The Republican Death Machine Jacob Weisenberg, Slate (hat tip reader John D)
Marijuana’s new high life Los Angeles Times (hat tip DoctoRx)
Physicists successfully predict stock exchange plunge New Scientist (hat tip reader John D)
Swiss “Black” Accounts – A Trillion Dollar Problem Bruce Krasting
More Foreclosures Than Home Sales, Again Rich Toscano
Flu pandemic’s impact seen as mixed for U.S. stocks Reuters
Anti-speculation push may topple oil prices Reuters hat tip reader Michael)
The Final Days of Merrill Lynch William Cohan, Atlantic
Antidote du jour:
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“Flu pandemic’s impact seen as mixed for U.S. stocks”
Wow, I feel better already.
http://mpettis.com/2009/08/it’s-not-yet-the-end-of-china’s-massive-stimulus/
According to a recent article on Reuters, on Saturday Lou Jiwei, the chairman of the CIC, China’s sovereign wealth fund, said at a conference on Saturday in response to a question about his expected performance: “It will not be too bad this year. Both China and America are addressing bubbles by creating more bubbles and we’re just taking advantage of that. So we can’t lose.”
Published without comment. It doesn’t need one.
Of all the bailouts last year, the bail outs of Merrill Lynch might and Citibank might be the worse examples for future moral hazard. By screwing the taxpayers and the shareholders of Bank of America, and taking advantage of the panic of Bernanke, the arrogance of Paulsen, and the stupidity of Lewis, he saved both the shareholders of Merrill (the biggest being executives and traders at Merrill) from being deservedly wiped out, ditto the unsecured creditors and employees (includding said traders and their bonuses, and reducing the bondholders to just pennies on their investment, as Lehman’s brothers bondholders are discovering. Of course that is what people who invest in a firm playing with fire (as Michael Lewis described it so well last year) should have ended up with. Nada, zip, broke and on the street. But instead the traders now all believe that with helicopter Ben at their backs, they can roll the dice on long odds knowing that the profits will be theirs, and the losses the taxpayer.
The oil article is weaker than it needs to be, but what is interesting in it is that everyone concerns accepts as a given that the oil markets are rigged and dominated by excess speculation, i.e. speculation not based on market fundamentals. I would say that’s the take home message. If Greenberger who is quoted in the article was heading the CFTC I would be more comfortable that this kind of speculation was going to be wrung out of the market. But the CFTC is headed instead by Gensler, a guy who promoted deregulation but now says he as seen the light. Not sure if that light is the same one I see. The problem is that what has been discussed so far has been confined to increasing reporting requirements and not restricting access to the oil market and limiting positions. The problems with the article are that it states stupidly that price is up because demand is up, even though this isn’t true and there is a huge glut on the market, it first quote is from John Brodman, a Bush Administration goof who even after all the chaos never met a deregulation he didn’t like, and while Goldman is quoted and its role as a bigtime speculator is mentioned, the author also quotes Barclay’s without noting the fact that it is a major speculator as well.