Free Markets, Free People
We finally got a mixed bag on the employment front this month, a welcome change from the purely awful. However, with everyone focused on “creating” jobs I think this quick synopsis attacking the unrealistic expectations of when and where jobs will come from is well worth reading. This chart gives you an idea of how bad it really has been (click image for larger version)
Yves Smith looks at the problem of how to handle the prospect of the financially weaker members of the European Union possibly defaulting. neither the PIIGS nor their colleague states want to take the steps they may need to take. Markets however are sending a clear message, “Do Something!” The risk goes beyond the direct damage from the potential losses from holding these countries debts. European banks are already shaky, with shaky assets and still a lot more leverage than is safe. I believe Europe’s bear market is likely back on.
European banks are shaky? How provincial of me not to mention our own banks. The coming wave of defaults in the Alt-A and Prime mortgage space are not getting enough attention, Yves helps out there as well. Not only are the losses coming (pretending loans are good only works until they actually default) but the banks are in for some serious lawsuits from all kinds of parties that bought the toxic loans. First in line are Freddie and Fannie. They will still lose at least 400 billion, but they’ll take a good chunk out of the banks hide on the way down.
the phrase “credit specialists at Citi” is not exactly the kind of thing which instills enormous confidence in analysts and investors these days
I think that is an understatement. They want to sell another fancy derivative designed to remove all risk if there is a systemic crisis when, of course, those supposed to pay up will certainly have the money to do so….Right?
Please imagine me banging my head against the keyboard. And no, the response of the Citi Spokesman doesn’t make me feel any different, in fact, it makes me feel worse.
The term liquidity is the pixie dust the financial commentariat uses to obscure what is really going on. I maintain, and have throughout the last few years, that our difficulties have not been a liquidity crisis (though many who had no business exposing themselves individually to liquidity drying up for them certain had a liquidity crisis) but a solvency crisis. David Merkel points out that liquidity always exists, it just goes where the marginal credit buyer has gone. Where insolvency risk seems to be increasing, the marginal buyer can become very scarce and will provide it to areas seemingly exposed to less risk. At the end of the day it is solvency that is our problem, and until we solve that liquidity will go to those perceived to be least at risk. Right now that is the government and those they are backing. Hence a credit crunch for much of the economy.
Speaking of credit, consumer credit has now declined for 11 straight months. A record, and by a long shot. (Click image for a larger version.)
In the “no big surprise department,” and paralleling the argument I made at the time, it has now been shown that the ban on short selling during the crisis did not help support prices and damaged stock market liquidity. In the no surprise at all department the biggest complainers turned out to have fundamental problems that short sellers were pointing out accurately (much better than our regulators.) The loudest complainer of all, Overstock.com and their bizarre CEO, Patrick Byrne. The upshot, they have been cooking their books for years, just like the short sellers were claiming.
Cross posted at The View from the Bluff
I have to admit upfront that I have a conflict of interest on this, but the Immersive Media cameras from my sisters company are amazing. Throw in that it gives some of the best views of the devastation in Haiti and I am kind of speechless. Go ahead and take a trip with them through Port au Prince and drag the view to look around in a full 360 degree view from a moving vehicle.
In addition to taking you into this disaster the potential applications seem rather large to me. Check it out. You can grab the screen while it is still or when playing and drag the view wherever you want.
The initial commercial applications are kind of obvious, but I am curious about the applications to entertainment. Specifically movies. Like most new ways of filming I expect the initial efforts to be gimmicky, and low in actual value other than the novelty. However, imagine watching movies with an interactive ability for the viewer to shift the camera view from a first person point of view. The directors focus becomes less of an issue, and all of what is happening in view of whoever a character is becomes part of the story. Talk about taking the idea behind something like Vantage Point to a new level. Other interactive technologies could be combined with more impact.
You can view more footage of Haiti and look into the technology at http://www.immersivemedia.com/haiti/
Update: The autoplay was annoying, and the embed for the other footage seems to be having a problem at the moment, so I included a link to a video instead until the flash embed starts working again.
In this podcast, Bruce, Michael, Lance, and Dale discuss the furor over the Health Care bill, and the sate of the economy.
There is no direct link to this week’s podcast, since my computer went TU right in the middle of it. You’ll have to listen at BlogTalk radio.
The intro and outro music is Vena Cava by 50 Foot Wave, and is available for free download here.
As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2007, they can be accessed through the RSS Archive Feed.