The Great Recession (New Charts)

[thegreekdog]

I read this weekend that the stock market of the past year or so mirrors (almost exactly) the stock market before the Great Depression. I can no longer find the link though.

[Trephining]

I don't believe the stock market is a viable barometer for much of anything. Institutional investors dominate the trading activity with automated algorithms in ways that make inferences practically nonexistent.

[thegreekdog]

I don't believe the stock market is a viable barometer for much of anything. Institutional investors dominate the trading activity with automated algorithms in ways that make inferences practically nonexistent.

I just think it's interesting.

[Pedronicus]

Bank Bail out in the making.


Most of us don't get to witness a bank bail out in its formative, embryonic stage. We aren't usually aware of them until they are fully formed.

But in Hungary we might be able to see one being created.

Hungary, as we all know, is hurting. Last week Hungarian politicians began to talk about asking the EU and IMF for what they called a "precautionary deal" of 10-20 Billion Euros for 2011-12 AND a "little leeway" on the amount of debt reduction they could achieve. Hungary is thinking of asking that the cap on its budget be lifted from the previously agreed austerity limit of 3% up to a more permissive 3.8%. Now as critics have asked, is it worth the ire of the EU, IMF and Bond market for a measly 0.8%? The other way of asking the same question,however, is how dire must their situation be that they are even entertaining the idea for 0.8%?

But they are which tells us they are expecting a sizeable hole in government finances by 2011.

At the same time, trying to find its own solution, the government has been talking to the nation's big banks about a bank tax. The government wants to tax the banks, as the bank's contribution to austerity measures. Why should the people tighten their belts but not the banks? However, the banks have declined to talk about such a tax at all. Refusing to suggest a workable figure or even to reply at all. Leaving the government to have to put a proposal to the Hungarian Parliament without any discussion, let alone help from the banks.

Now this gets more interesting when you realise the banks in question are Hungarian banks OWNED by foreign, Western European Banks. The six banks the government has been trying to negotiate with, are units of KBC, Erste Group Bank, Intesa Sanpaolo, Raiffeisen International, BayernLB and UniCredit.

Let's look at this list.

KBC is a good place to start. KBC is itself in the news today. KBC sold its derivatives busniness and some of its bond business to Daiwa, sold its reinsurance arm to QBE insurance of Australia and this follows the sale of its Private Banking business to India's Hinduja Group. All of these fire sales and the many that preceeded them, are because KBC had to be rescued by the Belgian Government.

So we know KBC was insolvent and is still in all kinds of pain and trouble. But how much? Well the figures don't look good. KBC has a market value (what its worth) of about 6.3 Billion Euros. Its loan book - what it has lent out and is owed is a gargantuan 523 billion Euros. That's a crepe load of leverage. (Sorry, sorry! Criminal, I konw, but I couldn't resist.)

And in just the last year KBC has lost 84% of its market value. 84%!

I think that clears up why KBC might not be wanting to talk to the Hungarian government about how much tax it is going to pay to help Hungary balance its budget. No sooner has KBC got some cash in the door from selling whatever it can, but Hungary tries to take some of it away.

It also tells you what might happen if Hungary were to press ahead and deliver KBC a large tax bill anyway. KBC get's tax bill. KBC can't pay. KBC needs rescuing.

Intesa San Paolo and Unicredit are Italian Banks. Unichem is worth 27 Billion has a debt book of 1.5 Trillion! Gotta love those Italians. Nearly as reckless as the Brits! San Paolo is worth 84 billion and has loans of 840 billion. Uni lost 66% of its worth last year. San Paolo 53%. They are, to use the technical term - in shit up to their noses.

BeyernLB is one of the LB that is most horribly exposed to East European debt. I don't have figures for it but I know it is in very deep trouble.

So here's the situation. Hungary knows it can't meet its austerity measures. It is so desperate it is trying to squeeze its banks for taxes. It is also trying to sweeten the pill for the banks by trying to set up some sort of Bad Bank. But the government has so little cash with which to do so, it is trying to concoct some sort of Public/Private partnership deal. I really don't think it has a chance of working. It is simply a measure of desperation.

So either Hungary insists on a bank tax which pushes insolvent Western Banks closer to their own ruin, or the government backs down in which case it probably can't meet its own debt payments, defaults, restructures and ... pushes the very same European banks who it owes money to, ... to their ruin.

Either alternative sends the West European Banks spiralling down. In both cases you will likely hear about how Hungary's finances are out of control and how Hungary needs to be bailed out. But the real people who are in need of being bailed out, to whom any bail out money would actually go, would be the Western banks.

Hungary could default or restructure. But the Western banks could not allow this to happen. It would kill them. So once again the real urgency for a bail-out comes not from the nation involved ( it would survive) but from Western Europe's banks. But their involvement is hidden beneath a veneer of talk about the debts and mis-management of a nation.

It is dishonest, dishonourable and, I were Hunagrian, I would see it as despicable.

[Phatscotty]

Note 2, the economy was WORKING when the war plans were made. I know how much we spent on the wars. But to look around, after the wars, and say "we need to spend even more now" is just plain irresponsible.

Since when has the US government ever been responsible about spending? LOL! Though I laugh at anybody who thinks the government will turn responsible anytime soon.

I laugh at people who think it's OK to give up trying. Actually, those people are the problem. We'll just get rid of them.

If nobody will buy our bonds, I will GUARANTEE you the gov't will become responsible overnight. You take away what they love most(spending), and they will suck your dick to get it back. I

[jimboston]

fracking has me worried most right now

What is "fracking"?

I know what it is according to the writers of Battlestar Gallatica, but that is where my knowledge on the subject ends.

If you want help with that kind of 'fracking' let me know.

[jimboston]

For once Player and ol' Sax may agree on something.

Gang, the environment is something of which we all need to be conscious.

The root of all environmental problems is human population growth.

Anyone who has more than 1 child is a completely selfish, self-obsessed, eco-hater. The environmental devastation that the lifetime of one additional human being on this planet will wreak is impossible to even begin to equalize by recycling, taking the bus or using energy efficient light bulbs. If you claim to want to protect the environment but have more than one child it's like having a dinner party, squatting over your guest's bowl of soup, taking a dump in it and then proclaiming, "don't worry - I'll add some extra salt!"

If you want a pet, get a cat.

Why one?

If a couple has two there is no population growth for that couple.

I think the root of all environmental problems is Capitalism anyway... so I don't even know what you are talking about.

[saxitoxin]

For once Player and ol' Sax may agree on something.

Gang, the environment is something of which we all need to be conscious.

The root of all environmental problems is human population growth.

Anyone who has more than 1 child is a completely selfish, self-obsessed, eco-hater. The environmental devastation that the lifetime of one additional human being on this planet will wreak is impossible to even begin to equalize by recycling, taking the bus or using energy efficient light bulbs. If you claim to want to protect the environment but have more than one child it's like having a dinner party, squatting over your guest's bowl of soup, taking a dump in it and then proclaiming, "don't worry - I'll add some extra salt!"

If you want a pet, get a cat.

Why one?

If a couple has two there is no population growth for that couple.

I think the root of all environmental problems is Capitalism anyway... so I don't even know what you are talking about.

The world can't sustain 6 billion people. Zero population growth is not adequate for environmental protection. If every procreating couple had only one child the global population would be reduced to 1.3 billion within 100 years.

3+ children = product of anti-environmental, bipedal rabbits
2 children = indifferent to global suffering / amoral
1 child = doing your part
0 children = Saxtastic!

[Pedronicus]

Why one?

If a couple has two there is no population growth for that couple.

we need a population DECREASE. You can expect hasdic Jews and catholics and every other fuckwit religious order to carry on having more children than the average western couple, but even then, western people consume far more than an average African or Indian.

[Bruceswar]

Note 2, the economy was WORKING when the war plans were made. I know how much we spent on the wars. But to look around, after the wars, and say "we need to spend even more now" is just plain irresponsible.

Since when has the US government ever been responsible about spending? LOL! Though I laugh at anybody who thinks the government will turn responsible anytime soon.

I laugh at people who think it's OK to give up trying. Actually, those people are the problem. We'll just get rid of them.

If nobody will buy our bonds, I will GUARANTEE you the gov't will become responsible overnight. You take away what they love most(spending), and they will suck your dick to get it back. I

Nobody ever said we can stop trying, but we all know Washington is clueless about money right now.

[Pedronicus]

WATCH THIS
WATCH THIS
WATCH THIS

http://www.youtube.com/watch?v=qOP2V_np2c0&feature=player_embedded

[Phatscotty]

Note 2, the economy was WORKING when the war plans were made. I know how much we spent on the wars. But to look around, after the wars, and say "we need to spend even more now" is just plain irresponsible.

Since when has the US government ever been responsible about spending? LOL! Though I laugh at anybody who thinks the government will turn responsible anytime soon.

I laugh at people who think it's OK to give up trying. Actually, those people are the problem. We'll just get rid of them.

If nobody will buy our bonds, I will GUARANTEE you the gov't will become responsible overnight. You take away what they love most(spending), and they will suck your dick to get it back. I

Nobody ever said we can stop trying, but we all know Washington is clueless about money right now.

Sane men, living in an insane time. Who calls who insane during that time?

[saxitoxin]

WATCH THIS
WATCH THIS
WATCH THIS

http://www.youtube.com/watch?v=qOP2V_np2c0&feature=player_embedded

That's interesting, however, Professor Harvey doesn't seem to front any solutions other than a vague, idealistic suggestion that we should "change our mode of thinking."

I appreciate self-proclaimed academics who find it fashionable to wear the label "Marxist." Scratch the surface, though, and I'm sure we'll find out his solution is "vote Labour" or some such schilling for a fundamentally unworkable social-democratic, messy, third-way late-term miscarriage.

No solution short of revolution is a real solution. Change will not come through the pedestrian silliness of ballot-box politics, nor can it be proffered from comfortable book club socialists who happily sip their designer lattes while blogging about dumbing distractions like homosexual weddings, thrown out like so much chum by The Insect. The people of Britain must take to the streets and topple the oligarchy or face their own enslavement.

[thegreekdog]

WATCH THIS
WATCH THIS
WATCH THIS

http://www.youtube.com/watch?v=qOP2V_np2c0&feature=player_embedded

I agree with everything he said. Everything.

[Titanic]

Note 2, the economy was WORKING when the war plans were made. I know how much we spent on the wars. But to look around, after the wars, and say "we need to spend even more now" is just plain irresponsible.

Since when has the US government ever been responsible about spending? LOL! Though I laugh at anybody who thinks the government will turn responsible anytime soon.

In the 1990's.

[Phatscotty]

Note 2, the economy was WORKING when the war plans were made. I know how much we spent on the wars. But to look around, after the wars, and say "we need to spend even more now" is just plain irresponsible.

Since when has the US government ever been responsible about spending? LOL! Though I laugh at anybody who thinks the government will turn responsible anytime soon.

In the 1990's.

I credit the Mid 80's for building a foundation for the 90's. I give Bill Clinton Major credit for not interfering, and even alan greenspan to a certain extent. I also blame Bill clinton for signing the repelation of Glass-Steagle, which led to over bubbling of everything in 2007-8.

The 90's was a bonafide tech-driven boom marked my major innovations. That damn private sector!

[Pedronicus]

I also blame Bill clinton for signing the repelation of Glass-Steagle, which led to over bubbling of everything in 2007-8.

and who exactly do you think had an interest in Glass-Stegal being dropped? Do you really think that Bill Clinton even knew what the f*ck Glass-Stegal was about?
NO
He was persuaded by Greenspan and his unswerving belief that he markets always find the right level. Greenspan has since admitted he was wrong. How was Clinton to know any better?

Once again the evil heart of Capitalism swayed the politicians to sign the papers that caused the mess.

[Phatscotty]

I also blame Bill clinton for signing the repelation of Glass-Steagle, which led to over bubbling of everything in 2007-8.

and who exactly do you think had an interest in Glass-Stegal being dropped? Do you really think that Bill Clinton even knew what the f*ck Glass-Stegal was about?
NO
He was persuaded by Greenspan and his unswerving belief that he markets always find the right level. Greenspan has since admitted he was wrong. How was Clinton to know any better?

Once again the evil heart of Capitalism swayed the politicians to sign the papers that caused the mess.

Chris Dodd, and Barney Frank, who are the heads of those committees, and also owned by the usual suspects...

I know Clinton probably did not know, BUT HE FUCKING SHOULD HAVE! That is exactly why he is just as much to blame.

Capitalism and communism have always worked together, and always will.

[Pedronicus]

I know Clinton probably did not know, BUT HE FUCKING SHOULD HAVE! That is exactly why he is just as much to blame.

Do me a favour. So Bill gets made President, and all of a sudden, he alone, is supposed to know about how many fish it's safe to catch to allow a sustainable Fishing industry, how many trees should be replanted to allow for wood and paper use, how many this, how many that.... He has advisor's to give him the low down on every single thing from Stealth fighters, to flu vaccines.
He's a human being for crying out loud, not some super computer.

All of the above things will have advisor's with a vested interest in each field.

I bet when Jimmy Carter was in Office, America had the best peanut crops ever.

[Phatscotty]

I know Clinton probably did not know, BUT HE FUCKING SHOULD HAVE! That is exactly why he is just as much to blame.

Do me a favour. So Bill gets made President, and all of a sudden, he alone, is supposed to know about how many fish it's safe to catch to allow a sustainable Fishing industry, how many trees should be replanted to allow for wood and paper use, how many this, how many that.... He has advisor's to give him the low down on every single thing from Stealth fighters, to flu vaccines.
He's a human being for crying out loud, not some super computer.

All of the above things will have advisor's with a vested interest in each field.

I bet when Jimmy Carter was in Office, America had the best peanut crops ever.

That is an extremely quaint analogy. I see your point, however, just the mere fact that it was passed originally during the great depression, and a basic one sentence definition as about all one should need to raise an eyebrow and say "hold on a second". Dont you see, either way, Clinton signed it. If he didn't know what he was signing, shame on him! We elected him just for shit like that!

I have a feeling he did know, and put his "campaign war chest" money in a nice, safe, fat, non-taxable place...

[King Doctor]

I credit the Mid 80's for building a foundation for the 90's.

True dat!

Indeed, you could perhaps extend your analysis even further and posit that the Mid 70's, in their respective turn, built a foundation for the 80's.

[InkL0sed]

I credit the Mid 80's for building a foundation for the 90's.

True dat!

Indeed, you could perhaps extend your analysis even further and posit that the Mid 70's, in their respective turn, built a foundation for the 80's.

Wait a second. This is incredible. I think we're on to something here.

Do you think maybe the 60's built a foundation for the 70's??!?!

[PLAYER57832]

fracking has me worried most right now

What is "fracking"?

I know what it is according to the writers of Battlestar Gallatica, but that is where my knowledge on the subject ends.

If you want help with that kind of 'fracking' let me know.

It is the process used to extract natural gas up here, and in many places. More or less "short" or "slang" for "fracturing".

Here is a newsweek article on it:
http://www.newsweek.com/id/154394

Or, from wikki:
Hydraulic fracturing (informally called "fracking" or "hydrofracking") is a process that results in the creation of fractures in rocks. This petroleum engineering method has been used over the past 60 years (though high-volume horizontal processes are much more recent) in more than one million wells by the worldwide natural gas and oil exploration and production industry to create fractures that extend from a wellbore drilled into targeted rock formations to enhance oil and natural gas recovery.

Link to full wikki article: http://en.wikipedia.org/wiki/Fracking

[jimboston]

fracking has me worried most right now

What is "fracking"?

I know what it is according to the writers of Battlestar Gallatica, but that is where my knowledge on the subject ends.

If you want help with that kind of 'fracking' let me know.

It is the process used to extract natural gas up here, and in many places. More or less "short" or "slang" for "fracturing".

Here is a newsweek article on it:
http://www.newsweek.com/id/154394

Or, from wikki:
Hydraulic fracturing (informally called "fracking" or "hydrofracking") is a process that results in the creation of fractures in rocks. This petroleum engineering method has been used over the past 60 years (though high-volume horizontal processes are much more recent) in more than one million wells by the worldwide natural gas and oil exploration and production industry to create fractures that extend from a wellbore drilled into targeted rock formations to enhance oil and natural gas recovery.

Link to full wikki article: http://en.wikipedia.org/wiki/Fracking

a second wiki definition... http://en.wikipedia.org/wiki/Frak_(expletive)

[King Doctor]

I credit the Mid 80's for building a foundation for the 90's.

True dat!

Indeed, you could perhaps extend your analysis even further and posit that the Mid 70's, in their respective turn, built a foundation for the 80's.

Wait a second. This is incredible. I think we're on to something here.

Do you think maybe the 60's built a foundation for the 70's??!?!

Mein Gott!

Which, of course, leads us back to the well-known fact that the 60's merely stood upon the shoulders of giants... or, as we know them, "the 50's".