The September 2008 colapse of Lehman Bros. was the percipaticing event which channged a credit crunch to a panic. The examiner apointed by the bancrupcy court has produced a 2200 page report about what went wrong. The whole report is
here. Summaries and links to analysis after the jump.
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posted by shothotbot
on Mar 13, 2010 -
31 comments
In 2010,
Obama will have a miserable year,
NATO may lose in Afghanistan,
the UK gets a regime change,
China needs to chill,
India's factories will overtake its farms,
Europe risks becoming an irrelevant museum,
the stimulus will need an exit strategy,
the G20 will see a challenge from the "G2",
African football will
unite Korea,
conflict over natural resources will grow,
Sarkozy will be unloved and unrivalled,
the kids will come together to solve the world's problems (because their elders are unable),
technology will grow ever more ubiquitous,
we'll all charge our phones via USB,
MBAs will be uncool,
the Space Shuttle will be put to rest, and
Somalia will be the worst country in the world. And so
the Tens begin.
The Economist: The World in 2010.
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posted by goodnewsfortheinsane
on Nov 14, 2009 -
60 comments
Synthetic CDO's are complex little known financial instruments (insurance contracts) that are on the brink of triggering "the most colossal rights issue in the history of the world, all at once .. mandatory." If, out of a list of several hundred major companies,
any nine go bankrupt, the CDO's are in default, which would mean a mass transfer of cash (real money) from unsuspecting investors around the world goes into the banking system. How much? Nobody knows, but it’s many trillions. Banks will be flush with cash, perhaps ending the credit crisis, while many investors (individuals, charities, municipalities) will be wiped out. Alternatively, the triggering of default on the trillions of synthetic CDOs could be a disaster that tips the world from recession into depression. Nobody knows, but it won’t be a small event. Thus far
the count is six: three Icelandic banks, Countrywide, Lehman and Bear Stearns.
posted by stbalbach
on Dec 1, 2008 -
49 comments
In 2009,
a remarkably gifted politician, confronting a remarkably difficult set of challenges, will
have to learn to say "No we can't",
Guantánamo will prove a moral minefield,
economic recovery will be invisible to the naked eye,
governments must prepare for the day they stop financial guarantees,
we will judge our commitment to sustainability,
scientists should research the causes of religion,
we will all be potential online paparazzi,
English will have more words than any other language (but it's meaningless),
Afghanistan will see a surge of Western (read: American) troops,
Iran will continue its nuclear quest while
diplomacy lies in shambles,
the sea floor is the new frontier,
we should rethink aging,
(non-)voters will continue to thwart the European project --
but cheap travel will continue to buoy it --
though it has some unfinished business to attend to, and
a Nordic defence bond will blossom.
The Economist: The World in 2009.
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posted by goodnewsfortheinsane
on Nov 27, 2008 -
31 comments
Phil Gramm is unrepentent. "Mr. Gramm said the problem of predatory loans was not of the banks’ making. Instead, he faulted “predatory borrowers".
"Mr. Gramm, ever the economics professor, disputes his critics’ analysis of the causes of the upheaval. He asserts that swaps, by enabling companies to insure themselves against defaults, have diminished, not increased, the effects of the declining housing markets."
“This is part of this myth of deregulation,” he said in the interview. “By and large, credit-default swaps have distributed the risks. They didn’t create it. The only reason people have focused on them is that some politicians don’t know a credit-default swap from a turnip.”
posted by Xurando
on Nov 17, 2008 -
69 comments
"In the limit of an infinite economy, the number of initial downgrades is Poisson distributed. This captures the idea that the shock initially affects only a small number of firms.
Nonetheless, the distribution of the total number of defaults has slowly decaying tails ... A firm might well be able to absorb its shock, but it might not be able to absorb both the shock and the resulting deterioration in the average rating. The initial downgrades may thus trigger additional defaults that, in turn, further deteriorate the average rating, and so on. In
a large economy, this cascade can be described by a branching process." Ulrich Horst, Journal of Economic Behavior & Organization, 2007. (
Internet supplement!)
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posted by geoff.
on Sep 30, 2008 -
8 comments
America's for sale. Just ask Treasury Secretary Henry Paulson. With the U.S. economy in shambles, Paulson just spent four days touring the Middle East, hat in hand, looking for investors to bail us out. Specifically, on Monday, Paulson met with heads of the Abu Dhabi Investment Authority, the world's largest "sovereign wealth fund" with roughly $875 billion in assets, and encouraged them to buy American businesses.
Mortgaging America by Eric J. Weiner (LA Times Op Ed)
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posted by ornate insect
on Jun 5, 2008 -
42 comments
