Category: Economics

04
Nov
2008

12 Survival Tips for the Coming Global Recession

ARROYO GRANDE, Calif. (via MarketWatch) — A record 130 million voters are predicted to head to the polls Tuesday. The bad news: 65 million, roughly 50% of all voters, will be miffed, mad at, angry with, even hate the new president … no matter who wins! Half against Obama, half against McCain. Either way, half of America will be angry, for at least four years. And that 50% will get even angrier as the recession deepens, sweeping aside all the grand upbeat promises of the campaign. Think things are bad now? Just wait, they’ll get far worse before a recovery.

Washington’s in hock $11 trillion. Next, pile on all the gluttonous bailout billions and lost revenues and soon we’ll be pushing $15 trillion even $20 trillion as this global meltdown spreads. Worse yet: All that debt’s guaranteed to force new taxes and huge cutbacks, no matter what the winner promised.

Last week I predicted this dark future, a “Great Global Depression” by 2011. Fortunately, there are still optimists out there. See previous Paul B. Farrell.
For example: In a story in the latest Newsweek, “Nightmare on Pennsylvania Avenue: The Scary Challenges Facing the Next President on Day One,” Richard Haass, president of the Council on Foreign Relations and author of “Opportunity: America’s Moment to Alter History’s Course,” had this warning for the next president: “This is not the world you’ve been discussing on the campaign trail,” that was a “caricature.” But he added, the “American people are ready to be leveled with” — even ready for the pain of moving in a bold new direction.

After warning of domestic dangers in his Newsweek “Memorandum to the President Elect,” New York’s Mayor Michael Bloomberg hit a high note about the future: “This is a competition we should relish, because we continue to enjoy all sorts of advantages: the best universities, the most advanced factories and health care, the most entrepreneurial workers and the best quality of life. But like a champion who has gotten complacent and sloughed off on workouts, the federal government — paralyzed by partisan gridlock and special-interest pandering — has let America slip out of top fighting form.”

McCain? Obama? The 535 members of Congress? Plus 42,000 special-interest lobbyists? Maybe they’ll “level with” you. Don’t count it. Besides, it doesn’t matter. Campaign’s over. “They” got the power. For the next four years the only person you can control is you.
Try shifting into survival mode. What if you’re stranded on a mountain climb in a storm? Marooned on a desert island? Lost in a jungle? Shipwrecked, drifting in the Pacific? For the next four years! It’s not “you versus them.” Not “you versus nature.” Surviving is “you versus you.” Laurence Gonzales has been researching how people behave in accidents for 35 years, and he tells us in “Deep Survival: Who Lives, Who Dies, and Why.”

He discovered “an eerie uniformity in the way people survive seemingly impossible circumstances. Decades and sometimes centuries apart, separated by culture, geography, race, language, and tradition, the most successful survivors — those who practice what I call ‘deep survival’ — go through the same patterns of thought and behavior, the same transformation and spiritual discovery, in the course of keeping themselves alive. Not only that but it doesn’t seem to matter whether they are surviving being lost in the wilderness or battling cancer, whether they’re struggling through divorce or facing a business catastrophe — the strategies remain the same.”

And we are clearly facing a historic political and economic catastrophe today, so listen closely: We can adapt Gonzales’ incredible “12 Rules of Adventure” as a road map for Americans, especially investors, in the uncharted waters ahead for four years with the new president.
Yes, he calls it an adventure: “Survival should be thought of as a journey, a vision quest of the sort that Native Americans have had as a rite of passage for thousands of years. Once you’re past the precipitating event — you’re cast away at sea or told you have cancer — you have been enrolled in one of the oldest schools in history. Here are a few things I’ve learned that can help you pass the final exam.”

The 12 tips that will work if you want to avoid a deep depression, both personally and as a nation:

1. Attitude: ‘perceive and believe’

Economist Nouriel Roubini predicts “the worst is yet to come,” with stocks going over a cliff, along with currencies, next year.

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31
Oct
2008

Rollover: Essential Movie Viewing in these Unprecedented Financial and Economic Times

Rollover is the story of faded Hollywood siren Jane Fonda who inherits a multi-million dollar company after her powerful bank president husband is murdered. While trying to find her dead love’s killer, she runs his corporation with the help of charming banker Kris Kristofferson in the weeks before a worldwide currency and financial collapse.

 

It was the 1981 movie Jane Fonda "got made" after her exploration of the dangers of nuclear power in the "China Syndrome" back in 1979. She was driving to tell the story of real money – gold and how people throughout the world value gold as real money while most Americans and people in western societies don’t understand gold and have forgotten its importance and value.

 

The plot line is about wealthy Arab investors not rolling over their certificates of deposits (CDs) in American banks and buying gold in order to hedge themselves against a fall in the dollar and paper currencies … and what the loss of those foreign investments means to the financial establishment in New York and the international financial and monetary system.

 

Rollover: Financial Apocalypse

 

This movie was a "financial thriller" and there are not many of these movies made. Movies need bank financing, and banks usually won’t finance anything that makes them look bad or stupid. They show "It’s a Wonderful Life" with Jimmy Stewart on TV only once a year now because it shows "run on the bank" at the Bailey Savings and Loan – not something the financial establishment wants Americans to even think about.

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17
Oct
2008

The Failout

It’s only Thursday and the Treasury has gone to the credit markets for $194 Billion so far this week for short term paper alone. Let’s say they only borrow another $6 Billion tomorrow and end up at 200 Billion. Let’s do the math. 200 Billion times 52 weeks is ……….$10 Trillion 400 Billion Dollars. This coincidentally equals the amount of the current national debt.

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14
Oct
2008

Will Bailouts Risk Hyperinflation? (CNBC Video)

Government bailouts of the financial system will destroy the dollar, euro and sterling because of hyperinflation, Martin Hennecke, senior manager of private clients at Tyche told CNBC. But Todd Everts, president & CEO of Wall Street Global, disagreed.

“The privatization of the banks is the first step down the road to hyperinflation,” Hennecke said Monday.

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09
Oct
2008

Wall Street’s Shadow Market (Video)

Snippet from CBS’s 60 minutes special on the the problems facing Wall Street.

Worth watching as it focuses on some of the less-mentioned causes of the financial crisis, including the role of Credit-Default-Swaps, which were sold alongside the subprime mortgage securities (CDOs) as a way to minimise risk.

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22
Sep
2008

Max Keiser: “It’s not worth the paper it is printed on.”

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17
Sep
2008

$4 billion in one year – A representation of Wall Streets ‘Annus horribilis’

The New York Times have an interesting interactive diagram showing the losses that Wall St. have sustained over the last year*. As techcrunch put it:

The collapse of so many major financial institutions in the past year, and over the past few days especially, is hard to fathom in its enormity. Sometimes you need a good visual to put things in perspective.

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15
Aug
2008

I.O.U.S.A

Few are aware that America may be on the brink of a financial meltdown. I.O.U.S.A. explores the country’s shocking current fiscal condition and ways to avoid a national economic disaster.

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08
Aug
2008

The scale of bank borrowings visualised

Bank borrowings from the Federal Reserve

Anyone out there have a similar graph for the UK?

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30
Jul
2008

Only the fittest SMEs will survive the coming recession

its a cutthroat world out thereSmall to medium enterprises are the life blood of modern economies. In Ireland for example, up to 56% of the national workforce is employed in by Small to Medium Enterprises, that is to say companies that employ less the 250 employees and would include local industries and mom and pop business outfits. From the United States to Germany and beyond small to medium enterprises are responsible for a large component a countries transactions, employment, provision of goods and services and general day to day activities and are critical to the health of any economy. Given the increasingly uncertain economic climate critical questions must be asked – How can these critical and indigenous industries survive a rapid economic contraction – can they react to a swift fall off in demand for goods and services; do they have the management skills and Management Information Systems to not only recognise the problems but be able to formulate a cohesive response; how robust are their finances; how flexible are their employees? Concerns are growing that with the economic success enjoyed by many countries over the past ten years we have inadvertently created a weak and desperately soft underbelly – That is to say we have forgotten how to manage our business competently. Many small businesses have grown lazy and despondent and lack the management skills needed to properly navigate their business through difficult times.

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