Random Links XII

How Washington Mutual imploded:

http://www.nytimes.com/2008/12/28/business/28wamu.html

How AIG imploded:

http://www.washingtonpost.com/wp-dyn/content/article/2008/12/28/AR2008122801916_pf.html

http://www.washingtonpost.com/wp-dyn/content/article/2008/12/29/AR2008122902670_pf.html

http://www.washingtonpost.com/wp-dyn/content/article/2008/12/30/AR2008123003431_pf.html

Commentary:  http://curiouscapitalist.blogs.time.com/2008/12/30/did-those-people-at-aig-not-understand-anything-about-financial-risk/

For Ubernerds:  http://www.acredittrader.com/?p=65

Bear Stearns Downfall:

http://www.vanityfair.com/politics/features/2008/08/bear_stearns200808?printable=true&currentPage=all

Frannie Downfall:  http://www.calculatedriskblog.com/2008/07/krugman-on-gses.html

Russian economic problems:

http://www.nytimes.com/2008/12/30/business/worldbusiness/30gazprom.html

http://www.rgemonitor.com/economonitor-monitor/254558/can_russia_avoid_a_hard_landing

http://fistfulofeuros.net/afoe/economics-and-demography/the-ruble-fall-continues-as-unemployment-soars/

http://www.washingtonpost.com/wp-dyn/content/article/2008/10/03/AR2008100301976_pf.html

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/3469090/Russias-banal-reality-lies-in-between-energy-superpower-and-bankrupt-state.html

Risk Mismanagement:

http://www.nytimes.com/2009/01/04/magazine/04risk-t.html

Commentary:

http://www.nakedcapitalism.com/2009/01/woefully-misleading-piece-on-value-at.html

http://baselinescenario.com/2009/01/04/risk-management-var/

More risk mismanagement:

http://nickgogerty.typepad.com/designing_better_futures/2009/01/post-model-manifesto.html

Interestingly, ISTR Tom Clancy mentioning this danger – of everyone using the same models – in “Debt of Honor”, 15 yrs ago.

Fiscal Stimulus Critique:

http://blogs.ft.com/maverecon/2009/01/can-the-us-economy-afford-a-keynesian-stimulus/

Basically, he thinks the US can’t afford fiscal stimulus ‘cuz the resultant massive deficits will spook our foreign creditors.

Rollover Crisis Watch:

http://www.iht.com/articles/2009/01/07/business/yuan.php

Commentary:

http://www.nakedcapitalism.com/2009/01/ny-times-china-cooling-on-us-debt.html

Skeptical commentary:

http://blogs.cfr.org/setser/2009/01/08/china-actually-hasnt-lost-its-appetite-for-us-treasuries/

Winning Afghanistan:

http://fistfulofeuros.net/afoe/europe-and-the-world/a-european-option-in-afghanistan/

Most interesting was the notion, backed by a US Army report (4 MB pdf), that Mujaheddin victory in Afghanistan wasn’t inevitable ’till the USSR fell – i.e., that it was the loss of Soviet backing, and not the Red Army’s withdrawal, that doomed Russia’s Afghan client state.

Oil Prices & Recession:

http://www.econbrowser.com/archives/2008/12/the_oil_shock_a.html

http://www.econbrowser.com/archives/2009/01/the_oil_shock_a_1.html

Jubilee Watch:

http://www.ft.com/cms/s/0/d7ff9856-e191-11dd-afa0-0000779fd2ac.html

http://www.ft.com/cms/s/0/4f5c5ba2-dc22-11dd-b07e-000077b07658.html

http://clusterstock.alleyinsider.com/2009/1/the-real-problem-our-debt-mountain

http://www.rgemonitor.com/roubini-monitor/253653/we_need_a_new_holc_-_more_than_a_new_rtc_or_rfc-_to_provide_massive_debt_relief_to_the_household_sector_we_need_to_create_the_home_home_owners_mortgage_enterprise

http://www.vanityfair.com/online/politics/2009/01/niall-ferguson-america-needs-to-cancel-its-debt.html

Those familiar with the Old Testament will recall the concept of jubilee (i.e., mass debt cancellation).  I’ve been wondering for a while now if (when?) the pressures for similarly radical measures will appear (and build) as this crisis continues.  The aforementioned present economic articles for a modern jubilee (briefly, that the drag on consumption imposed by household deleveraging will hinder economic growth for an unacceptably long period of time).  But there are other arguments (e.g., hatred of Wall Street) as well.

Jubilee Variant:  Trickle-Up Bailout:

http://interfluidity.powerblogs.com/posts/1236786808.shtml