thing? It's great there is less of an impact on the environment

uhh, the entirety of his post that you quoted is the answer to your question.  The word "ONLY" is an important word in the sentence.

My point was there are other silver linings we can find from the prolonged recession and the impact on the environment is lower on my list of importance.

[runawayjimbo]

Hicks, this one's for you

http://online.wsj.com/article/SB10001424053111903327904576524821237618438.html?mod=googlenews_wsj

Goldman Chief, Executives Hire Outside Lawyers Amid Probes

NEW YORK—Goldman Sachs Group Inc. confirmed Monday that its chief executive, Lloyd Blankfein, and other executives hired outside lawyers to advise them after the U.S. Senate referred a report on the bank's activities to the Justice Department earlier this year.

A person familiar with the situation confirmed that Mr. Blankfein hired Reid Weingarten, a top criminal defense attorney at Steptoe & Johnson who has represented WorldCom Inc.'s former chief executive Bernard Ebbers, former Enron accounting officer Richard Causey and former Tyco International Ltd. general counsel Mark Belnick.

...

"As is common in such situations, Mr. Blankfein and other individuals who were expected to be interviewed in connection with the Justice Department's inquiry into certain matters raised in the [Senate] report hired counsel at the outset," said Goldman spokesman David Wells.

Goldman faces multiple investigations and subpeonas on federal, state and local levels, though it isn't clear precisely why Mr. Blankfein hired a lawyer who focuses his practice on white-collar criminal defense.

...

Goldman shares fell $1.11, or 4.7%, to $106.51 on Monday after a Reuters report late in regular trading hours that Mr. Blankfein had hired Mr. Weingarten. The shares continued to fall in after-hours trading.

[Hicks]

I'm not gonna hold my breath, but I hope they nail those fuckers to the wall.

[sophist]

I'm not gonna hold my breath, but I hope they nail those fuckers to the wall.

dude, just breathe through your nose. 

[runawayjimbo]

Maybe there should just be a Taibbi fanboy thread because he's one of the few reporters doing any work. Highlights below, but the whole article is a must read.

http://www.rollingstone.com/politics/blogs/taibblog/obama-goes-all-out-for-dirty-banker-deal-20110824

Obama Goes All Out For Dirty Banker Deal

A power play is underway in the foreclosure arena, according to the New York Times.

On the one side is Eric Schneiderman, the New York Attorney General, who is conducting his own investigation into the era of securitizations – the practice of chopping up assets like mortgages and converting them into saleable securities – that led up to the financial crisis of 2007-2008.

On the other side is the Obama administration, the banks, and all the other state attorneys general.

This second camp has cooked up a deal that would allow the banks to walk away with just a seriously discounted fine from a generation of fraud that led to millions of people losing their homes.

The idea behind this federally-guided “settlement” is to concentrate and centralize all the legal exposure accrued by this generation of grotesque banker corruption in one place, put one single price tag on it that everyone can live with, and then stuff the details into a titanium canister before shooting it into deep space.

This is all about protecting the banks from future enforcement actions on both the civil and criminal sides. The plan is to provide year-after-year, repeat-offending banks like Bank of America with cost certainty, so that they know exactly how much they’ll have to pay in fines (trust me, it will end up being a tiny fraction of what they made off the fraudulent practices) and will also get to know for sure that there are no more criminal investigations in the pipeline. 

...

To give you an indication of how absurdly small a number even $20 billion is relative to the sums of money the banks made unloading worthless crap subprime assets on foreigners, pension funds and other unsuspecting suckers around the world, consider this: in 2008 alone, the state pension fund of Florida, all by itself, lost more than three times that amount ($62 billion) thanks in significant part to investments in these deadly MBS.

So this deal being cooked up is the ultimate Papal indulgence. By the time that $20 billion (if it even ends up being that high) gets divvied up between all the major players, the broadest and most destructive fraud scheme in American history, one that makes the S&L crisis look like a cheap liquor store holdup, will be safely reduced to a single painful but eminently survivable one-time line item for all the major perpetrators.

But Schneiderman, who earlier this year launched an investigation into the securitization practices of Goldman, Morgan Stanley, Bank of America and other companies, is screwing up this whole arrangement. Until he lies down, the banks don’t have a deal. They need the certainty of having all 50 states and the federal government on board, or else it’s not worth paying anybody off. To quote the immortal Tony Montana, “How do I know you’re the last cop I’m gonna have to grease?” They need all the dirty cops on board, or else the whole enterprise is FUBAR.

...

Schneiderman apparently listened to those voices instead of the Mellon-Fed-BofA crowd, which infuriated the insiders who struck the actual deal. In a remarkable quote given to the Times, Kathryn Wylde, the Fed board member who ostensibly represents the public, said the following about Schneiderman:

It is of concern to the industry that instead of trying to facilitate resolving these issues, you seem to be throwing a wrench into it. Wall Street is our Main Street — love ’em or hate ’em. They are important and we have to make sure we are doing everything we can to support them unless they are doing something indefensible.

This, again, is coming not from a Bank of America attorney, but from the person on the Fed board who is supposedly representing the public!

This quote leads one to wonder just what Wylde would consider “indefensible,” given that stealing is pretty much the worst thing that a bank can do — and these banks just finished the longest and most orgiastic campaign of stealing in the history of money. Is Wylde waiting for Goldman and Citi to blow up a skyscraper? Dump dioxin into an orphanage? It’s really an incredible quote.

...

What is most amazing about Wylde’s quote is the clear implication that even a law enforcement official like Schneiderman should view it as his job to “do everything we can to support” Wall Street. That would be astonishing interpretation of what a prosecutor's duties are, were it not for the fact that 49 other Attorneys General apparently agree with her.

In Schneiderman we have at least one honest investigator who doesn’t agree, which is to his great credit. But everyone else is on Wylde’s side now. The Times story claims that HUD Secretary Shaun Donovan and various Justice Department officials have been leaning on the New York AG to cave, which tells you that reining in this last rogue cop is now an urgent priority for Barack Obama.

Why? My theory is that the Obama administration is trying to secure its 2012 campaign war chest with this settlement deal. If Barry can make this foreclosure thing go away for the banks, you can bet he’ll win the contributions battle against the Republicans next summer.

Which is good for him, I guess. But it seems to me that it might be time to wonder if is this the most disappointing president we’ve ever had.

[jedifunk]

interesting read.  and that quote is just crazy