Comments on: The Mother of All Bailouts

By: Australia and the Global Financial Crisis - SydneyNorg - People Powered News

Australia and the Global Financial Crisis - SydneyNorg - People Powered News — Sat, 25 Oct 2008 10:12:45 +0000

[...] on specific events as news has broken, ranging from a programming bug by Moody’s to the enormous US bailout plan and Government guarantees from Ireland to Australia. I followed this up with a piece that takes a [...]

By: Australia and the Global Financial Crisis | A Stubborn Mule's Perspective

Australia and the Global Financial Crisis | A Stubborn Mule's Perspective — Sat, 25 Oct 2008 00:46:19 +0000

[...] specific events as news has broken, ranging from a programming bug by Moody’s to the enormous US bailout plan and Government guarantees from Ireland to Australia. Here I will instead take a broader perspective [...]

By: US Treasury: Proud New Owner of America’s Banks | A Stubborn Mule's Perspective

Tue, 14 Oct 2008 01:11:31 +0000

[...] distressed assets from troubled banks rather than investing directly in them. As I discussed in an earlier post, the original draft of the bailout bill was a mere three pages. However, this ballooned to 451 [...]

By: Carlee Potter

Carlee Potter — Thu, 09 Oct 2008 09:43:28 +0000

I found your blog via a reference @servantofchaos made about your recent post on affluenza/consumerism/couch potato-ism… and then I kept reading my way down to here.
I’ve just launched an “online magazine” for businesswomen and have recently attempted to strike up conversation there (via comment) about the current financial crisis, in order to hopefully get an explanation that allows those fairly uneducated on the topic to grasp some understanding of what’s going on, and why it happened.
I started with my “stab in the dark” and have had exactly ZERO response (haha). So I’m trying to find people in the blogosphere who DO have an idea, and could maybe help out with a layman’s terms explanation?
The (so far one-way) discussion is here: http://tinyurl.com/4yae6m

By: CV

CV — Wed, 01 Oct 2008 13:01:57 +0000

Mule. I strongly suspect that the fall in price on the intrade bailout prediction was entirely due to the “Rebublicans” (to quote AJ) shorting the crap out of it. Dagnabbit. Where’s the SEC when you need them?

By: stubbornmule

stubbornmule — Wed, 01 Oct 2008 00:30:22 +0000

Interestingly, on Monday afternoon Sydney time when everyone still expected the bailout to be passed, the prices on the intrade prediction market had falled to 20c.

By: AJ

AJ — Mon, 29 Sep 2008 01:12:15 +0000

excuse that typo above (tks Mule for pointing out). By the way, here are 2 great sites for keeping abreast of Chinese developments, particularly with regard to capital flows:

http://blogs.cfr.org/setser/
http://www.piaohaoreport.sampasite.com/

By: stubbornmule

stubbornmule — Mon, 29 Sep 2008 00:37:06 +0000

@Mat: given that US banks will not lend to each other, you would wonder why Chinese banks would, so as AJ suggests there is probably something behing the story despite the denials.

What’s interesting is that for now, at least, while the banking sector in the US is broken, the world still seems happy to lend money to the US Government. If China and other countries were to start worrying about the whole box and dice and start to dump Treasuries, then you’d really see a financial meltdown!

By: AJ

AJ — Fri, 26 Sep 2008 08:05:46 +0000

I would much prefer idealogues like “free market” Rebublicans simply sit in their corner and count their chromosomes….if they can. What don’t they understand about a government bailout? They’ve been in one for 6mths already. The government has stumped up money now for Bear, the GSEs, and AIG, and these muppets are arguing about financial socialism? Here they are agreeing (with Democrats) that intervention is necessary, and they quibble about the form it takes. Breathtaking.

Dear Mat Packer, I believe the funding story was incorrect in the sense that Chinese banks denied it, but where there’s smoke there’s fire. Basically, the entire Emerging Market thingamee is not as solid as it once was. EM countries always struggle when the developed nations move into recessions (their customers buy less of their cheap goods,raw materials). So the point is, large debtors like, say, oooooh, the US, can’t continue to rely on the “uphill” flow of capital in the way they used to in funding themsleves. Not to mention there being a heck of a lot more deficits to fund now. I say heck b/c I was reprimanded at lunch by a church-going friend who labelled me blasphemous. Icing an infidel, however, is ok.

CV makes a good point that the US financial system is effectively insolvent, and now we have the banks in distress, along with a hedge fund industry that’s not quite sure of its role any longer. Look for more redemptions as these entities struggle with short selling restrictions (see earlier Mule) and a lack of the liquidity (both types) in order to conduct their business.

But I’m starting to become more worried about the local financial sytem as well, particularly regional banks and other minnows that simply can’t continue to fund at today’s prices….and which Wayne Swan’s bumbling announcement was all about today. I swear he had an RSL tan. Shouldn’t do press conference while being on the squirt.

By: CV

CV — Fri, 26 Sep 2008 04:46:21 +0000

the bail out is simply a sideshow and does very little (nothing?) to address the core problem in the US financial system which is solvency, or lack thereof. (In) solvency probably explains why Chinese banks are supposedly restricing their interbank lending to US banks but it does precious little to address their major problem, which is being massively long US dollar assets. If the Chinese Banks were to start unloading those it would further damage the already broken global financial system. But, that’s most unlikely as there are simply no buyers left now…