Tuesday, April 1, 2008

SAR #8093

What did #4000 die for?
Why did daddy lose his legs?
What did #4011 die for?
What happened to Mommy's face?
What will #4012 die for?


Merry-Go-Round: Last December UBS - "the world's leading wealth manager" - raised $18 billion in new capital from Singapore and "the Middle East," to offset $19 billion in losses. Today UBS took another $19 billion write-off. That is equal to 1/3 of their equity - again. Who would "invest" in a bank that can piss away lose that much money that quickly?

Economic Islam: Letting females drive, a Saudi banker says, would let the family do away with their chauffeurs, thus increasing their disposable income. Also, the new drivers would stimulate the economy by increasing car sales. Insurance costs, however, may rise.

Nationalization: Officers from the Fed are studying how the Scandinavian central banks nationalized their banks during their fiscal crisis in 1991-93. Fed Vice-Chair Kohn is reportedly "very concerned by the depth of the crisis" and is readying nazionalization as a contingency. Arbeit macht frei.

Tooth Fairy: The Norwegian Tooth Bank is seeking "milk teeth" from 100,000 children. Milk teeth contain information about environmental influences and nutrition in the fetus and early childhood and can be used for longitudinal studies. And I sold mine for a quarter each.

Progression: After a 7% decline in sales in February, Ford reported a 14.3% decline in March. Anybody want guess on April? Will it be a simple progression to 21%, or a geometric leap to 28% ?

Maginot Line: In a familiar pattern of institutional incompetency, our wars in Iraq and Afghanistan are wasting a trillions of dollars and ruining hundreds of thousands of lives to prolong the Age of Oil, which is terminal and has moved to a hospice.

Was There Any Doubt? Treasury Secretary Paulson, in a letter to the Fed, has confirmed that the $30 billion bailout of Bear Stearns, in its entirety, will be paid by the taxpayers. It's only $100 a head, quit sniveling.

Sweet Talker: Sen. John McCain: "I have always been committed to the principle that it is not the duty of government to bail out and reward those who act irresponsibly, whether they are big banks or small borrowers." Or as Arnaud-Amaury said, "Kill them all, surely God will know his own."

Hell's Bells: Bush 43: The Little Administration That Couldn't. 9/11, binLaden, Iraq, Afghanistan, Katrina. These guys are going to solve the greatest economic collapse since the Great Depression? Pull the other one.

Square Circle: Imports cost the US 14% of its GDP. US manufacturing is but 12% of GDP. If the US exported everything it made, it would still run a trade deficit. So much for increased exports rescuing the economy.

How High Is Up ? Oil has backed down from its all-time highs. But development and production costs for multi-nationals like Shell and Exxon increased fourfold in just three years, while their output did not increase. If the price of gasoline falls much further I'm going to fill up the tank.

Blueprint: Societies become complex to optimize the use of resources. But optimal systems have low redundancy. Once a complex society develops, it becomes ever more complex. It is difficult to unwind complexity gradually. Collapse to a much simpler state occurs suddenly. Wait and see.