Monday Market Vacation
Markets were closed today for the holiday. I spent a ton of time getting caught up on a bunch of reading. There seems to be a new level of desperation permeating the economic media. In no particular order, here is what caught my attention today.
Japan Q4 GDP shrinks 3.3 percent
Wow. I mean, scary wow! That rate makes an annual GDP shrinkage of almost 13%! Decoupling dies another slow death. That print number is about as unsettling as anything else I have read in over a year.
Break Up Big Banks, Says Community Banker
A brilliant and long overdo idea. The whole "too big to fail" excuse should be done with by making banks limited in size and scope. Instead of "too big to fail" the bad banks will be "bite sized for easy consumption". Key point from the article is thus:
"The money is going to sit on the sidelines until [regulators] announce they’re going to do something with these [big banks]. Nobody is going to put fresh capital into the banking business when your major competitor is going to be continuously bailed out by the United States government with more and more money.”
Rusty Cloutier, the president and CEO of MidSouth Bank
GM, UAW in talks racing toward Tuesday deadline
I can say as a NASCAR fan the mood in the sport was nervous and scared during the Daytona 500 event week. Things do not look too good for the US automakers. I do not expect anything to be resolved this week, but certainly by the summer (think July) we will know if the Big 3 survive or not, and how much it will cost the taxpayer.
Kansas suspends income tax refunds, may miss payroll
Another state pulling the California screw job. How many more states are going to go for this? The FEDs can always print money to give you your tax refund, but will it be worth anything soon? These tax rebate suspensions are the very thing that could cause a real revolt.
BOOMERS – YOUR CRISIS HAS ARRIVED
Loyal reader Gawainsghost recommended this article, and it is provocative to say the least. Well worth the read. The generational descriptions are pretty good and the larger sociological implications are far reaching. I printed the article out as I want to spend more time digesting it. Reading it puts me in mind of another "Cycle" type idea, one I wrote about a while back that deals with "Simulacra and Simulation". Related material.
Bank Nationalization Gains Momentum
I saw at least 10 articles jumping on the nationalization bandwagon. This is not going to end well. A new name may take some of the sting away, and Calculated Risk is the early front runner with "Preprivatization".
Mike Morgan Clarifies What Exactly a Mortgage Bailout Means
Perfect article that captures what a mortgage bailout really means. Like I have written, the surest way to foment social acrimony is to have neighborhoods divided between the "bailout reduced mortgage" crowd and "the guys paying their full mortgage". The Mike Morgan site is excellent as a whole as well.
So that is what I did during my day off. Productive, huh?
It feels like we are coming down to "the moment" at last. I have had this feeling two other times over the past 6 months, so maybe I am off as usual. The slow realization that the banks are too far gone may be taking hold. Remember just last August when analyst's were optimistic after banks had "kitchen sink" write downs? Soon we should have a price tag presented as well. All told we should be on the hook for over 10 trillion dollars. What a country.
Have a good night.