There’s a great article over at Wired.com by Felix Salmon called “Recipe for Disaster: The Formula That Killed Wall Street”. In it, Salmon traces the history of David X. Li and his Gaussian copula function (see above) that led investment firms worldwide to pour trillions of dollars into complex — and, as it turned out, […]
Now that they are beginning to see that the original bailouts and TARP is not working, your government is preparing yet another exotic scheme to try and rescue the financial industry. From the Financial Times: US set for ‘big bang’ financial clean-up Barack Obama is gearing up for a “big bang” announcement next week that […]
China has undergone unprecedented growth over the last 15 years, as the communist government worked hard to convince the west to ship entire production industries to their country to be performed cheaply (if at somewhat reduced quality) in exchange for the means to higher profit margins. As a result a vast amount of rural chinese […]
We are one month into 2009, and it is shaping up as one of the more dynamic years in my lifetime for geo-politics. As long as the economies around the world were expanding, everyone could be or pretend to be fat, dumb and happy. How that the global flood of easy money has evaporated, many […]
If you have been reading this blog and some other greats, you are probably aware that although the press would like you to think “the worst is behind us”, we are only looking at the end of the first phase of the collapse. 2008 saw the beginning of the massive deflationary cycle that kicked off […]
For those of you who missed it, in this downward spiral we are now enduring, the amount of leverage (read, debt) is directly related to how fast your bank is going to go under. Now from a blog named Infectious Greed, comes this chart extracted from a Bank of Canada report: So according to the […]
“Because Secretary Paulson had struggled in previous attempts to explain what the big banks and brokerage houses had done to the U.S. economy, his staff prepared a visual aid that told the story in clear and graphic terms.” Winner of Dave Barry’s caption contest for the above photo. ..bruce w..
Alan Kohler at the Business Spectator down in Australia does his best to explain CDOs, CDSs, and SPVs, then gets down to brass tacks: It is now getting very interesting. The three Icelandic banks have defaulted, as has Countrywide, Lehman and Bear Stearns. AIG has been taken over by the US Government, which is counted […]
Here’s a graph of US housing prices since 1975, both the stated prices and the same prices adjusted for inflation: As you can see, once you adjust for inflation, housing prices have peaked and then fallen three times in the last 30 years. I remember looking at a $35,000 house in the semi-rural area near […]
Hell, this makes more sense than a lot of what Congress and the US Treasury are doing right now: True fact: I own a Pets.com sock puppet. I keep it in my office to remind me of the idiocies of the late 90s Tech Bubble. Problem is, I’m not the one who needs reminding. Hat […]
