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Another World IS Possible.

When written in Chinese, the word "crisis" is composed of two characters - one represents danger and one represents opportunity.

JFK-Remarks at the Convocation of the United Negro College Fund, Indianapolis, Indiana, April 12, 1959

Introduction

We live in interesting times. Times of crisis. Yet within that crisis lies opportunity.

In his book, Great Transformations: Economic Ideas and Institutional Change in the Twentieth Century, Mark Blyth explains to readers that times of economic crisis are in fact times of opportunity.

The Consumer catches a Silver Lining

Lost in this past week's dismal news for 401k retirement reports (can we call them 201k's now?) is a silver lining for the consumer: this recession, like every 20th century recession before it, has created enough demand destruction to break the back of inflation. Been to your local gasoline station this past week? Odd are, you are seeing prices you haven't seen in a long time. In fact, the price of Oil per barrel is now lower than it was a year ago. Here's the graph demonstrating that truth:

Friday Movie Night - What To Do Edition

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It's Friday Night! Party Time!   Time to relax, put your feet up on the couch, lay back, and watch some detailed videos on economic policy!

This week we're focusing in on various economists' interviews on what is going on and what really needs to happen. Included are Bill Moyer's George Soros interview, Roubini, Jim Rogers and Bill Issac.

Progressive Alternatives To The Current Economic System

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When I saw the alternative bailout bill from the so-called "progressive caucus" it struck me as just how intellectually bankrupt the progressive left is. Since when did suspending "fair value accounting standards to financial institutions" be anything other than Enron accounting?
All the great progressives in history rolled over in their graves the day this worthless legislation was proposed. You would never know that the progressive left was founded on Big Economic Ideas after reading this bill.

With this complete lack of direction from the political leadership as an example, I have to wonder if the average progressive is similarly ignorant of all the great ideas that have come before them. So I decided to present just a few Big Ideas from a proud history. None of these ideas are strictly socialist, but all of them have been tried before and worked.

What is Behind the Curtain - Lehman CDS Auction Gives a Hint

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Wizard of Oz Behind the Curtain

 

The Final Price for Lehman Brothers CDS auction is 8.625. That's 8.625% on the dollar and is much less than what was expected, 9.75.

 

That means CDS Lehman sellers have to pony up 91.375 cents on the dollar. That's the Biggest Payout Ever and will assuredly result in further write downs and losses for these sellers.

Is this 1873 instead of 1929?

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Stumbled across an interesting article - a reprint from the Chronicle of Higher Education.

The Real Great Depression
The depression of 1929 is the wrong model for the current economic crisis

By SCOTT REYNOLDS NELSON Scott Reynolds Nelson is a professor of history at the College of William and Mary. Among his books is Steel Drivin' Man: John Henry, the Untold Story of an American legend (Oxford University Press, 2006).

From a Chronicle article, The Real Great Depression.

Not being particularly well educated in history - especially our own, we tend to forget how volatile our economy was during the 19th century - and how devastating the various recurring 'Panics' could be.

Why Have the Markets Crashed?

The major US stock market averages have lost over 20% in two weeks alone, and over 10% just in the first four days of this week. Every single day, a major bank on some continent fails. We are in the midst of a full-fledged run on the financial system (I hasten to add: NOT your neighborhood savings bank) that by all definitions except the formal one of a 10% loss in a single day, should be called a crash.

I'll confess right here. I did not believe a crash would happen. In 1929 and again in 1987, crashes occurred less than 3 months after a fresh, exuberant high had been reached. It was exactly one year ago today that the DJIA reached its all time high of 14,165. Until 2 weeks ago, the decline was a slow grinding inexorable washing out much like 2000-2002 or 1973-1974. So much pessimism was already in the system that a crash seemed almost impossible. Then, after Lehman was allowed to fail, suddenly the emergency was upon us. Kudos to Lee Adler of the Wall Street Examiner who exactly cautioned a couple of weeks ago that his technical indicators were consistent with an imminent crash. He was right.

But that does not tell us WHY the market has crashed. This diary is somewhat stream of consciousness, and I'll add on graphs if I can later on, but for now, a narrative of why.

Plan 9 From Outer Space is Plan B

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plan 9 from outer space
Now that the bail out and throwing money to Wall Street for bad debt isn't doing much, today we had a coordinated rate cut from central banks across the globe.

More money is proposed so Americans can go shopping instead of producing and AIG gets another $38 Billion.

Considering the magnitude of imminent Economic Armageddon, in last night's debate what do we get?  Spend, Spin, Platitudes and our favorite distraction, tax cuts. I often think we would be better with static and noise emanating from the idiot box than this absurd, vague drivel or deflection through attack to avoid the specifics on what will they do.

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