David Martin

The Humility of Realism

Great article as usual.
I would be interested in knowing what you think of the role of the yen carry trade was in this - that wall of money looking for a return not available in it's home market would have been pretty difficult to stop, I think.

Would We Even Recognize a Depression if We Had One?

Debt levels to unwind of 350% of GDP versus 150% of GDP in 1929 mean that this will not resemble the 30's depression.
It will be far worse.

General Motors Bailout: Consider Other Alternatives

Who is going to be daft enough to buy a car from a company that is bankrupt and where supplies of spares may cease and warranties be void?
Actually, the big 3 are zombies, jsut like the banks, but that will not stop TPTB from pumping in good money after bad.

A GM Collapse Would Signal Hope for Robin Hood

Sales of autos are not going to recover for the foreseeable future.
Massive overcapacity has to be reduced, and the US big 3 are by far the weakest and most poorly run.
Not that that will stop the Government spending taxpayers money in a vain attempt to preserve the living dead.

TARP Takes a Wrong Turn

Obama has the same dead-beats and loosers in his team as those who created the problem.
Fellow grifters with Paulson, to a man.

Paulson Pulls Back the TARP

The contrast with the Swedish full nationalisation of a bank the other day is instructive.
All the board was sacked and they will be lucky to escape prosecution, let alone collect bonuses.
Paulson is a grifter, and sadly Obama has surrounded himself with other grifters who created the mess in the first place and profited hugely by it.
I don't think these scam artists have got their head around the fact that if they avoid the rule of law, when the ponzi scheme crashes Judge Lynch is going to look for them and theirs.

U.S. Can Blame Wall Street - Who Should Everyone Else Blame?

The fall in other economies is not surprising when their biggest customer is going bankrupt and looks unlikely to be able to repay what it owes them.

Couldn't the New AIG Bailout Have Waited Until January?

That is not the most uncharitable explanation.
The alternative is that this is an on-going scam perpetrated to benefit insiders and drain money from the taxpayer and companies outside of the favoured circle.
That seems to me to be the correct explanation.

White-Hot Mad over AIG

Interestingly, just about all of these blogs except those by lackeys realise that a scam is being perpetrated, as did the public when they contacted their 'representatives' to try to stop the bail-out.
We were told by the Senators and Congressmen that opinion subsequently changed, but were given no evidence for this.
This scam is being carried out in broad daylight, with the connivance of the whole establishment.

In Search of a Less Insane U.S. Auto Industry

Yeah.
The same goes for the banks, and the Fed.
They are disfunctional and irreformable.

U.S. Is Playing Financial Dominoes

A fine analysis as usual.
I am a bit more doubtful though about the inevitability of inflation, as the deflationary forces are so powerful with the frantic deleveraging occurring.
My best guess would be ongoing deflation, no matter how hard central banks push on the string, followed perhaps by hyperinflation as all the money that has been printed hits in a tidal wave.

Great Expectations for Obama, But Not the Markets

Spot on analysis.
What is your take on the impact of the Chinese plans to spend another $300 billion a year themselves, leaving them with little budget surplus and presumably buying less US Treasury bonds?
I(t soundds bad for US funding and the dollar.

Uh Oh, There Goes the Bid in Treasuries

Exactly what I was wondering. Has anyone got any more precise analysis on the size of this impact on US treasuries?
The article is rather gnomic, if indeed a couple of sentences can be called an article.

Opportunity to Sell Into China's Illusory Stimulus Package

The package is said to include social stimulus programs too, which could presumably be front-loaded as they are an easy way of disbursing money.
An interesting question, I would have thought, is that if these funds are disbursed, taking China from a position of budget surplus to slight deficit, that would mean that around $300 billion a year would no longer be available to buy US Treasury bonds.
Any expert comment on the consequences of this?

The Long Case for Autos

Whatever may be the case in the US, in the UK car market there will be no rebound.
The banks have agreed to alter the headline rate, but the first thing they would order on returning to their offices is to neutralise it.
For the small proportion of loans that they have to make on those terms they will seek to alter the conditions, for instance with much higher deposits and stricter credit checks.
Most mortgages do not come under those terms anyway.
It just means a bit more window-dressing for the banks, the real cost to the customer of their loans will continue to rise, whilst the Banks take money from the Treasury at favourable rates and re-capitalise from the money they have lost in sub-prime, derivatives and developing countries.