naked capitalism

alan von altendorf says:

Yves,

Bron Sucheki at the Perth Mint has an important post on credit and reserve creation.

http://goldchat.blogspot.com/2009/02/roving-cavaliers-of-credit.html

Maybe it’s obvious to everyone else, but it hit me like a bombshell of enlightenment.

fresno dan says:

from Setser “It turns out that state backed companies weren’t borrowing as private sector entities — or at least no one who was lending them money thought so. They were able to borrow so much largely because of their state backing. And now, given Dubai, Inc’s cash flow troubles, Dubai, Inc may soon morph into Abu Dhabi, Inc.”

Hmmmm…who does that remind me of…some country setting up private, semi-quasi-not backed by the full faith and credit-but yeah, backed by the full faith and credit… of the sovreign … uh, Francis – no thats not it. O yeah, Fannie!

Dubai collapses within a year.

Anonymous says:

"China often had to spend 15% or so of its GDP buying foreign assets — to avoid currency appreciation didn’t affect overall levels of output or employment in the US, but it certainly affected the composition of output and employment. More money was allocated to home construction (for a time) and less to investment in the production of goods for export than otherwise would have been the case. "

Brad Setser discusses the 10000 foot view of the state run "trade" agendas in the export surplus countries in determining the composition of output and employment in the US. Such distortions would be less likely without a willing host like the Bush and Clinton administrations.

Like the S&L crisis for Reagan/Bush, the housing bubble provided cover for the damage lopsided trade policies were doing to the American economy. A huge jobs program, courtesy of American middle class wealth.

The MBS fraud was not an accident, it was part of the strategy of creating the debt bubble. For the time being, the US has narrowly averted an internal coup by our own elected government. Watching what is left of the Republican klan, they are still operative at a certain level. O'bama would be wise to take his cue from the American people and cleanse the government of these traitors.

ruetheday says:

http://finance.yahoo.com/news/Dimon-Obamas-Bonus-Slams-cnbc-14235714.html

Dimon slamming Obama for his bonus criticism.

This is almost as bad as Pandit playing down nationalization fears the other day, saying he was certain the regulators were committed to “free market principles”.

These guys have some cajones, taking bailout dollars while thumbing their noses at the government, the regulators, the president, and the taxpayers. Obama needs to step up and dole out some pain, quickly.

Anonymous says:

“The Ascent of Money”

wasn’t impressed by it

doc holiday says:

yves,

i would like see fewer posts star out with word yves. what is the point?

Anonymous says:

I’m a pretty regular angel investor, been involved in 10-20 deals over the past 36 months.

I don’t think it’s correct to cast it as an “either or” proposition, when it comes to angel versus family/friend funding. (Nor is it correct to look at VC and angel funding in the same way.)

It’s more accurate to just see all of these investors as falling on different places in the timeline. Family/friends/credit cards are critical for that first $250k-$500k, when you’re nothing but a fantasy. Angels are a great place to go when you need $500k-$1.5m to go from prototype to something approaching product. And of course VCs should be on the road-map when you need to raise more to scale your business even more. (And if you need more than $20m, you start to look at private equity + + mezzanine + strategic investors.)

Some businesses can of course leap-frog past any one of the above steps. But this still remains the general path taken by hundreds of startups every year.

All of the players in the food chain have different appetites for risk, and different expectations for potential reward. And having any one of us drop out of the cycle is actually very disruptive to the entire process.

Anonymous says:

By the way, this is an interesting observation:

http://www.latimes.com/business/la-fi-autosales4-2009feb04,0,2662833.story

Automakers reported dismal January results today, as U.S. sales for the month fell below those in China for the first time, according to industry estimates.

Final January numbers aren’t due until later today, but according to calculations from General Motors Corp, Chinese consumers bought about 790,000 vehicles in the month, compared with just under 680,000 sold to customers in the U.S. A year earlier, sales here totaled 1 million cars and light trucks.