Monday, October 27, 2008

White House Summit on Financial Markets and the World Economy...

New Nov. 6, Credit Swap Disclosure Obscures True Financial Risk(beware-the $596 trillion is actually total BIS global transactions turnover figure)
New Nov. 6, The Economic Mess and Financial Disaster that Obama Will Inherit, by Nouriel Roubini
New Nov. 3, The Bank Bailouts Are Very Well Intended, But Where Is All The Money Going To Come From?, by Edward Hugh
NEW Nov. 2, Two, two-trillionaires, by Brad Setser
NEW Oct. 31, The U.S. Will Experience a Severe Recession; thus a Large Fiscal Policy Stimulus is Necessary to Dampen the Severity of this Economic Contraction, by Nouriel Roubini
NEW Oct. 30, Fed Chairmen and Presidents: Roundtable with Roger Kubarych and Richard Whalen, by Chris Whalen Important
NEW Oct. 29, The Coming Deflation Scare
NEW Oct. 29, Debt-deflation and the future of the American Economy, by Karol Gellert___because she's important to understand.
NEW Oct. 29, The Gold-Dollar System: Conditions of equilibrium and the price of gold, by Milton Gilbert___because he's important to understand.
NEW Oct. 28, America must lead a rescue of emerging economies, by George Soros
Here's an important note to the world leaders, meeting in D.C. in November...

Dear Colleague:

Henry Liu and I have written a brief note (see below) to the Heads of State who will be meeting on November 15, 2008 to discuss the international implications of the current financial Crisis . Henry believes that he will be able to get the ASIA TIMES to print it on Monday, November 10, 2008 as a Headline piece. The Asia Times is a global on line publication with a web visibility of over 2,000,000 daily of highly educated readership world wide, beating,,, according to Presumably, other publications may also publish it in the EU. Perhaps among all our friends, we can recruit a public relation professional to help. Even Keynes needed Felix Frankfurter to introduce him to FDR.

Our note is as follows:
To be published Nov. 10...

(Palgrave/Macmillan, London and New York, 2007) ISBN# 978-1-4039-9623-7 indicate

'Davidson convincingly shows how Keynes's radical assault on classical economic theory was undermined by mainstream interpreters anxious to make his doctrines politically acceptable. Keynes's own ‘general theory' is compellingly explained; its obfuscators attacked with Davidson's familiar panache.’ - Lord Skidelsky, author of John Maynard Keynes 1883-1946: Economist, Philosopher, Statesman author of the 3 volume biography of Keynes.

'This could be the best one-volume treatment of Keynes's economics since Keynes himself. Clear, logical and faithful, Paul Davidson introduces the real Keynes to a new generation. And do we ever need him.' - James K. Galbraith, The University of Texas at Austin and Levy Economic Institute

'Global imbalances, the unshackling of capital, the precarious state of modern capitalism: rarely has the world of economics been in more need of the thoughts of John Maynard Keynes. Although Keynes is no longer with us, this book is the next best thing. Paul Davidson is the leading expert on Keynes and Keynesianism and his book should be read by anybody who wants to understand the world as it is, rather than as the economic text books say it ought to be.' - Larry Elliott, Economics Editor, The Guardian

‘Paul Davidson's fascinating, encyclopaedic book captures the drama of the appearance of the General Theory, illuminates the controversies still surrounding it, and passionately defends Keynes's radical innovations in economic theory and policy. It is high time for economists and policymakers to go back to Keynes's own words, whose power Davidson so effectively articulates.’ - Peter L. Bernstein ,President of Peter L. Bernstein, Inc., and author of the best selling book Against the Gods: The Remarkable Story of Risk and the book Capital Ideas Evolving

Friday, October 03, 2008

Will The "Shadow Banking System" Collapse The Real Banking System...? BUSTED...!!!

Evaluating Toxic Assets – And Where Do We Go Next, by Paul Davidson
NEW Oct. 27,, Media's Missing Intelligent Economists...
NEW Oct. 13, The Entire Global Market Law System Is Broken___Throwing Good Money After Bad Law Makes No Sense…!
NEW Oct. 12, Is The World Mature Enough To Handle “Free Money Print” Governments…?, by L.A.Gillespie
NEW Oct. 11, A Crash Course In Economics, by Chris Martenson
NEW Oct. 10, Let's Take The Higher Road, by L.A.Gillespie
New Oct. 9, Alert: Nouriel Roubini: The world is at severe risk of a global systemic financial meltdown and a severe global depression.
New Oct. 8, Revisiting my February paper “The Risk of a Systemic Financial Meltdown: The 12 Steps to Financial Disaster”…And Some New Policy Recommendations to Avoid the Meltdown, by Nouriel Roubini
New Oct. 7, Radical Policy Steps Necessary to Avoid a Systemic Meltdown: Interview with the Council on Foreign Relations, by Nouriel Roubini
New Oct. 6, The Fed keeps on wasting time while the mother of all bank runs is underway, by Nouriel Roubini
Financial Crisis: Worst Yet To Come; Audio file, 1hr. 10min.

Answer___Economic in-efficiency. Here's my latest projection. Due to the fact the "Shadow Banking System" equals the size of the real banking system, and it's collapsing world-wide fast, the collapse will be exponential in true speed and damage, due to its true size, and the pressure it will put on real economies. This mess seems to be expanding far faster than I and other economists had any idea, just how fast isn't exact science, but looks bad, real bad. Automobile industry?___Down! How bad is it going to get?___Worse than we can even imagine, due to absolute political stupidity. More efficient cars?___Un-economical, plus political ineptitude. Just read Roubini's newest projections: Oct. 3, Financial and Corporate System is in Cardiac Arrest: The Risk of the Mother of All Bank Runs, by Nouriel Roubini It's rather complex, but really describes the global mess. He predicted this some three years ago, as did I some five years ago. I also predicted the 1997 crash, but at the time thought it would be severe enough to take out the entire system___It wasn't, but this one certainly looks big enough to take down the entire global system, as most all nation's are having banks and corporations fail, or on the verge of failing. Ireland already nationalized its entire nation's finances. England is on the verge. Both Russia and China's stock markets have lost 50% plus value. The only way out for the remaining nations, in the end, is absolute nationalization of the entire financial systems, until we can truly rebuild the new regulatory systems needed. Just realize, we can rebuild them, no matter how bad it gets. It's just the "political time" it will take___That's the real problem and question, as politicians haven't yet realized how severe our problem truly is...

We await the awakening of the politicians of all nations. How bad it'll have to get to wake them is anyone's guess...

Here's Roubini's quote from my macromouse post:
"The suggested policy actions are extreme and radical but the times and conditions in financial markets and the corporate sector are also extreme. Thus, to avoid another Great Depression radical and unorthodox policy action needs to be taken now both in the US and in other advanced economies as the credit crisis and liquidity crisis is now becoming virulent even in Europe and other advanced economies. This credit crisis is both a crisis of confidence and illiquidity and a crisis of credit and solvency. But while the insolvent institutions should go bust we have now reached a point where many financial institutions and now non financial firms may become insolvent because of pure illiquidity; and this would lead to an extremely severe economic contraction similar to an economic depression rather than a mild recession. At this point the US, the advanced economies (and now likely even some emerging market economies) will experience an ugly recession and an ugly financial and banking crisis regardless of what we do from now on. What radical policy action can only do is preventing what will now be an ugly and nasty two-year recession and financial crisis from turning into a systemic meltdown and a decade long economic depression. The financial and economic conditions are extreme; thus extreme policy action is needed now to save the global economy from an ugly depression."