Category: Economy

This past April, newspapers were a twitter with the discovery made by two Cambridge University researchers: John Coates, a former trading floor manager on Wall Street, and Joe Herbert, a neuroscientist. In their abstract, they wrote:

We found that a trader’s morning testosterone level predicts his day’s profitability. We also found that a trader’s cortisol rises with both the variance of his trading results and the volatility of the market. Our results suggest that higher testosterone may contribute to economic return, whereas cortisol is increased by risk.

Their research findings were published in the Proceedings of the National Academy of Sciences, Endogenous steroids and financial risk taking on a London trading floor.

So, as The Guardian observed Testosterone is the secret ingredient for making (and losing) lots of money. “Money doesn’t make the world go round: it’s testosterone. The more that traders have, the richer they’ll become – up to a point.”

cross posted from The Dream Antilles

The answer is Nothing.  Nada.  Zilch.  Zippo. Zero.  They haven’t got a clue.  They are going to let it all come down, however it comes.

Permit me some extreme grouchiness.  And anger.  And despair.

People I know were evicted today from their home in the wake of not being able to pay their mortgage.  A long legal battle ended.  They lost.  The Sheriffs were there.  There was the cliche, the spectacle of having the young children sit on the curb while the furniture was deposited on the lawn. I don’t have $30,000+ to loan them to stop it.  Nor do their friends or family.  And I don’t see Congress or anybody else stepping in to do anything about this.  Maybe later on, when they’ve moved out and lost their home and are living somewhere else.  Maybe then there will be some “relief.”  For somebody else. I wish they lived in Chicago, but they don’t.

And then there’s this:



One Year of the DJIA

Original article, by Jared Wood and subtitled Is the US economy also heading for a ‘lost decade’?, via The Socialist (UK):

ECONOMISTS AND political leaders are looking to the recent economic history of Japan with growing fear. Japanese share prices are today 70% lower than at their 1989 peak, while property values are about 40% lower than they were in 1990. Economic (GDP) growth in the 1990s averaged less than 1% a year, leading economists to talk of the “lost decade”.

14,164.53, 10/9/07.

Let me take you on a quick trip back to the halcyon days of our youth, way back Friday before last.

The Dow stood at a sunny and proud 11,143.13 having gained 121.07 points that very day!

Then came the bad old politicians and they didn’t approve Wall St.’s $700 Billion Blank Check.  A number simply made up to be big enough.

Not so big now are you?

Monday the 29th of September Wall St. threw their -777.68 hissy fit.  Maria Bartiromo was particularly outraged that these mere Representatives could thwart her Saks shopping people’s will.  See, this is what you get when you don’t kiss butt!

Now that changed their Capitol Hill water carriers mind for sure.  What’s good for GM is good for the nation.  The business of America is business.

So the next day we had our dead cat bounce, +485.21, Dow at 10,850.66 a whole +263.07 for W‘s entire tenure.

Thanks for nothing.

Now hold on to your socks folks because we’re going to take one of those big shoots-

Happy Anniversary!

Interesting news today.  Progressives like Paul Krugman, George Soros, and Jerome a Paris have suggested that the economic rescue/bailout would work better if we bought equity in the banks rather than just bad debts.  They see buying bad debt as inefficient and less likely to succeed.  It looks as if Treasury Secretary Hank Paulson is seriously considering partial nationalization of financial instiutions:  

An administration official, who spoke late Tuesday on condition of anonymity because no decision has been made, said the $700 billion rescue package passed by Congress last week allows the Treasury Department to inject fresh capital into financial institutions and get ownership shares in return.

Treasury Secretary Henry Paulson told reporters that Treasury was moving quickly to implement the $700 billion rescue effort and he specifically mentioned reviewing ways to bolster the capital of banks.

msnbc.com: White House considers bank ownership stakes

More, after the fold.

 

“We will no longer be a party to something that’s so unjust,” Cook County Sheriff Tom Dart said in a news conference on Wednesday.

Chicago’s Daily Herald reports that Dart cited the “economic crisis” as the reason he has called a halt to evictions until lenders can prove the foreclosed home’s occupant has been notified.

“We have to be sure that when we are doing this – and we are destroying some people’s lives – we better be darned sure we’re talking about the right people,” Dart was quoted saying in the AP story.

Dart explained that he ordered his deputies to stop evicting people from homes in foreclosure because many of the people ordered evicted are renters who have paid their rent and have done nothing wrong. He explained that tenants with their rent fully paid, go to work in the morning and then return to discover they have been evicted. The authorities cart the possessions of renters of foreclosed homes out to the curbside and by the time they return home, everything has disappeared.

“The meager possessions they have are gone,” he said. “This is happening too often.”

Everything you need to know about tonight’s debate in a handy pre-debate essay.

See this?

That’s the Dow Jones for the past year in graphic form.

The Dow closed at 9447 today.  Last year on this day it was 14,198.  That means (gross over simplification coming) for every $141 dollars in your 401k, your pension account, your SEP, your stock portfolio a year ago, you now have $94 because you’ve lost $47 in the market.  That $47 is vapor.  It’s gone.  The only solace in this, if there is any, is that the Government didn’t get to put all of your social security money into this market so it could be vaporized as well.

The chart is a microcosm of what’s going on in the rest of the US economy. The credit markets aren’t functioning.  Consumer confidence is in the dumps.  With foreclosures going crazy, with gasoline and fuel oil prices still sky high, with unemployment way up at record levels, with housing prices way down, with the mortgage market in chaos, with the economy running a gigantic deficit, with a massive trade deficit, and with the dollar suffering, with 60% of the polled people saying the country is headed for a depression, what can the candidates possibly say to us about this mess?

Everything that doesn’t deal with the economy is wasted talk.  Even the wars are off the front pages for the moment.

That’s what this debate has to be about.

There are a couple of stories regarding the $700 billion bailout today that really should raise the eyebrows of Americans who have lived through and witnessed the Bush years. Especially taking into consideration the over-reliance on private contractors, financial mismanagement, and loose accounting practices in Iraq and elsewhere with taxpayer money that have been a hallmarks of the Bush administration.

The NY Times reports Treasury sets timetable to pick managers. “The Treasury Department put its $700 billion bailout on a fast track on Monday, asking companies to submit bids for running the system by Wednesday and announcing its plan to select winners on Friday.”

Yes, the Treasure Department will take only one day to review bids before awarding contracts. Hey, at least Treasury Secretary Henry Paulson didn’t just announce no-bid award to, say, Paulson’s old company, Goldman Sachs. See if this sounds familiar —

Administration officials plan to outsource almost the entire project, which will largely rely on “reverse auctions” in which the government accepts bids from financial institutions that want to sell their troubled assets.

The Treasury said it intended to hire one company as a “financial agent” to set up the basic system, which would include running the auctions, keeping track of the various portfolios and overseeing all the operational issues.

Given you are stuck in your current dwelling for the winter and wish to be warm when it is cold outside…what are the least expensive ways to stay warmer while conserving money? (instead of shelling it out to the heating oil, propane, and natural gas cartels).

Any suggestions please offer with estimated costs so folks can assess what they can do.

Today, Treasury Secretary Henry Paulson appointed Neel Kashkari to oversee the $700 billion bailout of the nation’s financial crisis. That’s right Kashkari is now the interim Assistant Secretary of the Treasury for Financial Stability.

Who?

Neel Kashkari, a former banker at Paulson’s old company, Goldman Sachs, who earned his M.B.A. from the Wharton School at the University of Pennsylvania in 2002.

Paulson’s move certainly inspires the confidence a panicky financial community needs right now, doesn’t it?

The “Deal Journal” blog at The Wall Street Journal has some background on Kashkari. The post notes, Paulson’s “move essentially puts a new title on what Kashkari he has been doing since he joined Treasury in 2006-examining the consequences of an economic housing fallout.”

So, after two years of watching the collapse, he’s in charge of fixing it?

Come on! Kashkari has only six years of financial experience!