Monday, February 16, 2009

Monday Market Vacation

Whole day off and I did basically nothing. Not one thing. If I could just get paid to do nothing everything would be so much easier.

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.

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.


Anonymous said...


"So that is what I did during my day off. Productive, huh?"

That's what I do everyday.

"If I could just get paid to do nothing everything would be so much easier."

And that's why, not that it's easier, at least not in this environment mind you.


getyourselfconnected said...


I had wanted to ask you your opinion (if you have one) concerning silver bullion (pure .999) vs. junk silver US coins (.90 pure) in a all out financial calamity. Would one or the other be better to have?

Anonymous said...


I would think the coins as they are more easily recognized by the general public and they trust it's the real deal, but assuming silver the metal is was what was making it a store of value then as long as one could exchange bullion for what one needed to buy, it wouldn't matter. If I were buying for myself it would just depend on which one I could get the most silver from for the lowest cost per OZ. My S-I-L goes to a lot of auctions and he can figure what is a good buy based on that but you also have to look at some of it based on the numismatic value as well such as age and condition.

I prefer oz bars myself, New York mint are my favorites, but hard to find and they ain't cheap.


watchtower said...

GYSC said:
"I have had this feeling two other times over the past 6 months, so maybe I am off as usual."

It's only lunch time here but so far this morning is turning out to be a doozy i.e. lock limit down in Russia and flirting with November lows over here, it's looking like your hunch is picking up steam today GYSC.

GawainsGhost said...

God created economists to make astrologers look good.

I truly believe that.

Because I have somewhat of a medieval mind, I believe in natural cycles, as in the four seasons. Everything that ripens rots. Every winter is followed by a spring.

I also believe in types, as in personalities. Blake writes, "As Linneus numbered the stars, so Chaucer numbered the characters of men." I cannot disagree with that, as I have never met a man or woman who wasn't accurately depicted in the Canterbury Tales.

But most of my philosophy comes from Sir Gawain and the Green Knight, particularly the opening of the second fitt, which describes the changing of the seasons. As one age dies, another arises. The only reason why Gawain was able to survive, escape with merely a knick on his neck, is because he remained true to his principles. There's a lot to be said for that.

I find very little to disagree with in Quinn's article. Yeah, sure, I could quibble with him on some of the finer points, but overall I think he's exactly right.

We're entering a Crisis phase. There will be much wailing and gnashing of teeth, but in the end, when the new High comes, those that remained true to their principles will survive and prosper.

Reality is that which, after you've stopped believing in it, does not go away.