financial sector

Word Du Jour - Nationalize

What is Nationalization? It means to put under government ownership and/or control a private sector institution.

Like a grassroots tsunami wave, the blogs are now a buzz with the concept of nationalization of the banks. But we pointed out, months ago, by nationalization, Sweden had the best result and least pain during their financial crisis.

Tony has made a list of some of the nationalize now blog posts sprouting up like mushroom clouds in a nuclear implosion.

The Great Crash of 1929 vs. The Panic of 2008

There is no doubt that the weeks we are living through now will be remembered and studied in the decades to come. In this post I compare and contrast our crisis with the great crisis of 1929 and thereafter.

After it initially appeared that financial hemorrhaging had been staunched, in rapid succession long-standing titans of American finance -- Fannie Mae, Freddie Mac, Lehman Brothers, Merrill Lynch, AIG, and more likely than not Washington Mutual and Wachovia Bank -- all have failed in one way or another.

Neutron Bomb over Wall Street EXPLODES!

Back in early July, I wrote a diary called Neutron Bomb over Wall Street in which I speculated that the ongoing old-fashioned "slow motion bust" was destroying Wall Street finance but leaving the Main Street economy largely intact. Shortly afterward, a few mainstream economists such as Prof. Brad de Long of Berkeley picked up on the same point.

After the bloodbath on Monday, a bloodbath that seems to be spreading almost by the hour to other banks and financial houses, it is worthwhile to revisit that idea: just how much of the financial system disaster is spreading into mainstream Main Street America?

The Two Economies

Waiting for the Wall Street implosion that didn't materialize, I watched the financial news. What emerged was a discussion of the two economies.

Bloomberg: Ben S. Bernanke's interest-rate cuts have touched off a vicious circle of doom for the dollar

Guess what? Now there are two economies, one for the investors, super elites and the real one for the rest of us. We should not pay attention to the paper economy according to financial advisers, it's just the place where the super elites create investment vehicles, derivatives, hedge funds, bonds...and all of that stuff which is simply the trading of paper. Nope, the real economy is just fine. The trouble is this paper economy.