Tuesday, October 13, 2009

SAR #9286

Whoever tells the best story wins.

Shut Up and Deal: After more than a decade of bad-mouthing the dollar and the US debt, central bankers are beginning to make some moves to diversify into other currencies – putting over 60% of their new reserves into euros and yen. It's not a raging flood, but dams leak from the bottom.

Why War, Why There, Why Now? The Taliban are not a threat to the United States. Yes, they are a bunch of loutish brutes who don't like women much, but Afghans have been controlling their own affairs for thousands of years, and not once have they invaded Poland or France, much less the United States. Someone should muzzle McChrystal.

Variable Math: The Treasury's loan modification program has lowered the payments on about 500,000 mortgages. Or perhaps it's only 1,711. But lenders have collected their fees on all 500,000 of 'em. Go figure.

Who Needs Big Banks? Great question. Is this an essay test? You mean besides politicians and over-paid Wall Streeters? Will a one-word answer do?

Infinity and Beyond: Those who claim housing prices have finally bottomed need to explain away the huge current inventory and the millions of houses in some stage of foreclosure or simply being held off the market, the one out of three mortgages that are underwater today, plus the current 10% unemployment rate. Tell them to leave a message, I'll get back to them.

Happy Halloween? Analysts are beginning to hint that results from some banks, perhaps many banks, are going to be a lot more negative than Wall Street expects.

Safety Manual: If you have an interest in the rules of the game of life on this planet, especially the prospects for sustaining human existence, read this article by Rockström et al. identifying the boundaries that must not be transgressed.

Rogers' Rules: This is China's century, the dollar is doomed, commodities are the place to be, Mr Bernanke is incompetent, and you should look out for number one. Yada yada.

Alphabet Soup: First it was to be either a V or a U. Then it became popular to predict a W shaped recovery. Personally I favor an L shaped readjustment. Now we hear that “it's going to look like this whole string of lowercase Ws for the next five years,” as little corrections get crushed over and over. Just like the Peak Oil crowd predicted.

Succinct: The resemblance between Ben Bernanke and Chauncey Gardiner is uncanny.

Agreement: Both Fitch Ratings and Wells Fargo's analysts predict several years of significant shocks as option adjustable-rate mortgages (O-ARM) recast to a fully amortizing payment of both interest and principle. Wells see 60 to 70% of these ARMs as loss causes. And that's if everything goes well and house prices do not drop any further.

Trick or Treat: A lot of people who are looking forward to treats when the banks issue their quarterly earnings reports this month are going to feel tricked, instead. Banks may be “much more negative than investors expect.” Third quarter earnings – especially for regional banks - will be “extraordinarily negative,” as they write off non-performing assets.

As Suspected: “The wealthier one is, the more one benefits [from the state] -- and the less one pays as a share of personal wealth.” Don't you just hate it when they use data and facts?

One Big Happy Family: One reason the government doesn't need subpoenas and go through all that rigmarole when they want to tap your phone or monitor your internet use is that for legal purposes – according to the Justice Department – the nation's telecom companies are government agencies.

Porn O'Graph: So obvious it would be funny, except it's not.


Anonymous said...

Safety Manual: As the summary says: "Crossing certain biophysical thresholds could have disastrous consequences for humanity"

What Humanity ignores is that the threat from unrestrained and unbridled (er, unregulated, anyone?) Bioresearch and Nanotechnology or combination thereof has the capacity to destroy Us and the Biosphere. Does this sound distressingly like the still uncontrolled Derivatives which may destroy Finance? Part of the hubris of Humanity is an unending faith in Technology and a failure to recognize its potentially game-ending dangers.

Congrats to you for presenting material that questions the basis of our Modern Existence. Be prepared to be attacked as a Luddite and someone who is anti-Science.

CKMichaelson said...

Anony 156 - Nanotechnology is the one that scares the bejesus out of me and the combination is easily envisioned as a prelude to the apocalypse.

kwark said...

RE: Safety Manual "...Identifying and quantifying planetary boundaries that must not be transgressed could help prevent human activities from causing unacceptable environmental change."

And this approach is going to be more compelling to Joe Public than the dire warnings we currently hear? I doubt it. My highly scientific survey of Joe Public (my neighbors) suggests that interest will only be piqued when there is an unavoidably clear connection between climate change and their wallet. When JP's wallet is pinched, a majority of politicians may then "discover" the issue for the first time . . . At which point there may not be much opportunity to "fix" things.

CKMichaelson said...

kwark - When you're right, you're right. This approach is less appetizing than the simple "We're doomed" path. And JP will not care enough to actually do something until it affects his wallet, his family, or his dog. And in that there's no money in doing the right thing, politicians will at best ignore this set of problems. And if we're not doomed, I'll be pleasantly surprised. Dead and gone, but surprised.