Why Wall Street isn't in jail
Feb. 21st, 2011 12:55 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
solarbirdA brief introductory note: I used to post a lot more about economics than I do now. This is one of those posts. It lacks the depth of organisation I'd historically give them, but there are some things going on I thought people might want to know about.
Good morning, everyone. If you've missed Matt Taibbi's latest work in Rolling Stone, entitled "Why Isn't Wall Street in Jail?" I recommend skipping over and reading it. Fundamentally, despite hundreds of billions in fraud leading directly to trillions of wealth destruction, there are going to be no actual prosecutions, and it's purely and simply a matter of cronyism and corruption. Enjoy!
Garth Turner describes Vancouver's condo market as acting in ways I find awfully, awfully, awfully familiar. If you liked the US market in late 2006-early 2007? You'll love this market. My reaction? Run like hell. Some markets are already in collapse, you're very much into building-on-fire-last-one-out-dies territory.
Kyle Bass talks to CNBC about the zero-interest-rate trap, and what it means for the ability of the Fed to raise rates pretty much, well, ever. (Note: each percent raises the annual deficit by well over another hundred billion dollars.) This starts to matter when the effects of a de facto dollar devaluation start creeping over into prices, which they have. (The Eurozone is in an acknowledged debt crisis and the USD is the new carry currency and even with that the dollar index has given back all of last summer's rebound, and more. Energy is up 7.3% in the last 12 months, gasoline up 13.4% - notice that big price spike in gasoline lately? This is one of the two times of the year when prices normally drop, and it's the bigger one of two.)
Inquiring minds, to steal a phrase, may also want to look over Karl Denninger's analysis on margin collapse and the disturbing rise in crude goods costs over the last four months in particular.
And I've lost the link, but a nearly-unreported footnote in the Wikileaks reports over the last month or so indicate specifically that the Saudis are vastly overstating their reserves numbers, and that American interests on the ground on the Arabian peninsula believe there is no way whatsoever that Saudi Aramco can significantly exceed its pre-crash production limits. Fundamentally, they're saying that the general forward-looking presentation in Matt Simmons's Twilight in the Desert is substantially correct - not in the specifics, but in the general sense.
Which is not to say that they're geologists, and they seem to have a good bit less respect than I think are due the Aramco engineers, which hampers my impression of their notes. But I didn't want to let it slip by entirely unnoticed.
Oh, you might enjoy this note: WFAA Dallas is reporting that Bank of America, JP Morgan Chase, and Citigroup are threatening to limit debit transactions to $100 if new regulations limiting transaction fees aren't waived. The fact that all of these institutions have received hundreds of billions in bailout funds should not be ignored; they don't care and will fuck you if they can. See the first link above, to Matt Taibbi's article.
And contrast to Iceland once again telling the IMF to go fuck itself.
Also in Europe, Portugal is expected to need some sort of bailout by April, but is declining to ask. Japan is looking at a massive consumption tax hike to shore up finances.
And that's the first one of these for a while. Things may be getting interesting again, after a long several months of quiet. Be careful out there.
Good morning, everyone. If you've missed Matt Taibbi's latest work in Rolling Stone, entitled "Why Isn't Wall Street in Jail?" I recommend skipping over and reading it. Fundamentally, despite hundreds of billions in fraud leading directly to trillions of wealth destruction, there are going to be no actual prosecutions, and it's purely and simply a matter of cronyism and corruption. Enjoy!
Garth Turner describes Vancouver's condo market as acting in ways I find awfully, awfully, awfully familiar. If you liked the US market in late 2006-early 2007? You'll love this market. My reaction? Run like hell. Some markets are already in collapse, you're very much into building-on-fire-last-one-out-dies territory.
Kyle Bass talks to CNBC about the zero-interest-rate trap, and what it means for the ability of the Fed to raise rates pretty much, well, ever. (Note: each percent raises the annual deficit by well over another hundred billion dollars.) This starts to matter when the effects of a de facto dollar devaluation start creeping over into prices, which they have. (The Eurozone is in an acknowledged debt crisis and the USD is the new carry currency and even with that the dollar index has given back all of last summer's rebound, and more. Energy is up 7.3% in the last 12 months, gasoline up 13.4% - notice that big price spike in gasoline lately? This is one of the two times of the year when prices normally drop, and it's the bigger one of two.)
Inquiring minds, to steal a phrase, may also want to look over Karl Denninger's analysis on margin collapse and the disturbing rise in crude goods costs over the last four months in particular.
And I've lost the link, but a nearly-unreported footnote in the Wikileaks reports over the last month or so indicate specifically that the Saudis are vastly overstating their reserves numbers, and that American interests on the ground on the Arabian peninsula believe there is no way whatsoever that Saudi Aramco can significantly exceed its pre-crash production limits. Fundamentally, they're saying that the general forward-looking presentation in Matt Simmons's Twilight in the Desert is substantially correct - not in the specifics, but in the general sense.
Which is not to say that they're geologists, and they seem to have a good bit less respect than I think are due the Aramco engineers, which hampers my impression of their notes. But I didn't want to let it slip by entirely unnoticed.
Oh, you might enjoy this note: WFAA Dallas is reporting that Bank of America, JP Morgan Chase, and Citigroup are threatening to limit debit transactions to $100 if new regulations limiting transaction fees aren't waived. The fact that all of these institutions have received hundreds of billions in bailout funds should not be ignored; they don't care and will fuck you if they can. See the first link above, to Matt Taibbi's article.
And contrast to Iceland once again telling the IMF to go fuck itself.
Also in Europe, Portugal is expected to need some sort of bailout by April, but is declining to ask. Japan is looking at a massive consumption tax hike to shore up finances.
And that's the first one of these for a while. Things may be getting interesting again, after a long several months of quiet. Be careful out there.
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no subject
Date: 2011-02-21 12:29 pm (UTC)no subject
Date: 2011-02-24 04:51 pm (UTC)no subject
Date: 2011-02-21 02:21 pm (UTC)If I may soapbox for a moment, to the other people on here still in the States? If you still do your banking with Citi, BoA, Chase, etc., um, what? Read the links, and then consider contacting a good local credit union. The only way to win is not to play. [ ETA: Okay, the other way to win is to be part of their club and own your own Congress, but it is assumed that the vast majority of us can't do that. >:D ]
(Even here in Canada, I've moved my finances to...well, two local credit unions; I've left my retirement in Vancouver until my GICs mature, but everything else is in
a vaulta computer in Ste Catherine's.)no subject
Date: 2011-02-21 05:11 pm (UTC)no subject
Date: 2011-02-24 04:51 pm (UTC)no subject
Date: 2011-02-21 05:06 pm (UTC)no subject
Date: 2011-02-22 01:49 am (UTC)We have been using a lot more gasoline since Anna and I started playing a session in Renton. This is not sitting well with me, but it's that or not go to the session. At least it's optional, push comes to shove.
no subject
Date: 2011-02-21 05:21 pm (UTC)And I believe the reason America didn't call Wikileak's self-aggrandizing bluff is because he has documents that proves that Bank Of America is insolvent.
My friends and I have discussed this at length. We believe BofA is broke, and hiding their red ink, (with govt approval,) to avoid a "run on the bank." Just think about all those foreclosed houses and massive credit card default.
We also suspect that most of the other major American banks are also insolvent. That's one of the main reasons they're not lending.
no subject
Date: 2011-02-21 05:52 pm (UTC)no subject
Date: 2011-02-21 05:24 pm (UTC)"Here Is The News" is just one of the great songs from that disk!
I love ELO and Jeff Lynn!
no subject
Date: 2011-02-21 10:52 pm (UTC)