Friday, September 26, 2008
Wednesday, September 24, 2008
You can slice the numbers a lot of different ways. My calculations, which assume 50% impairment on subprime loans, suggest it is possible, all in, for this portfolio to generate between $1 trillion and $2.2 trillion -- the greatest trade ever. Every hedge-fund manager will be jealous. Mr. Buffett is buying a small piece of the trade via his Goldman Sachs investment.
Over 10 years this could change the budget scenario in D.C., which can also strengthen the dollar. The next president gets a heck of a windfall. In the spirit of Secretary of State William Seward's purchase of Alaska for $7 million in 1867, this week may be remembered as Paulson's Folly.
"The financial markets are in quite fragile condition, and I think absent a plan they will get worse," Mr. Bernanke said.
Ominously, he added, "I believe if the credit markets are not functioning, that jobs will be lost, that our credit rate will rise, more houses will be foreclosed upon, GDP will contract, that the economy will just not be able to recover in a normal, healthy
GDP is a measure of growth, and a decline correlates with a recession.
No, actually GDP is a measure of, well, Gross Domestic Product. GDP growth would be a measure of growth. A decline in GDP doesn't just correlate with a recession, it is the definition of a recession.
Tuesday, September 23, 2008
Joe Biden’s denunciation of his own campaign’s ad to Katie Couric got so much attention last night that another odd note in the interview slipped by.
He was speaking about the role of the White House in a financial crisis.
“When the stock market crashed, Franklin Roosevelt got on the television and didn’t just talk about the princes of greed,” Biden told Couric.
“He said, ‘Look, here’s what happened.’”