Zombie Banks, Zombie Economy, Zombie Politicians

Do you recognize anyone here? Say John Thain or Hank Paulson? I definitely see Tim Geithner there to the right. I keep hearing about the Zombie banks and Ben Bernanke at the Fed really hates the term. But the term is absolutely precious. A zombie is a reanimated human corpse. What better way to describe

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Stimulus Medicine

Readers of this site know I rack my brain trying to understand and explain how we got into this financial mess and what if anything we can do about it and after listening to Bernanke’s testimony and Obama’s address, I have finally found the solution and it is to the left and will have to

Inflation or Deflation?

Another Leg Down

The news is not good if you’re the portfolio manager for Fidelity Investments. It seems that in the last quarter Fidelity convinced that financial stocks had hit bottom, loaded up on bank stocks and today they own over 3% of Citigroup. In mid 2007 Citi was a $55 stock. Today it is a $2.50 stock.

Heimskreppa!

Kreppa is what they are calling it in Iceland, also known locally as Kreppaland. Kreppa is a common word uttered by Icelanders and roughly translated it means “Crisis” and is derived from an old Norse word. Icelanders have been living in a state of kreppa for these past months well chronicled from various blogs out

Some NewTrouble Spots

I normally start my morning reading newspapers and online magazines in Europe before the US markets open. The graph to the left shows in percentage to GDP of loans that the Austrian banking knuckleheads made to the developing countries of Eastern Europe. Note that this is as of September 2007. There are no dollar figures

The Bushobama Depression

Well it’s official. It’s a Depression. Two days ago at a regional conference in Kuala Lumpur, IMF Managing Director Dominique Stauss–Kahn said that the big world economies are already in a depression. Of course this is coming from a guy with a hyphenated name like a Singing Nun who is also known in France as

Thoughts on Default

This is a hundred billion mark note from Germany circa 1923. With this bill you could buy 2 beers during the episode of German hyperinflation which ended in November 1923 when the government finally capitulated and issued the new and improved Rentenmark. You could exchange 10 of these bills to obtain one Rentenmark or 1

Economists and the Corporate State

The ongoing debate about the stimulus package illustrates to this writer the utter futility of politicians invoking economists to support their arguments . Economists pack the upper echelons of government, academia and wall street and their assumptions drive policy like no other discipline. Economics has evolved over the years with one school of thought such

How low can you go

I stumbled upon this graph the other day which really stunned me. I have an investment friend, F, and the other day he idly wondered where the bottom in the markets might be. This graph represents the inflation adjusted DJ Industrial average from 1949 to the present. That big dip in the middle is 1982.