Perspectives on the global economic meltdown

[Ameet]

Good news everyone, Bernanke says recession is very likely over! Just don't get laid off anytime soon

http://news.yahoo.com/s/ap/20090915/ap_ ... s_bernanke

[svinayak]

http://www.bloomberg.com/apps/news?pid= ... eU_YHAT0uQ

Diamonds Post-Lehman Have No Aura as Buffett Can’t See Recovery
By Alan Katz, Subramaniam Sharma and Peter Robison

Sept. 15 (Bloomberg) -- A wooden swing hangs from a motorcycle chain on a porch in western India where Vilas Khoyani rocks her 7-month-old son, born eight days after her husband committed suicide. How they ended up in this two-room house starts with an unsold bag of diamond jewelry in Phoenix.

Gadi Giladi was visiting stores in Arizona on Sept. 15, 2008, the day Lehman Brothers Holdings Inc. filed for bankruptcy. The salesman was sent away by jewelers who stopped buying as they watched television news of the unfolding crisis that wiped out more than four years of diamond price gains.

“They wouldn’t even let me open my bag,” said Giladi, who was carrying bracelets, earrings, pendants and rings priced from $200 to $4,000, many made with tiny diamonds of the type polished in India. “Every store, they were watching CNN, and they’d say, ‘Oh my God, what’s going to happen next?’”

What Giladi saw in Phoenix that day, diamond polisher Mahesh Khoyani wouldn’t feel for two months: an economic tsunami set off by Lehman’s collapse that drove down Christmas sales by more than 20 percent at U.S. jewelry counters, halved imports of uncut gems by traders in Antwerp, Belgium, who could no longer get credit, washed away the livelihoods of 400,000 diamond workers in India and shut mines in Botswana.

No Recovery

The industry -- which employs more than 1 million people from Jwaneng, Botswana, to Surat, India, to New York’s diamond district -- faces two more years of turmoil, and prices may not return to pre-crisis levels for at least a decade, said Richard Platt, managing director of WWW Diamond Forecasts Ltd. in Eastbourne, England.

Platt, who created pricing scenarios when he worked at Johannesburg-based De Beers Group, the world’s largest diamond supplier, said prices for rough stones, up 40 percent since March, are “unjustified by retail sales” and will probably fall over the next 12 months. Polished prices will stagnate after a 4 percent rise, he said.

That means more hardship in the jewelry business in the U.S., where sales have fallen every month this year through June and aren’t expected to recover anytime soon; in Botswana, which is bracing for a 50 percent drop in diamond revenue in 2009; and in India, where 240,000 polishers and cutters may not be able to return to work for at least 18 months after the recession ends, according to Vasant Mehta, chairman of the Gem & Jewellery Export Promotion Council in Mumbai.

“We relied on diamonds, and they betrayed us,” Vilas Khoyani said, staring into space outside her parents’ home in Sanathali, 814 kilometers (506 miles) north of Mumbai, where she lives with her two sons, Diviesh and 4-year-old Tushar.

‘Unhappy Goose’

Like housing in the U.S., diamonds spawned a bubble in which easy-to-obtain credit made buyers willing to pay higher prices and created a false sense that these polished rocks were perpetually rising stores of value, said Christopher Ellis, president of Consensus Advisory Services LLC, a Boston investment bank that advises companies on restructuring.

Prices rose 38 percent from the end of 2003 through mid- 2008, buoyed by growing U.S. household wealth, which peaked at $64.3 trillion in the third quarter of 2007. Rough stones rose 81 percent over the same period, said Platt. About half of the world’s polished diamonds are sold in the U.S., according to De Beers.

“It is possible to pull too many diamonds out of the ground and cut and polish too many of them and try to cram them down the gullets of the American customer,” Ellis said. “It’s like making foie gras. You wind up with a very unhappy goose.”

Rough Stones

The aftermath of Lehman’s crash laid bare how the credit glut pumped up valuations of the billion-year-old sparkling gems. In the six months following the bank’s collapse, as credit markets froze, prices for rough stones fell 40 percent and those for polished gems slumped 19 percent, according to data from WWW Diamond Forecasts and PolishedPrices.com, which provides pricing information.

Everyone along the supply chain had bought into the bubble, including Mahesh Khoyani, who dropped out of school after the fifth grade and was 29 when he died. He took out a loan last October, as disaster curled his way, to finance construction of a 400,000 rupee ($8,206) two-bedroom house for his growing family in his ancestral village near Rajkot, a city of 1 million in the western state of Gujarat.

[SwamyG]

But the way the elite cabal of bankers, regulators and netas has milked the system using the central bank as the main conduit, it seems they are oblivious to what may happen if the system strains to breaking point. It will be the gullitone for them, first and foremost.

But a large number of folks will get away. Only a very few will face the severe consequences.

The important thing to watch and predict would be is what is the "new normal" going to be?

[ramana]

One very bigwig desi VC said on Saturday Ombaba is balingout his friends in the banking industry (bangaru raju et al). Dont be fooled by the bailout package etc. Recovery is long way off unless there is facing the truth that the friendly crooks stole the future of the nation.

[Nandu]

Credit crunch signals end of The World for Dubai’s multi-billion dollar property deal

I am curious as to why all these stories about the economic collapse of dubai and the edifice built on near slavery and so forth are only coming out of the British press. Even the Indian press is mostly silent on it, I believe.

[Singha]

the ruling classes in India do not want to offend Sheikh Maktoum.

the leftist elements of the british press might be the ones exposing the situation. the elements allied to global financial interests have no cause to call the emperor naked.

[Akshut]

Here you go Akshut:
Credit crunch signals end of The World for Dubai’s multi-billion dollar property deal

Thankyou Ashwin.

Singhji, do Times and Guardian have a Leftist voice?

And here's a comment from the webpage:-

"But people only throw stones when a tree has fruit,” he said.

He clearly has not dealt with many British people, they will boot anybody!!

[Neshant]

the picture kind of reminds me of the fleet of japanese warship that was towed to bikini atoll after WWII where the US tested a hydrogen bomb to see its effects on surface vessels.

---------

The ghost fleet of the recession

http://www.dailymail.co.uk/home/moslive ... apore.html

[Hari Seldon]

I suspect 'em dubai expose's might also have official UQ approval. Might have to do with withdrawal from the isles of much dubai wealth following last year's crash..../CT hat off.

[Singha]

guardian seems to fairly leftist. dont know of the times.

considering how sensitive the UK is about H&D of its arab buddies, these kind of
exposes has got to have official backing or strong rogue cells within the establishment who'd like to see a change)

[vishwakarmaa]

This financial turmoil and series of frauds uncovered in western system has shown to the world that Gora's are no pure and fair, as some people used to think before.

American system(Neta+babu+corporates) is no better and no more fair than any third world country like India or China. Only difference is just that they are 'sophisticated' and they know how to 'cover-up' and butter up things using their privately controlled media.

This realization will hopefully open eyes of a few west-apers in Indian system who blindly advertise surrender to mighty gora masters.

[vishwakarmaa]

X-posting from other thread.

One who lives in West is under the influence of western media. Critically speaking, he can't understand or see, how 'corruption' and 'frauds' are institutionalized in American financial system.

The way USA printed 'dollars' and saved bankrupt American banks from being taken over by non-American competitor investors, banks is biggest example of American double-speak on fair and open systems.

Asian countries should replace the dollar with some other currency of their own. Supporting dollar is only supporting the scums in America and giving them unlimited power to print any amount of dollars they want and buy the resources around world. It has already been proved that a huge amount of bailout money went into the American companies through Stock markets.

So, essentially speaking, Americans are printing dollars and funding their MNC's empire in a naked manner under the guise of 'bailout' and financial salvation and whole world is being asked to be 'bystanders'.

There was a Oil and dollar deal Americans did with Arabs during 1970's. In this deal, the Arab world would be accepting dollar as currency for all their Oil sell to the world and in return, they were allowed to put this earnings back into American economy.

That agreement was broken when some countries(Iraq, Iran) rebelled and decided to sell oil in non-dollar currencies. This is what led to Iraq war and now coming Iran war.

Asians have become bystanders while Americans are busy breaking the Arab world one by one for their greed.

No wonder your friend thinks there is no corruption in USA. Thats true as far as 'daily' life is concerned in USA. But, same is not true with American corrupt capitalist empire and foreign policies which ensures it grows by joining hands with corrupt elites around the world. Average american doesn't care even if some country is bombed as far as they keep getting the benefits. Thats typical ignorant response you get from any desi or american you speak to.

[Hari Seldon]

Lungi-dance folks!

Kindly awaken from your deep stupor and break out the champagne and the party hats.... Shower the confetti! Let the games begin... yahoo!

OECD calls an end to the global recession

The global downturn was effectively declared over yesterday, with the Organisation for Economic Co-operation and Development (OECD) revealing that "clear signs of recovery are now visible" in all seven of the leading Western economies, as well as in each of the key "Bric" nations.

The OECD's composite leading indicators suggest that activity is now improving in all of the world's most significant 11 economies – the leading seven, consisting of the US, UK, Germany, Italy, France, Canada and Japan, and the Bric nations of Brazil, Russia, India and China – and in almost every case at a faster pace than previously.

Each of the 11 economies saw an improvement in July, the OECD said, with only France improving at a slower rate than in June. The July figures are the most encouraging since the indices began ticking downwards during the first quarter of last year.

The OECD's leading indicators are considered a key economic yardstick because they measure the sectors of countries' economies that tend to react first to upswings and downturns. As such they provide early evidence of the way in which the overall economy is progressing.

Well, I'll be glad if the recession ends and we are all able to get back to the pre 2007 normal. Somehow, am not convinced that can happen as yet. Time will tell, of course.

[Rahul M]

> ghost fleet of Johor

unusual and brilliant article. a scoop because nobody in western media seems to
have reported on it. singapore is 2nd busiest port.

I am sure there's a similar anchorage near hong kong or shenzhen somewhere. johor
bahru might be popular due to its relatively sheltered and calm waters.

probably a good time to buy out some stakes when the downturn reaches the korean shipbuilding industry. if GOI is wise it would help pvt players to do so.

[Hari Seldon]

Janta, kindly put the salt shakers down and keep the paper napkins handy instead.
Yup, real tearjerker straight ahead.
If this doesn't break your heart, nothing will. "sniffle"

aaj ka frontpage wsj story

Over the past 20 years, finance grew faster than almost any other sector of the U.S. economy, offering rich pay and luring a growing share of bright minds to trade securities, make loans, manage portfolios, engineer mergers and turn mortgages into complex derivatives. Now the finance bubble has deflated, forcing hundreds of thousands of employees to search for other work and sending new graduates looking elsewhere for careers.

Harvard's 2009 graduating class shows the shift in career directions. Those entering finance and consulting tumbled to 20% of graduates this year from nearly twice that in 2008 and 47% the year before, according to a survey by the university's newspaper, the Crimson. Fifteen percent this year planned to go into education -- up by half from last year -- and the proportion going into health care doubled to 12%.

Like nearly 30% of Massachusetts Institute of Technology graduates in recent years, Ted Fernandez set his sights on finance. Though he majored in materials science and engineering, he was wowed by tales of excitement from friends who went to Wall Street.

But when he stopped by an investment bank's booth at a job fair a year ago, it was eerily empty. The booth belonged to Lehman Brothers Holdings Inc., and the date was Sept. 18, three days after the 158-year-old bank filed for bankruptcy. Now Mr. Fernandez, 22 years old, is getting a master's in engineering at M.I.T. and aiming for a career in solar-power technology.

Solar power substituting for money power now? The sheer unfairness of it all is glaring only. Whats the world coming to?

[manish]

> ghost fleet of Johor

unusual and brilliant article. a scoop because nobody in western media seems to
have reported on it. singapore is 2nd busiest port.

I am sure there's a similar anchorage near hong kong or shenzhen somewhere. johor
bahru might be popular due to its relatively sheltered and calm waters.

probably a good time to buy out some stakes when the downturn reaches the korean shipbuilding industry. if GOI is wise it would help pvt players to do so.

Rahul M saar, they are stronger than they seem, at least the biggies like HHI, Samsung, Daewoo and STX Heavy. Some of the smaller ones may be weak, but these crown jewels of theirs are pretty strong IMHO.

These guys weren't giving in when customers with huge orders tried to renegotiate/cancel deals struck at the peak. And this was back in June when the situation was looking really bleak. At one point in time (April-May IIRC), HHI had reportedly gone on without a single newbuilding order since November 2008 or so. Shows that either they are pretty resilient, or that the Korean Govt is playing sugar daddy. Looking at all the assistance that was flowing their way, probably a combination of both. Plus, the order books were filled till 2012 or so at the beginning of 2008, which is a nice cushion to have, even with a flurry of cancellations, deferrals and defaults.

They are actually seeing signs of recovery now, and some new orders have started trickling in. Commodity prices are rising again, and with my limited knowledge and understanding, I would guess that they are more confident today than at any point in time in the last year or so.

Just my 2 cents.

Edit: Singha, the 'ghost' fleet did not really go unnoticed. There had been articles about that in March-April itself, and that was repeatedly mentioned in several articles. Unfortunately I do not have them handy, will look around for them if possible. IIRC, the number quoted was around 450 in March-April 2009. So nothing much has changed, save for the alarmist tone of DailyMail.

Majority of those parked there are apparently containerships- reason - the South East Asia's manufacturing machine slowed down with the recession and there was little to be exported to US/EU.

[manish]

^^ Singha saar, here's an article from May. NYT is as mainstream as it gets...
Cargo Ships Treading Water Off Singapore, Waiting for Work

[Singha]

getting into some kind of alternative energy play like solar power, stirling engine, wind turbines seem to be the hot new fad among grad school students now ?

I kind of doubt it can substitute the IT industry in number of jobs and revenue though. IT is everywhere from our pockets to the cloud datacenter.

[Raja Bose]

getting into some kind of alternative energy play like solar power, stirling engine, wind turbines seem to be the hot new fad among grad school students now ?

Well,....these look like new fertile opportunities to defraud people with promises of turning lead into gold while piously claiming to "work for the environment". It is amazing how much of the current crisis is due to students from the best of top schools in massa - education can never displace greed.

[vera_k]

But, the solar and alternative energy focus is good news. Anything that serves to reduce the money and leverage of the Gulf will also serve to reduce one dimension of the terror threat to India.

[Rahul M]

manish saar, thanks for the primer. whichever way you look at it the SoKo are probably the best bet to tie up with in shipping.
also will the large ones have a monopoly on know how ? a dedicated search will likely unearth some juicy nuggets. failing that, 'if you can't beat 'em, join 'em !'

[Ameet]

FDIC considers borrowing from Treasury

http://online.wsj.com/article/SB1253281 ... TWhatsNews

[Ashwin B]

US gets tough on ratings agencies

Need to see how effectively they can enforce these checks.

[svinayak]

http://www.boston.com/bostonglobe/ideas ... ism_fails/

Why capitalism fails
The man who saw the meltdown coming had another troubling insight: it will happen again
By Stephen Mihm
Globe Correspondent / September 13, 2009
Since the global financial system started unraveling in dramatic fashion two years ago, distinguished economists have suffered a crisis of their own. Ivy League professors who had trumpeted the dawn of a new era of stability have scrambled to explain how, exactly, the worst financial crisis since the Great Depression had ambushed their entire profession.

Amid the hand-wringing and the self-flagellation, a few more cerebral commentators started to speak about the arrival of a “Minsky moment,” and a growing number of insiders began to warn of a coming “Minsky meltdown.”

“Minsky” was shorthand for Hyman Minsky, a hitherto obscure macroeconomist who died over a decade ago. Many economists had never heard of him when the crisis struck, and he remains a shadowy figure in the profession. But lately he has begun emerging as perhaps the most prescient big-picture thinker about what, exactly, we are going through. A contrarian amid the conformity of postwar America, an expert in the then-unfashionable subfields of finance and crisis, Minsky was one economist who saw what was coming. He predicted, decades ago, almost exactly the kind of meltdown that recently hammered the global economy.

In recent months Minsky’s star has only risen. Nobel Prize-winning economists talk about incorporating his insights, and copies of his books are back in print and selling well. He’s gone from being a nearly forgotten figure to a key player in the debate over how to fix the financial system.

But if Minsky was as right as he seems to have been, the news is not exactly encouraging. He believed in capitalism, but also believed it had almost a genetic weakness. Modern finance, he

argued, was far from the stabilizing force that mainstream economics portrayed: rather, it was a system that created the illusion of stability while simultaneously creating the conditions for an inevitable and dramatic collapse.

In other words, the one person who foresaw the crisis also believed that our whole financial system contains the seeds of its own destruction. “Instability,” he wrote, “is an inherent and inescapable flaw of capitalism.”

Minsky’s vision might have been dark, but he was not a fatalist; he believed it was possible to craft policies that could blunt the collateral damage caused by financial crises. But with a growing number of economists eager to declare the recession over, and the crisis itself apparently behind us, these policies may prove as discomforting as the theories that prompted them in the first place. Indeed, as economists re-embrace Minsky’s prophetic insights, it is far from clear that they’re ready to reckon with the full implications of what he saw.

[Raja Bose]

But, the solar and alternative energy focus is good news. Anything that serves to reduce the money and leverage of the Gulf will also serve to reduce one dimension of the terror threat to India.

My cynicism above is mainly due to how many "alternate energy" startups have sprung up staffed by these best and brightest who only seem to be throwing around fancy presentations and buzzwords but are doing nothing more. Before you know it solar energy will have its own futures market and Pakis will have make money off pindi channa gas futures.

[Singha]

for a huge country with a prominent area of desert and strong sun, the US can sure utilize a lot of solar energy.
wind farms near the coasts can also help all over.

but society's attitude that energy is cheap and throwaway needs to change, petrol needs to be $10 a gallon and
legal quagmires that allow communities to block such projects on aesthetic grounds need to be sorted out.

it takes for instance 10-15 years to get clearance for a new runway at any of the major US airports. everything from increased noise to decreased libido of the local toads is studied by high priced campaigners and consultants before a single dozer can move in.

[pgbhat]

Singha saar $10.00 a gallon .... that would end "US way of life" as it is now..... No trains.....no public transport in majority of country....... use of trucks ...... single people driving SUVs to work 40 miles away from suburbs .... these are the luxuries people crave and move into massa.....at $10.00 a gallon life in massa would be a suckfest. .... I want live to see that din.

[Raja Bose]

Singha saar $10.00 a gallon .... that would end "US way of life" as it is now..... No trains.....no public transport in majority of country....... use of trucks ...... single people driving SUVs to work 40 miles away from suburbs .... these are the luxuries people crave and move into massa.....at $10.00 a gallon life in massa would be a suckfest. .... I want live to see that din.

post graduate bhatt, The American way of life is precisely No Trains, No Public Transport. If fuel is $10.00 a gallon, then people will start using these modes of transportation like the rest of the civilized world. Right now most places in US have pathetic public transportation and the whole organization of shopping complexes and availability of basic amenities is made on the assumption that every American and his/her mother has a car to haul their butt to places. This is what needs to change as Singha saar put it because right now Americans think:
(a) Fuel is cheap.
(b) Cheap fuel is their birthright.

You can see such habits in simple everyday things here. In India typically one parks his/her car in a relatively central location and then walks around doing the shopping before returning to the car. In US, the typical Amirkhan jumps into a car, parks as close as possible to the 1st store, buys his/her stuff, jumps back into the car and moves on to the next store even if it is just across the street and the pattern repeats itself. This has to change.

[pgbhat]

RB, Now since the car lobby has weakened (gas lobby still hasn't I think ) .... do you think it will change?....... I would love to see people using trains to travel from villages to main cities inside a state.... use of goods train for transport. ......oh wait that is what asians and oiropeans do. ...... amirkhans will have steep learning curve if that sh1t goes down.

[ramana]

hari and other gurus, The first post had some statements. Are they validated and if not what is the right summation?

[shyam]

FHA bailout a sure thing

[Raja Bose]

RB, Now since the car lobby has weakened (gas lobby still hasn't I think ) .... do you think it will change?....... I would love to see people using trains to travel from villages to main cities inside a state.... use of goods train for transport. ......oh wait that is what asians and oiropeans do. ...... amirkhans will have steep learning curve if that sh1t goes down.

Well...they will learn. They are learning already though not much yet since GOTUS is artificially trying to prop up using all the tricks in the bag.

[Hari Seldon]

hari and other gurus, The first post had some statements. Are they validated and if not what is the right summation?

Ramana garu, moi would dub myself an enthusiast, not a guru by a long shot.

That said, am not clear about which post you are referring to.

[Hari Seldon]

California Joblessness Reaches 70-Year High (NYT)

Calif, erstwhile golden state, is set to be hit quite hard indeed.

While job losses continue to fall, the state’s new unemployment rate — 12.2 percent, according to the Bureau of Labor Statistics — is far above the national average of 9.7 percent and places California, the nation’s most-populous state, fourth behind Michigan, Nevada and Rhode Island.

{All 4 are welfare heavy semi-socialist states. Nothing wrong with that, just saying. Even semi-socialist EUstan tolerates consistently high unemploymt than does the US}

Statistics kept by the state show California’s unemployment rate was 14.7 percent in 1940, said Kevin Callori, a spokesman for the California Employment Development Department.While California has convulsed under the same blows as the rest of the country over the last two years, its exposure to both the foreclosure crisis and the slowdown in construction — an industry that has fueled growth in much of the state over the last decade — has been outsized.

That plus Calif's gubmints at all levels - state, county, municipal are all flat broke. Pension promises made to state employees are in shambles. Debt soars as we speak. Budget holes are past fillable and bailout reality is stark indeed.

[Hari Seldon]

FHA bailout a sure thing

Great. Kindly add FDIC to the list.

FDIC considers tapping Treasury credit line (FT)

The Federal Deposit Insurance Corporation is considering tapping its credit line of up to $500bn from the US Treasury as it explores options on how to replenish the dwindling fund protecting depositors, said Sheila Bair, its chairman.

The FDIC has charged the industry an emergency fee this year to raise money for the fund and has the option of imposing two more fees before the year is out. It has so far been reluctant to tap its line of Treasury credit. But regulators are also increasingly concerned about putting further stress on banks struggling with losses. This year, 92 banks have failed and more are expected to follow.

Underscoring those concerns, Ms Bair expressed reservations about proposals to further extend “mark-to-market” accounting – the reporting of financial holdings at current market prices – to bank loans, saying such a requirement could “exaggerate” bank losses during periods of market stress. “In some cases, marking banking assets to market prices doesn’t make sense. When a bank is holding a deposit, a loan or a similar banking asset for the long-term, it shouldn’t have to mark them to market values that may vary widely over time,” she said. “We don’t need to deepen crises by inaccurately reporting so-called market values for loans and other assets.”

Ms Bair also warned that the financial system would be more fragile following the crisis unless there was a “credible method” for closing down too-big-to-fail companies that ran into trouble, saying that the financial markets were even more interconnected than before the crisis.

“Unfortunately, measures taken during the past year, while necessary, have only reinforced the idea that some financial firms are simply too big to fail,” she said. “Unless we adopt needed reforms, our system will be more, not less, fragile after this crisis.”

Ms Bair has long been a proponent of a system for resolving such troubled companies. The FDIC has a system for seizing deposit-taking institutions for a short time, before winding them down or selling them, to protect depositors.

But the biggest banks are organised into holding companies, which stand outside the current powers.

This too-big-to-fail doctrine creates a vicious cycle that needs to be broken,” she said. “We need a credible method for closing large financial companies without inflicting collateral damage on the economy.”

Ms Bair, whilst making all the right noises (a la Zardari) goes ahead and does whats in the best interests of the banking establishment, anyway.

[Hari Seldon]

Prescient, eh? Above post dot-connected the FHA and FDIC, both teetering on the brink and lo, the NYT chimes in on eggsactly the same problem....

The Bailout Bill Comes Due, Vexing Agencies

'Bailout bill comes due'? No sir, not yet at any rate. Its merely threatened to start coming due slowly only.

The Federal Housing Administration, which is supporting the housing market by insuring loans for millions of struggling buyers, said Friday that its cash reserves had fallen below 2 percent for the first time. Raising its insurance premiums would replenish the reserves, but could also hamper the housing recovery. Another unpleasant option: asking for a federal bailout.

The Federal Deposit Insurance Corporation, meanwhile, is running out of money to pay back the depositors of failed banks. Its chairwoman said Friday the agency might for the first time decide to borrow from the Treasury.

Taken together, the two developments indicate “the limits of the government’s ability to make all the bad stuff go away,” said the investment strategist Ed Yardeni.

The F.H.A. has become the government equivalent of Countrywide Financial, the hyper-aggressive private lender that crashed two years ago, Mr. Yardeni said. “If you lend money to people with a low probability of paying you back, you shouldn’t be surprised if they don’t,” he said.

F.H.A. officials said Friday that rumors swirling around its reserve fund were untrue.

“There will be no taxpayer bailout, there will be no special appropriations, no legislation, no action requesting any additional funds whatsoever,” said David H. Stevens, the F.H.A.’s commissioner, in a conference call with reporters.

Bah. Sri DH Stevens lies precisely coz his words carry no legal implications. He won't be prosecuted for 'misleading taxpayers' should the FHA (as is likely) have to be bailed out with (unborn) taxpayer monies.

“There is a philosophical question about the Treasury credit line, whether that is there for losses we know we will have or whether it’s there for unexpected emergencies,” Ms. Bair said.

Those losses are likely to keep rising into the indefinite future, said Lou Barnes, a Boulder, Colo., mortgage banker.

“Government life support is crucial, but the patient has an open artery and each new transfusion of blood is just running out onto the floor,” Mr. Barnes said.

This could get very ugly very soon, janta. That the D&G part of me speaking of course. Lez hope it doesn't come about but what if it does?

[Neshant]

Their economy is heavily based on financial services which as it turned out was guys in fancy suits rolling dice, betting on stocks... and losing very badly. Meanwhile, their north sea oil fields are running dry.

They have a few global brand names and a few companies producing some high tech stuff. But they are borrowing & spending away to glory at a much faster rate than these companies can create wealth for the country.

If they believe they are America and can keep on spending without getting a margin call, they will be in for a shock.

-----

Britain 'facing immediate risk of full-blown financial crisis'

http://www.dailymail.co.uk/news/article ... risis.html

[Hari Seldon]

If they believe they are America and can keep on spending without getting a margin call, they will be in for a shock.

As founding member of the UK-stan Karma-Watch Society, lemme tell you that UKistan might indeed be the chosen land with the chosen beepals. No repurcussions for the hoard of bad karma they have accumulated over the centuries. None. The land that karma forgot, truly. For long many have waited, in vain lemme add, for UKistan to implode or at least decline enough to not matter anymore. That has not only not happened, but also become increasingly unlikely.

[Hari Seldon]

Bankrupt Vallejo Calif. to charge $200 for 'non-serious' 911 calls

That happens 4,000 to 5,000 times a year, adding up to a tab of $2 million. Only 3 percent of the hangup calls are actual emergencies.

911 dialers who answered dispatchers' return calls and explained their mistake wouldn't be charged the new fee, which the city council will vote on in a few weeks.

"Obviously, there's that many pepole that don't think it's convenient to pick up the phone and say it's no problem," Lt. Abel Tenorio, a spokesman for the Vallejo police, told the Times-Herald. "This might make them think twice."

Misusing 911 lines is a violation of California state law, but the fee is a new measure against 911 abuse.

It's part of a trend of local governments trying to grapple with 911 costs. In June, Tracy, Calif., instituted a $48/year "membership" for residents who call 911 for medical emergencies.

Remember when we used to call money paid to government for essential services "taxes"?

[Sanjay M]

Economists Review 'Minsky Meltdown' Predictions