Permanent Revolution

bill j on Thu 16, October 2008 @ 21:43

bill j — 2008-10-16 21:43:19

There's some good indicators here from Calculated Risk;

http://calculatedrisk.blogspot.com/2008/10/credit-crisis-indicators-some-progress.html

Arthur Bough on Thu 30, October 2008 @ 10:06

Arthur Bough — 2008-10-30 10:06:07

I correctly analysed and predicted the outbreak of the Financial Crisis back in July just a few weeks before it erupted. See :http://boffyblog.blogspot.com/2008/07/severe-financial-warning.html here. I have also written further analysis and commentary about the responses to it.

There may be a recession in some of the more indebted countries such as the US, and UK, but there ill not be a world recession. The IMF still forecasts world growth at 4%, whereas it has to fall below 2.5% before it considers it a world recession. Capital is responding with a huge Keynesian intervention, an intervention which all sections of the Capitalist class are clamouring for. Even Samuel Brittan is writing in the times calling for a Keynesian stimulus, and telling us that Keynes and Friedman are twins. Capital can do this precisely, because of the fact of the Long Wave Boom, as opposed to the Long Wave downturn in the 1930's - the US was out of synch and boomed in the 1920's which is why it could find the resources for the New Deal.

For further analysis and comment See:

http://boffyblog.blogspot.com/2008/09/socialism-for-rich.html

http://boffyblog.blogspot.com/2008/10/1929-and-all-that.html

http://boffyblog.blogspot.com/2008/10/where-weve-been-where-we-are-and-where_27.html

http://boffyblog.blogspot.com/2008/10/where-weve-been-where-we-are-and-where_28.html

http://boffyblog.blogspot.com/2008/10/where-weve-been-where-we-are-and-where_29.html

bill j on Thu 30, October 2008 @ 19:01

bill j — 2008-10-30 19:01:42

There's an excellent review of the credit crunch so far from the Bank of England here;

http://www.bankofengland.co.uk/publications/fsr/2008/fsrfull0810.pdf

"Total mark-to-market losses across the three currency areas have risen to around US$2.8 trillion.(3) This is equivalent to around 85% of banks’ pre-crisis Tier 1 capital globally of US$3.4 trillion, though only some of these market value losses are directly borne by banks....Projected credit losses on US sub-prime RMBS (Residential Mortgage Backed Securities) are now larger (at around US$195 billion), but remain significantly lower than the estimated loss of market value (of around US$310 billion), consistent with investors continuing to demand substantial uncertainty and illiquidity premia.)"

p15

In other words, the scale of write offs is far larger than anticipated worst case losses as the securitisation of assets means that uncertainty has added to the scale of the losses.

Arthur Bough on Thu 30, October 2008 @ 21:59

Arthur Bough — 2008-10-30 21:59:46

There was an intersting snippet on US CNBC today. Apparently Jamie Diamond was asked what he intended to do with the $25 billion given to Citibank - the idea was of course that this recapitalisation would enable them to start ledning again - to which his answer was - "Nothing". In fact, it appears that what the US banks do intedn to do with all the taxpayers money they have been given is not to start ledning again, but is to use it to buy up other Banks!

There appears no way the US State as things stand can stop them. But, despite what Darling has said, without actual control of the Banks there is no way the UK can control what the banks here do with the money either.