"Many thanks to Sargon Elias at CMC markets to tipping us off to this interesting video."

To be a regular reader/writer on www.interest.co.nz I found this message quite amazing.
I guess people who aren't experts in economics & finance like me, are probably more hungrier for information from different sources.

This is a good one too, some comedic predicting the results of the credit crunch quite accurately. From 2007

http://www.youtube.com/watch?v=SwRFoxgEcHc

The big three US(unservicable) car industry shiny suited CEO`s flew to Washington in individual private jets to front and beg with their tin cups (CNN). ( Incase you have not noticed, the Japanese car makers are heading down, down almost daily with their production predictions.)

Will the Fonterra shiny suits still be putting millions in their wallets for their fine debt creation effort or will they end up riding bicycles to Parliament begging with their tin cups next year?

The `when will we ever learn` tune is ringing in my ears....

Schiff is awesome. I've been listening to his radio broadcasts since 2005. Don't let anyone tell you that this mess couldn't have been avoided.

On a downside Schiff is highly egotistical to a point where he cant adjust to the microeconomic reality. His clients (including once me) have been hammered by deflation and foreign capital exposure.

And for an alternative economists view, Steve Keen has an update at

http://www.debtdeflation.com/blogs/2008/11/20/has-debt-deflation-begun/

Like Schiff, he predicted problems well before the fan and the brown stuff were even in the same room, let alone postcode

I think he likes sticking it to Neoclassical Economists from the tenor of his posts

==== snip ======
...
In the early 1930s, chastened and effectively bankrupted, Fisher came to appreciate that a misguided belief in equilibrium was the reason he had failed to anticipate the Great Depression. He reasoned that, even if the economy did in fact tend towards equilibrium, in the real world "New disturbances are, humanly speaking, sure to occur, so that, in actual fact, any variable is almost always above or below the ideal equilibrium".

The world therefore had to be analysed using disequilibrium thinking"“and using this insight, he developed the debt-deflation analysis, in which he reasoned that the "two dominant factors" that cause a Depression are "over-indebtedness to start with and deflation following soon after".

Following Fisher's lead would thus have required the economics profession to abandon the practice it had developed"“of analysing the economy as if it were always in equilibrium"“and take on a new, challenging approach of modelling disequilibrium processes.

Faced with this choice, the economics profession did what it has always to date done"“it obfuscated and bifurcated. The dominant majority of the profession ignored Fisher's arguments, and stuck with the familiar tools of equilibium analysis; only a minority (most notably Hyman Minsky) heeded Fisher's warning.

Today, economists trained in the majority tradition"”who almost certainly didn't study Fisher in their university courses, and who certainly didn't follow his guidance in their economic analysis"”continue to analyse the economy using models that presume it tends towards equilibrium.

Worse still, these models ignore completely the issue that Fisher emphasised was the most important one"”the level of private debt. And economists who believe in them occupy all the official positions in Treasuries and Central Banks around the world. Politicians following their advice can be forgiven for not realising that they are being misled, because even those economists themselves don't realise it (though they are beginning to appreciate this lesson the hard way"“see Australia's RBA Governor Glenn Stevens's comment yesterday that the current financial crisis has taught Central Bankers that they "could have a more conservative attitude to debt build-up".

====== end snip =======

Interesting read on a day that NZ Mortgage rates drop.

steptoe

just to really put the wind up you

Summary

Now you are in a better position to appreciate the battle that the Treasury and Federal Reserve have been fighting. Our problems are not a case of "subprime mortgages" or applying a little bit of capital to this company or that. We are now suffering the effects of the most massive and collective failure of business management in our entire history as a nation. This is not a case of a few bad companies, this is a case of entire industries, involving every company in them, all failing in their fiduciary responsibilities to manage risk and run their businesses prudently.

This is a hallmark of a bubble "“ everyone believes. Nearly everyone gets trapped.

And now this leaves Paulson and Bernanke to try and fix not just a few broken companies, but entire industry sectors.

The breakdown in all these charts at the same time, but especially those of JPM and C have got me on edge tonight. I would have assumed that these companies and their stock prices would have been officially supported to every extent possible. Now I have to wonder if perhaps these companies are actually "too big to save"

Stores that informed the Security Exchange of closing plans between October 2008 and January 2009:
Circuit City stores... most recent (how many?)
Ann Taylor - 117 stores nationwide are to be shuttered
Lane Bryant,, Fashion Bug, and Catherine's to close 150 store nationwide
Eddie Bauer to close stores 27 stores and more after January
Cache will close all stores
Talbots closing down all stores
J. Jill closing all stores
GAP closing 85 stores
Footlocker closing 140 stores more to close after January
Wickes Furniture closing down
Levitz closing down remaining stores
Bombay closing remaining stores
Zales closing down 82 stores and 105 after January.
Whitehall closing all stores
Piercing Pagoda closing all stores
Disney closing 98 stores and more after January.
Home Depot closing 15 stores 1 in NJ ( New Brunswick )
Macys to close 9 stores after January
Linens and Things closing all stores
Movie Gallery Closing all stores
Pacific Sunware closing stores
Pep Boys Closing 33 stores
Sprint/ Nextel closing 133 stores
JC Penney closing a number of stores after January
Ethan Allen closing down 12 stores.
Wilson Leather closing down all stores
Sharper Image closing down all stores
K B Toys closing 356 stores
LOWES to close down some stores
Dillard's to close some stores.

Today the Dow lost 427 points to close below 8,000 at 7997.28. But that does not come close to telling the real story. Today the financial and insurance stocks took a hit that, frankly, says we are probably about to enter a brand new stage of this crisis.

While we can be certain that pizza boxes are being delivered to late night, ad hoc committees in Washington DC and NYC dealing with some as yet unannounced crisis, we can only hope that the assembled teams are staffed with competent people who can craft a decent rescue.

As you know, I think that "hope" is a terrible strategy and that's one reason why I am sending this alert. The other reason is that I am on heightened alert ot either/both a market crash or a systemic banking crisis that could lead to a bank holiday.

The (formerly) largest bank in the world, Citibank seems to be headed for bankruptcy, at least if the stock price is any indication as it lost over 23% today alone.

Tonz i think we are entering the dangerous stage .
from http://theautomaticearth.blogspot.com/

At a recent Reuters Global Finance Summit former Goldman Sachs chairman John Whitehead was interviewed. He was also Ronald Reagan's Deputy Secretary of State and a former chairman of the N.Y. Fed. He says America's problems will take years and will burn trillions. He sees "nothing but large increases in the deficit ... I think it would be worse than the depression. ... Before I go to sleep at night, I wonder if tomorrow is the day Moody's and S&P will announce a downgrade of U.S. government bonds." It'll get worse because "the public is not prepared to increase taxes. Both parties were for reducing taxes, reducing income to government, and both parties favored a number of new programs, all very costly and all done by the government."

Reuters concludes: "Whitehead said he is speaking out on this topic because he is concerned no lawmakers are against these new spending programs and none will stand up and call for higher taxes. 'I just want to get people thinking about this, and to realize this is a road to disaster,' said Whitehead. 'I've always been a positive person and optimistic, but I don't see a solution here.'" We see the Great Depression 2. Why? Wall Street's self-interested greed. They are their own worst enemy ... and America's too.

Schiff is great listening and he is certainly bang on for most things ... but he has got it wrong on gold ... so far at least.

On the general gloom front i am starting to notice it - a friend of mine in property was made redundant last month. My company contracts out resources to a bank and they have frozen new hires and have told us they will be reducing our resources.

The only thing they can do is wipe out the banks and reconstitute a debt free money supply created by the government.

should take about 10 minutes to put the spreadsheet together.

the banks are history.

the financial economy is history.

we can do this the hard way or the less hard way.

i really hope some kind of miracle occurs to slow this trainwreck but there's really nothing they can do.

I just read an article, which deals with issues I was mentioning earlier. http://www.larouchepac.com/node/11837/print

Steve, The problem is the bank economists could only draw from their current and bank approved cliched ecohype and eco$speak glossary that helped keep the bubble up (now obsolete,since the Wall St deflation of credibility) . The new eco$peak terminology of the financial demise is being created offshore this takes time to 'trickle down'......Analyse the variation in the language used by Laffe and Schiff, it demonstrates the point I am making.

Yesterday , Yosano (JP economy Minister) introduced the Japanese equivalent of 'considerable shadow' when describing the USA's impact in his second economic forecast in just a week. NZ will be sitting in many deepening shadows cast from abroad and the economists won't haven't noticed how black the black clouds are on the horizon under the rising sun!

The nasty word I am hearing and reading more day by day from the Nth Hemisphere is not recession but depression and this word usually means bad weather.....just hope it doesn't deepen....Incidently, if you want to import a cheap Rolls buy a really cheap one from Hong Kong or collect a BMW from Dublin Airport! Soon you might be offered a very cheap new Japanese car arrived on dock in the USA, perhaps head to Detroit for a bargain. Cars and realestate are the grim indicators....

raf Says:
November 21st, 2008 at 9:07 am
"The only thing they can do is wipe out the banks and reconstitute a debt free money supply created by the government."

There is what should be in life and what is...
And what is, is that banks and debit are so entenched and have been for centuries, in economics, business, social structure (called favours) we would need a Maxist revolution to wipe out the banks.
Which is very unlikely for another 100 yrs or so...if ever
Such proposal will not happen
Banks may come and go, but there will be banks for a long time to come

Excellent ideas here, have emailed my mum so expect a big reply!!