I've been digging around all day, reading up on Dubai and frankly there is a lot of speculation, opinion and it's real short on numbers in terms of actual debt and what's going to happen in terms of a sovereign default.
CDSes jumped but still nowhere near last years 2008 levels.
So, if anybody else wants to dig up and write up some original analysis or finds someone else did so and it's well cited, credible, please let us know.
another point, watch this week's FMN, it's astounding how Congress says they cannot pass anything because lobbyists own D.C. Well, if lobbyists own D.C. why don't they do something about that? I mean it's circular excuses!
What a joke! Geithner and Summers didn't want to cause any pain on Wall Street and mortgage industry. Now, he is trying to cover his ass for failing to help those who really needed the help - home owners.
I'll keep repeating it - we needed debt forgiveness.
Regarding Dubai, we, the public, will never how bad the situation truly is. LTCM happened very quietly culminating over a weekend rescue plan. The cause for LTCM's collapse of the economic problems in Russia.
The big issue is interconnectivity again amongst the 'too big to fail' institutions. LTCM was rescued because of all the counter parties were 'too big to fail' institutions. Same for AIG - its counter parties were 'too big to fail'.
I wouldn't be surprised if Fed, Treasury and Bank of England are communicating very closely to try assess the damage from this. Remember it's not necessary Dubai that is the main concern but its more like how deep is Royal Bank of Scotland or HSBC involved and if they are in trouble who is connected to RBS and so on and so on.
With globalization of finance it not who owns your toxic debt but who is connected to holder of your toxic debt.
Obviously you have some sort of "philosophy" that isn't based in statistics and economic reality. The reality of "choice" is truly bogus. One has a "choice" to buy food, to buy gas, to buy clothing? One has a "choice" to obtain shelter and for some reason those who are not millionaires should not own property?
EP is an economics blog where we do our best to look at the economic reality.
Sticking to some sort of philosophy that clearly isn't working is absurd and not common sense.
Trying to blame most of working America is when it becomes truly obvious, from state budget deficits themselves things are seriously not working is beyond the pale.
Then there is the effect on the $123 billion in debt held by foreign banks. $50 billion is held by UK banks, notably HSBC, Standard Chartered, Barclays, and RBS, but there is plenty to go around. BNP Paribas holds about $1.7 billion, Citigroup $1.9 billion, and Goldman Sachs a mere $600 million. Any bets on how fast this ends up on the books of US and UK taxpayers?
Economist Brad Delong mentioned Austria 1931 almost immediately on his blog as well. I considered reposting an article I wrote a while ago on contagion.
Citigroup is already singled out by COP, overview and report here, as to "what the hell is going on" in so many words with their real health. It was claimed they passed the latest stress test.
Citigroup could lose still $34 Billion, so I imagine Geithner will come immediately to Citigroup and Dubai's rescue. ;)
What I would like to know at this point is does Dubai imply high probability of sovereign default. Then, I'm wondering about comparisons to Russia, Thailand (another real estate bubble). But when those events happened the world was not so globalized and not nearly as vulnerable.
I like your blog, maybe you will consider creating an account and joining us in discussion!
Check out that rock drop and recovery in a matter of hours. Somebody who played that right just made a butt load of money.
It doesn't quite make sense to me for Gold to drop through the floor considering the reasons why it's on fire...even with Dubai, but I've been fooled many times by markets.
The Dow was down 1.48% and NASDAQ down 1.73%. Oil down 2.45%.
Gold just 0.78%. So we might have just seen Gold decouple from oil.
You're ignoring the post of the post by trying to focus on income tax. This post is about state, local sales and property taxes, which are highly regressive. You are quoting income tax, straight wages instead of reading or acknowledging all taxes, which is the point of this post. It's about sales and property taxes, which are highly regressive.
Over on my blog, I commented this morning about how Citi and Goldman hold about $2.5 billion in UAE debt and how fast Bernanke and Geithner will start making noise about having to step in. And when this first blipped on my radar Wednesday, I thought, "Wow, Austria 1931."
The House Science Committee demanded to release the report, which finally under pressure some Republican voted with them and finally got a draft which was useless.
It was clearly a front to claim they were "doing something" but they were out to claim...with taxpayer money, it all was just fine.
Your government at work for the public interest (this was the Bush administration).
This article is presenting partial facts at best. As of 2010,
- Close to 52% of tax payers will have no federal tax liability.
- 80% of federal income tax is paid by top 20% tax payers. (of course, so is the wealth concentration)
The political class objective is to divide populace in all possible ways (rich vs. middle-class, corporate vs working class) and tax'em however they can. Did you wonder how many different taxes are there now? From taxes on your phone bill, cable bill to pay roll taxes, there are one too many.
Instead, the focus of we thoughtful citizen should be on what the political class is doing with all our rightful yearned money.
Per latest reports, Federal/state/local government combined is the biggest sector in the economy signaling a major challenge to our entire economy.
Besides defense, there is no one thing that government manages properly: social security? medicare?
At the current rate of deficits (result of both Democratic and Republican administrations), by 2015, the interest payments alone on deficit financing will be more than $700 billion a year.
Wanna share more $$$ of your hard earned money to political class?
That's affirmative. It was done by the Technology Administration within the Dept. of Commerce, a 200-page report costing the taxpayers $335,000, a study on the impact of offshoring on US high-tech jobs which we, the taxpayers, were only allowed to view a highly biased 12-page summary proclaiming little to no effect upon the American employment picture by the offshoring of American jobs.
This was brought to light by the economist Paul Craig Roberts some time back. Of course, with this "incredibly transparent Obama Administration" (sarcasm intended), no doubt Commerce Secretary Locke will take time from his busy schedule of signing all those waivers, exempting American multinationals from using fed stimulus funds to offshore further jobs, to address this issue and finally make this 200-page report public.
OK...just being facetious about it being made public.
I think Rome will burn before you see any kind of "fairness" extracted from the coddled ruling class. Ask me if I care. During the Reagan recession, I started high school homeless and living in my divorced mothers car with my brother and sister. I struggled my whole life. Now my wife, unemployed and unable to find work, and I, both college educated and facing our forties, have little after paying off student debt. Now we get the privilege of borrowing 100,000 from a crooked bank for a meager home and paying them 3x the value of the loan in usurious interest payments.(ROFL home ownership is the path to wealth) All the while the property tax payment is almost in parity with the mortgage payment. Then, apparently, all along I was supposed to be pouring all that extra cash I've been using to eat and drive to work into a 401k for retirement. Truer words have never been spoken with this quote:
Talks must be going on to develop a 99-year lease of these jewels for a navy base. I know Geroge W. Bush wouldn't let this kind of opportunity get away from him! Imagine what KBR could do with it -- $100 a scoop desserts!
Frank T.
Things must surely be under control. If Bernanke has some arcane speech to some club this weekend, I imagine he will announce that the Federal Reserve is establishing a new facility to buy these securities and expand the Fed balance sheet accordingly. He will probably say that he is confident the Dubai debt will be rated AAA by a rating agency somewhere.
Frank T.
I've been digging around all day, reading up on Dubai and frankly there is a lot of speculation, opinion and it's real short on numbers in terms of actual debt and what's going to happen in terms of a sovereign default.
CDSes jumped but still nowhere near last years 2008 levels.
So, if anybody else wants to dig up and write up some original analysis or finds someone else did so and it's well cited, credible, please let us know.
another point, watch this week's FMN, it's astounding how Congress says they cannot pass anything because lobbyists own D.C. Well, if lobbyists own D.C. why don't they do something about that? I mean it's circular excuses!
Bail out Dubai? Don't even f*cking think about it! Alan Grayson is watching, and so are we!
Frank T.
What a joke! Geithner and Summers didn't want to cause any pain on Wall Street and mortgage industry. Now, he is trying to cover his ass for failing to help those who really needed the help - home owners.
I'll keep repeating it - we needed debt forgiveness.
A day late and $75 billion short.
RebelCapitalist.com - Financial Information for the Rest of Us.
I believe was bailed out by "vested private interests", i.e. Wall Street.
Our first case of derivatives going "way out of bounds of their models" as well.
and this was the issue with the financial crisis. They had all sorts of interactive derivatives going, esp. AIGFP, and why it was such a domino.
Regarding Dubai, we, the public, will never how bad the situation truly is. LTCM happened very quietly culminating over a weekend rescue plan. The cause for LTCM's collapse of the economic problems in Russia.
The big issue is interconnectivity again amongst the 'too big to fail' institutions. LTCM was rescued because of all the counter parties were 'too big to fail' institutions. Same for AIG - its counter parties were 'too big to fail'.
I wouldn't be surprised if Fed, Treasury and Bank of England are communicating very closely to try assess the damage from this. Remember it's not necessary Dubai that is the main concern but its more like how deep is Royal Bank of Scotland or HSBC involved and if they are in trouble who is connected to RBS and so on and so on.
With globalization of finance it not who owns your toxic debt but who is connected to holder of your toxic debt.
Robert - it is a matter of contagion.
RebelCapitalist.com - Financial Information for the Rest of Us.
and have them pay for Citigroup's loss too.
Note there are a ton of CDSes associated with Dubai and it's very unclear what type and who is holding the bag.
BTW: Derivatives reform, which is probably the most critical of all financial reforms, is getting thrown under a bus last I checked.
Obviously you have some sort of "philosophy" that isn't based in statistics and economic reality. The reality of "choice" is truly bogus. One has a "choice" to buy food, to buy gas, to buy clothing? One has a "choice" to obtain shelter and for some reason those who are not millionaires should not own property?
EP is an economics blog where we do our best to look at the economic reality.
Sticking to some sort of philosophy that clearly isn't working is absurd and not common sense.
Trying to blame most of working America is when it becomes truly obvious, from state budget deficits themselves things are seriously not working is beyond the pale.
If they are holding $2.5 billion in Dubai obligations, this is hardly TBTF risk. Let them eat it -- take it out of next year's bonuses.
Frank T.
Folks, here is his post
Economist Brad Delong mentioned Austria 1931 almost immediately on his blog as well. I considered reposting an article I wrote a while ago on contagion.
Citigroup is already singled out by COP, overview and report here, as to "what the hell is going on" in so many words with their real health. It was claimed they passed the latest stress test.
Citigroup could lose still $34 Billion, so I imagine Geithner will come immediately to Citigroup and Dubai's rescue. ;)
What I would like to know at this point is does Dubai imply high probability of sovereign default. Then, I'm wondering about comparisons to Russia, Thailand (another real estate bubble). But when those events happened the world was not so globalized and not nearly as vulnerable.
I like your blog, maybe you will consider creating an account and joining us in discussion!
Yes, you have a choice..
- think of a piece meal solution or
- address the core problem
Kitco Live Gold Chart.
Check out that rock drop and recovery in a matter of hours. Somebody who played that right just made a butt load of money.
It doesn't quite make sense to me for Gold to drop through the floor considering the reasons why it's on fire...even with Dubai, but I've been fooled many times by markets.
The Dow was down 1.48% and NASDAQ down 1.73%. Oil down 2.45%.
Gold just 0.78%. So we might have just seen Gold decouple from oil.
You're ignoring the post of the post by trying to focus on income tax. This post is about state, local sales and property taxes, which are highly regressive. You are quoting income tax, straight wages instead of reading or acknowledging all taxes, which is the point of this post. It's about sales and property taxes, which are highly regressive.
Over on my blog, I commented this morning about how Citi and Goldman hold about $2.5 billion in UAE debt and how fast Bernanke and Geithner will start making noise about having to step in. And when this first blipped on my radar Wednesday, I thought, "Wow, Austria 1931."
The House Science Committee demanded to release the report, which finally under pressure some Republican voted with them and finally got a draft which was useless.
It was clearly a front to claim they were "doing something" but they were out to claim...with taxpayer money, it all was just fine.
Your government at work for the public interest (this was the Bush administration).
This article is presenting partial facts at best. As of 2010,
- Close to 52% of tax payers will have no federal tax liability.
- 80% of federal income tax is paid by top 20% tax payers. (of course, so is the wealth concentration)
The political class objective is to divide populace in all possible ways (rich vs. middle-class, corporate vs working class) and tax'em however they can. Did you wonder how many different taxes are there now? From taxes on your phone bill, cable bill to pay roll taxes, there are one too many.
Instead, the focus of we thoughtful citizen should be on what the political class is doing with all our rightful yearned money.
Per latest reports, Federal/state/local government combined is the biggest sector in the economy signaling a major challenge to our entire economy.
Besides defense, there is no one thing that government manages properly: social security? medicare?
At the current rate of deficits (result of both Democratic and Republican administrations), by 2015, the interest payments alone on deficit financing will be more than $700 billion a year.
Wanna share more $$$ of your hard earned money to political class?
How many other gut bombs are out there? Let's just hope Citigroup isn't exposed.
That's affirmative. It was done by the Technology Administration within the Dept. of Commerce, a 200-page report costing the taxpayers $335,000, a study on the impact of offshoring on US high-tech jobs which we, the taxpayers, were only allowed to view a highly biased 12-page summary proclaiming little to no effect upon the American employment picture by the offshoring of American jobs.
This was brought to light by the economist Paul Craig Roberts some time back. Of course, with this "incredibly transparent Obama Administration" (sarcasm intended), no doubt Commerce Secretary Locke will take time from his busy schedule of signing all those waivers, exempting American multinationals from using fed stimulus funds to offshore further jobs, to address this issue and finally make this 200-page report public.
OK...just being facetious about it being made public.
I think Rome will burn before you see any kind of "fairness" extracted from the coddled ruling class. Ask me if I care. During the Reagan recession, I started high school homeless and living in my divorced mothers car with my brother and sister. I struggled my whole life. Now my wife, unemployed and unable to find work, and I, both college educated and facing our forties, have little after paying off student debt. Now we get the privilege of borrowing 100,000 from a crooked bank for a meager home and paying them 3x the value of the loan in usurious interest payments.(ROFL home ownership is the path to wealth) All the while the property tax payment is almost in parity with the mortgage payment. Then, apparently, all along I was supposed to be pouring all that extra cash I've been using to eat and drive to work into a 401k for retirement. Truer words have never been spoken with this quote:
"Burn Baby Burn!!!"
Talks must be going on to develop a 99-year lease of these jewels for a navy base. I know Geroge W. Bush wouldn't let this kind of opportunity get away from him! Imagine what KBR could do with it -- $100 a scoop desserts!
Frank T.
Things must surely be under control. If Bernanke has some arcane speech to some club this weekend, I imagine he will announce that the Federal Reserve is establishing a new facility to buy these securities and expand the Fed balance sheet accordingly. He will probably say that he is confident the Dubai debt will be rated AAA by a rating agency somewhere.
Frank T.
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