Category: Economics

30
Jul
2008

The ‘lalalalalalalalalala’ Effect

Hear no evilBrowsing through digg this morning I notice an article titled 9 ways you can take advantage of this “terrible” economy.It’s currently riding high in the digg popularity stakes with just shy of 1000 diggs.

It is, I think, a great example of what I choose to call The lalalalalalalalalala Effect – named after the sound one must make

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17
Jul
2008

It’s Not Your Grandfather’s Bank Run … Yet

From Wikipedia:


Bank runs first appeared as part of cycles of credit expansion and its subsequent contraction. In the 16th century onwards, English goldsmiths issuing promissory notes suffered severe failures due to bad harvests plummeting parts of the country into famine and unrest.

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24
Jun
2008

Global Derivatives Market now valued at $1.14 Quadrillion!

The Bank of International Settlements, which seems to be the only institution that tracks the derivatives market, has recently reported that global outstanding derivatives have reached 1.14 quadrillion dollars: $548 Trillion in listed credit derivatives plus $596 trillion in notional/OTC derivatives.

Yes, that is Quadrillion. One and 15 zeroes!

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08
May
2008

Keeping US petrol below $4/gallon one pump at a time

$3.99 for gas? Well thats what the pump says!

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01
May
2008

Are we heading towards an Iceberg?

titanic.jpg

Early evening on the April 14th 1912 and a passenger on the first class deck of the Titanic would be, no doubt, enjoying the opulence of their surroundings, and the wealth that the British Empire had created. More recently, the “Celtic Tiger” has created new wealth in Ireland so that one can now enjoy a similar fine dining experience as the passengers of the Titanic as the menus show. Yet, we know that the very next night it all lay at the bottom of the Atlantic and no amount of Edwardian engineering could save the ship. One of the key lessons learnt from the Titanic tragedy was that there weren’t enough lifeboats for all the passengers. Today, we are in the midst of a Global crisis and potentially face a new breakdown in the established world order. Just as the death of Queen Victoria in January 1901 at the peak of the British Empire was followed by two World Wars and the emergence of the United States as the dominant Global Hegemonic Power, many commentators such as Paul Kennedy in his bestseller The Rise and Fall of Great Powers, are claiming that Global Hegemony is in the process of shifting. It is possible if not probable that even within our lifetimes, this power will shift east to China or India and just like the situation faced by Great Britain at the turn of the Twentieth Century there is nothing the United States can do about it. This time it isn’t Edwardian engineering that is failing to save us, but financial engineering. Of course nobody knows for sure how events will play out or if we are heading for a recession or even a depression.

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29
Apr
2008

Max Keiser: Why You Shouldn’t Spend Your Stimulus Check

Stimulus Bull

It might not be morning again in America but Bush hopes to wake up the economy via his Economic Stimulus Act of 2008. The stimulant – pumping more than $152 billion (or about 1% GDP) into the economy via tax rebate cheques – will start arriving in the mailboxes of Americans over the next three weeks.

The plans proponents are optimistic. Hank Paulson, in a speech confirming that no second stimulus plan would be undertaken, believes the $152-billion stimulus plan could create 500,000 jobs this year. Americans would have to spend their money wisely for the plan to have maximum impact. But what if the rebate money is already owed?

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25
Apr
2008

U.S. housing collapse spreads overseas

U.S. housing collapse spreads overseas

“We know we’re already in negative equity,” said Emma Linnane, a 31-year-old university administrator. She bought a cozy, one-bedroom apartment in the Dublin suburbs with her fiancé, Paul Colgan, in May 2006, at the peak of the market. They paid €365,000, or $575,000 – at least $100,000 more than it would fetch today.

 

The bad news regarding the American housing market continue apace. BusinessWeek are reporting that Existing Home Sales Drop for Seventh Straight Month with the national median existing home price dropping 7.7% from a year earlier. That a bubble has burst is clear.

What is not so clear is how much of the contagion has spread worldwide.

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01
Apr
2008

The Great Depression Redux

USA 2008: The Great Depression

The London Independent leads with the headline “The Great Depression” today.

1.1 million Ohio residents alone recieve food stamps, nearly 10% of the Ohio population, and more are elegible.

…and this is no April Fools.

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02
Aug
2005

China to Use Gold in Order to Undermine US Political and Economic Dominance?

Weekly Markets
Precious Metals – UBS on Swiss Buying; Rothschild;
Strong Demand in Middle East; HSBC on Seasonality
Oil – Above $60 Again
Commodities – Strength Continues
Currencies – Berlusconi’s Antics; USD Crisis
Bonds – Yield Curve Flattens
Stocks – DOW & Gold 35 year performance in % terms
Property – UK housing slowdown affecting consumption

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