As usual, George Soros has a flair for understatement.
Soros is criticizing the idea of creating a publicly-held "bad bank" through which the government could isolate the toxic mortgage debts the banks hold and thereby limit further damage from the credit crisis.
What he wants to do instead is create a government-held "good bank", consolidating all of the non-toxic assets into one central depository, although he cautions that it would "too closely approach nationalization".
Yeah, I think governmental control of the near entirety of good capital in the financial sector would be just a bit more than "approaching nationalization".
Showing posts with label Economy. Show all posts
Showing posts with label Economy. Show all posts
Wednesday, January 28, 2009
Monday, January 26, 2009
Back from the abyss...
...with a rejoinder to Keynes as well.
Supporters of the current proposed economic stimulus keep telling me, quoting Keynes, "in the long run, we are all dead." They use this as justification that what matters is getting the economy back up and running in the short term, and worry about future problems when they arise.
My response to "in the long run, we are all dead"? "In the last major recession (1979-1982)... today was the 'long run.'"
Supporters of the current proposed economic stimulus keep telling me, quoting Keynes, "in the long run, we are all dead." They use this as justification that what matters is getting the economy back up and running in the short term, and worry about future problems when they arise.
My response to "in the long run, we are all dead"? "In the last major recession (1979-1982)... today was the 'long run.'"
Monday, November 10, 2008
Having fun in a bad economy - a "circling the drain" pool
In the wake of Circuit City's bankruptcy (which, honestly, was seen coming a long ways away) and Deutsche Bank setting a one-year forward-looking price target for General Motors stock of $0 (yes, zero), I've decided to put down some of my own money, the fruit of my labor, to amuse myself (and you, my readers) in a guessing game of buzzard-like proportions.
The name of the game: Guess when a gallon of gas will be worth more than a share of General Motors stock!
Some general rules to lay down... I will be calculating the price of GM's stock as of the closing price at any given day, and will compare it against the price posted at the S. Westnedge Road Speedway in Kalamazoo for a gallon of regular unleaded gas at the same time (currently standing at $1.95 a gallon). For those interested in a baseline measurement, General Motors stock is, as I am typing this out, $3.33 a share. One guess per person, and whoever is the closest to the right day I will send a $20 BP gas card (if, like myself, you don't drive... well, it works for getting snacks from their convenience stores as well!). I am posting this on my LiveJournal, Facebook (as it takes my LJ feed), The Corner Keyboard (my economics and politics blog), and MySpace, and, if there is no winning day by the end of 2009, well... I guess America wins, doesn't it?
Best of luck to anyone guessing!
-Michael Fisk
10 November 2008
The name of the game: Guess when a gallon of gas will be worth more than a share of General Motors stock!
Some general rules to lay down... I will be calculating the price of GM's stock as of the closing price at any given day, and will compare it against the price posted at the S. Westnedge Road Speedway in Kalamazoo for a gallon of regular unleaded gas at the same time (currently standing at $1.95 a gallon). For those interested in a baseline measurement, General Motors stock is, as I am typing this out, $3.33 a share. One guess per person, and whoever is the closest to the right day I will send a $20 BP gas card (if, like myself, you don't drive... well, it works for getting snacks from their convenience stores as well!). I am posting this on my LiveJournal, Facebook (as it takes my LJ feed), The Corner Keyboard (my economics and politics blog), and MySpace, and, if there is no winning day by the end of 2009, well... I guess America wins, doesn't it?
Best of luck to anyone guessing!
-Michael Fisk
10 November 2008
Wednesday, October 22, 2008
The only thing certain in this economy...
...is absolutely unprecedented volatility. I'm sure people with long-term options contracts are probably scrambling for a dark corner to hang themselves in right about now, or a roof to leap off from. I wouldn't want to attempt calling these markets right now.
Today, the fear isn't the banks, but rather impending recession. Stocks are sucking wind, gold is off over 25% from its highs a couple of months ago, but at least we'll have cheap gasoline... wholesale gasoline futures at the moment are around $1.61 a gallon (when you figure in taxes, we might be seeing gas below $2.40 before too long if they maintain those levels).
Beyond just that, the currency markets are completely going bananas. Remember all the apocalyptic talk about the weakening dollar? Here's some data for you; from the dollar's weakest performances just over three months ago:
The euro has gone from $1.60 to $1.28.
The pound sterling has gone from $2.01 (and a local strength of $2.10 a year ago) to $1.63.
The Canadian dollar has gone from $1.01 (and a local strength of $1.08 a year ago) to 80 cents.
The Norwegian krona has gone from 20 cents to 14 cents.
And, in the prime example of currency freefall, the Australian dollar slid from 98 cents to 67 cents.
Overall, that's a good sign; it's meaning that investors are, on balance, bullish about America's economic prospects going forward.
Even if we can't see it too well right now.
Today, the fear isn't the banks, but rather impending recession. Stocks are sucking wind, gold is off over 25% from its highs a couple of months ago, but at least we'll have cheap gasoline... wholesale gasoline futures at the moment are around $1.61 a gallon (when you figure in taxes, we might be seeing gas below $2.40 before too long if they maintain those levels).
Beyond just that, the currency markets are completely going bananas. Remember all the apocalyptic talk about the weakening dollar? Here's some data for you; from the dollar's weakest performances just over three months ago:
The euro has gone from $1.60 to $1.28.
The pound sterling has gone from $2.01 (and a local strength of $2.10 a year ago) to $1.63.
The Canadian dollar has gone from $1.01 (and a local strength of $1.08 a year ago) to 80 cents.
The Norwegian krona has gone from 20 cents to 14 cents.
And, in the prime example of currency freefall, the Australian dollar slid from 98 cents to 67 cents.
Overall, that's a good sign; it's meaning that investors are, on balance, bullish about America's economic prospects going forward.
Even if we can't see it too well right now.
Thursday, July 31, 2008
Exhibit #65,537...
As to why government oversight results in behavior that defies logic: California investigates planned bottle water plant - for global warming reasons
For those of you wondering, yes, I am well aware that bottled water has quickly become the bête noire of the environmental movement, and that can be understood. If there are local concerns about what a water diversion plan of this scale would mean to the surrounding ecosystem, then those are things that should be heard before operations move forward. If the citizenry have decided that environmental impact is valuable enough to offset the economic benefit from such a facility's operations, then so be it; it's their priorities, after all.
But what in the blazes does it have to do with global warming? It's not like they're, say, manufacturing the bottles on site. The only greenhouse gas emissions related to the operations that are above and beyond a typical office building would be related to commuters going to work there, not from anything the facility would be doing.
Could it be a knee-jerk reaction to bottled water? Possible. Could there be some nativist resentment over the plant (it will be operated by Swiss-owned Nestlé S.A.)? Possible. Could there be some bureaucratic conflict of interest (i.e. somebody is angling for the site to be used by some other business or social interest)? Also possible; after all, progressivism and heavy-handed conflicts of political interest go together like peanut butter and jelly.
Is global warming being used as a whitewash for whatever reasons somebody has for scotching the development? You better believe it.
For those of you wondering, yes, I am well aware that bottled water has quickly become the bête noire of the environmental movement, and that can be understood. If there are local concerns about what a water diversion plan of this scale would mean to the surrounding ecosystem, then those are things that should be heard before operations move forward. If the citizenry have decided that environmental impact is valuable enough to offset the economic benefit from such a facility's operations, then so be it; it's their priorities, after all.
But what in the blazes does it have to do with global warming? It's not like they're, say, manufacturing the bottles on site. The only greenhouse gas emissions related to the operations that are above and beyond a typical office building would be related to commuters going to work there, not from anything the facility would be doing.
Could it be a knee-jerk reaction to bottled water? Possible. Could there be some nativist resentment over the plant (it will be operated by Swiss-owned Nestlé S.A.)? Possible. Could there be some bureaucratic conflict of interest (i.e. somebody is angling for the site to be used by some other business or social interest)? Also possible; after all, progressivism and heavy-handed conflicts of political interest go together like peanut butter and jelly.
Is global warming being used as a whitewash for whatever reasons somebody has for scotching the development? You better believe it.
Wednesday, July 30, 2008
Anybody bother noticing...?
Brent crude falls to $121
Amazing how we heard daily stories about the run-up in price, but only crickets once it drops $25 a barrel from its peak.
Another nail in the coffin of the economic doom-sayers: Gold is down today over $20 an ounce, now off over 10% from its peak.
You'd think this wasn't news or something...
Amazing how we heard daily stories about the run-up in price, but only crickets once it drops $25 a barrel from its peak.
Another nail in the coffin of the economic doom-sayers: Gold is down today over $20 an ounce, now off over 10% from its peak.
You'd think this wasn't news or something...
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