Random Links VII

Financial Doomsday Colloquy:

Roubini:  http://www.fxstreet.com/futures/market-review/outside-the-box/2008-02-12.html

Wolf:  http://blogs.ft.com/wolfforum/2008/02/americas-economy-risks-mother-of-all-meltdowns/


Roubini:  http://blogs.ft.com/wolfforum/2008/02/why-washington%e2%80%99s-rescue-cannot-end-crisis-story#comment-207190

Wolf:  http://www.ft.com/cms/s/0/0e63ad12-ef9c-11dc-8a17-0000779fd2ac.html

Note this all took place in _early_ 2008.

Updated Financial Loss Estimateshttp://www.rgemonitor.com/roubini-monitor/255236/total_36t_projected_loans_and_securities_losses_18t_of_which_at_us_banksbrokers_the_specter_of_technical_insolvency

See also this post, which notes some areas Roubini left out.

Future US Financial Losses:


I would’ve preferred more detail re. their housing price assumptions.  Interesting to compare with the above.

Financial Crisis for Beginnershttp://baselinescenario.com/financial-crisis-for-beginners/

Manufacturing collapse:


US Manufacturing:


Reports of its death are apparently somewhat exaggerated.  I still wouldn’t mind seeing those low-value jobs reverse-offshored.

Credit Crunch / Credit Card Delinquency:


Cramdowns & Credit Cards:


Gay Marriage Compromise:



Kill AIG:



China CRE Crash:


Economic Crisis Instability:



American Lack of Confidence:


Interesting lines from a China-based econoblogger:

“I am not suggesting that the US is in great shape. I am suggesting that world is in worse shape, and the US has the flexibility and resources to reshape the global balance. […]This seems to be something that not many people in Washington believe. The lack of confidence is so deep that several times I heard people refer knowingly to the Chinese fiscal stimulus (yes, that vague, risky, and hard-to-understand stimulus package) as the ‘gold standard’ of economic stimulus packages.  Gold standard?  Really?  The only way this can be true is if every other stimulus package in the world is total garbage.”

Why Obama’s stimulus is probably too small:


Fed Endgame:


The above-market interest rates for CPFF, etc. are encouraging, since it permits such programs to naturally wither as market recovery permits the reemergence of affordable private funding.  The plan to hold MBS long-term is less encouraging, as it bespeaks a desire to subsidize mortgage rates for years to come (indefinitely?).  As though we don’t already overallocate enough resources to housing.

Deficit Financing 2009:


Interesting.  So the key issue isn’t (solely) whether China becomes more reluctant to hold Treasuries (although certainly remains important).  There’s also the question of whether the private sector will be able & willing to absorb 2009’s explosion of Treasury issuance.


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