John Robb's Weblog

Barometers

Financial Times: "The panic in world credit markets reached historic intensity on Wednesday prompting a flight to safety of the kind not seen since the second world war. Barometers of financial stress hit record peaks across the world. Yields on short-term US Treasuries hit their lowest level since the London Blitz."

Out of Money

The US Treasury moves to bail out the Federal Reserve.

Russia in Crisis

"Russia authorities halted trading on the country’s stock exchange on Tuesday after it plunged 17 per cent in a broad-based sell-off." “This is a good old-fashioned panic”, said Steven Dashevsky, head of research at Unicredit in Moscow. “It doesn’t feel like there is anyone domestically that can put the brakes on.”

Don't let the door,

hit you on the ass on your way out. Good riddance!

The Global Financial Meltdown Continues

Wow, now the massive AIG (not unexpected) is on death watch. As Yves points out, the Fed and the Treasury don't have the regulatory tools/expertise in the financial insurance market to mitigate its collapse.

Financial Meltdown Continued

Lehman is rising in the dead pool (fast). Fannie and Freddie are now under gov't control, and due to conflicted mission (a political/national need to lend heavily but a corporate need to reduce lending to raise capital), they will only get more insolvent by the day. SWFs are halting new investments in the US. Fiscal crisis is in the wind for all layers of gov't.

This is going to be a very interesting fall.

Maybe GGs in the US by 2009/2010 if things continue to go in this direction.

Booz Allen Hamilton

Looks like some defense consultants at Booz Allen are jumping on the DIY weapons theme. It'd be easier just to hire me.

Unfortunately, the last time I ran into Booz Allen, they snuck into an end of DoD end of project presentation I gave on some innovative software that my team built. Net result: they stole the ideas/innovation and resold it as their own (as vaporware).

(I've heard similar stories from two other people I know. Wow, I just got a note from another person that said they had similar experiences with Booz. That's three.).

I guess it is a safe bet that you SHOULD NOT do business with Booz Allen.

Legitimacy and Non-state Groups

Putting people to work.

The Great Unravelling?

Steve Waldman has a post on how the unwinding of the credit crisis will finally reveal how badly off most American's are financially.

I'm also intrigued with Thomas Paley's point that the shift towards inflation fighting at the expense of full employment in the mid seventies might have been the key to decline (the "Great Moderation" as the "Great Unravelling"). So, instead of personal incomes 50-70% higher than in the 70's, and nearly 100% if considered on a household basis, we end up with zero growth (and extreme wealth concentration).

Add this all up and Americans (as well as most people in the developed world) are extremely vulnerable to systemic shocks. The impacts generated will far exceed what they would have been if we had kept the post WW2 social compact in place.

Immigration Theater

More raids on illegals. Mainly theater. Won't make the transition to the next administration. Business interests will win. The rot is intrinsic at this point.

Globalization will destroy incomes for the vast majority in the developed world, guaranteed. We've been at a plateau for the last thirty years (the average person in the US makes slightly less than he did in 1973). A descent to global norms for similarly skilled/trained labor is inevitable. Work is now globally fungible. Comparative advantage only applies to corporations, not nation-states and their populations.