Interesting article from the NY times.
In all of this discussion, although there is plenty of discussion around economics and fundamentals; it is the general mass population and their behaviour that is most important and acts as a magnifier of any effect. If they are happy and unconcerned, it all continues and the economy can slowly be let down. If they panic, all bets are off.
Slump Moves From Wall St. to Main St. – New York Times: “For the country as a whole, recent data shows that the economy is deteriorating at an accelerating rate. From September to January, average home prices fell 6 percent compared with a year earlier. Consumer confidence has been plummeting. The private sector shed 26,000 jobs in January and 101,000 in February, while those out of work have stayed jobless longer, according to the Labor Department.
Now, the broader discomfort is filtering into cities and towns that only recently seemed beyond reach.”
Following the news on Friday, the top 3 or four here must be of concern.
We will watch this week.
Subprime Losses, source BBC
Merrill Lynch: $14.1bn
Morgan Stanley $9.4bn
Bear Stearns: $3.2bn – Fold, into JP Morgan
Deutsche Bank: $3.2bn
Bank of America: $3bn
Royal Bank of Scotland: $2.6bn
Freddie Mac: $2bn
JP Morgan Chase: $3.2bn – Buy, Bear Stearns
Credit Suisse: $1bn
BBC NEWS | Business | JPMorgan to acquire Bear Stearns: “JPMorgan Chase has said it is to buy Wall Street’s fifth-largest investment bank Bear Stearns for $2 a share.”
BBC NEWS | Business | Bear Stearns gets emergency funds: “US bank Bear Stearns has got emergency funding, in a move that raises fears that one of Wall Street’s biggest names is on the verge of collapsing.”
Interesting article from the Telegraph in the UK. We will see what happens monday.
Panic is the concern now.
Fed’s interest rate cuts are worse than useless – Telegraph: “History will show that Ben Bernanke has failed to steer the US economy away from recession. And I won’t win many friends for saying this, but the Fed chairman and his acolytes have actually made America’s predicament much worse.”
BBC NEWS | Americas | Tent city highlights US homes crisis: “The meltdown in the US mortgage market has led to record foreclosures and forced thousands from their homes. In few places is it worse than southern California, where the BBC’s Rajesh Mirchandani reports on an extreme consequence of the downturn, but one that some observers fear could grow.”
So if Bear Sterns is being bailed out, where is the money coming from?
There is money being pumped into the markets this is very concerning. This is building up yet more problems in the future. At some point we are delaying the inevitable. There will be a correction, and we will see defaults on loans.
Wall Street fears for next Great Depression – Business News, Business – Independent.co.uk: “Wall Street is bracing itself for another week of roller-coaster trading after more than $300bn (£150m) was wiped off the US equity markets on Friday following the emergency funding package put together by the Federal Reserve and JPMorgan Chase to rescue Bear Stearns.
One UK economist warned that the world is now close to a 1930s-like Great Depression, while New York traders said they had never experienced such fear. The Fed’s emergency funding procedure was first used in the Depression and has rarely been used since.”
Looking at these pictures I just had to add this one. Is very exciting.
SPACE.com — Avalanche Photographed on Mars: “A NASA spacecraft has taken the first-ever image of an avalanche in action near Mars’ north pole.”
Buffet thinks we are in a recession and there is further to fall.
Would say I agree, but what is cheap. What would the Dow Jones be at to signal this…… sub 10,000?
Buffett waiting for shares to get “very cheap” – Telegraph: “The billionaire investor, who last week published his annual letter to Berkshire shareholders, said shares are not currently cheap and he’s waiting for them to become ‘very cheap’.”
Great article, that looks at this like a scientific problem….. where do all those teaspoons go. I love the idea of a halflife for teaspoons.
“The case of the disappearing teaspoons: longitudinal cohort study of the displacement of teaspoons in an Australian research institute”
The case of the disappearing teaspoons: longitudinal cohort study of the displacement of teaspoons in an Australian research institute — Lim et al. 331 (7531): 1498 — BMJ:
This article from USA today, this is the next crisis following the subprime crisis. People have borrowed too much, and this is unsustainable.
More Americans using credit cards to stay afloat – USATODAY.com: “More Americans using credit cards to stay afloat”