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Title: Fullbown Panic
Source:
The Clusterfuck Nation Chronicle
URL Source: http://www.kunstler.com/
Published: Jan 21, 2008
Author: James Howard Kunstler
Post Date: 2008-01-21 14:29:46 by boonie rat
Keywords: None
Views: 379
Comments: 33
The Clusterfuck Nation Chronicle: Commentary on the Flux of Events ~ Published every Monday, est. 2001 January 21, 2008 Fullbown Panic Knees knocked last week from sea to shining sea as the shape-shifting monster of economic reality cut a swathe of destruction through the markets and financial ranks. The exact nature of this giant beast still remained largely concealed in a fog of accounting gambits, policy blusters, and reporting dodges, but a few intrepid scouts who glimpsed the behemoth up close said it looked like Godzilla with Herbert Hoover's face. George W. Bush, tried to appease the beast by offering each American adult the dollar equivalent of half a month's mortgage payment -- with the exhortation to drive forthwith to the nearest WalMart and blow it on salad shooters and plasma TV's -- but Hooverzilla just laughed at the offering and pounded the equity markets further into the dust of loss, while the "bank-like" guardians of wealth lay in the drainage ditches bleeding from their ears and eyes. My favorite moment was seeing Treasury Secretary Paulson and one of his fellow shaved-head deputies at a press conference rostrum frantically trying to calm the news media rabble like a couple of extraplanetary high priests from a Star Trek episode -- the batteries having run down in their laser wands, and their incantations ("liquidity! liquidity!) veering into mystifying glossolalia. I resort to such admitted extreme hyperbole because it may be the only language that an infotainment-drunk society can still process in the face of an epochal calamity that will transform the lush terms of everyday life as we've known it into something like a bleak surrealist landscape in the manner of Tanguy. That crashing sound out there is the armature of confidence needed to support an economy based on faith that borrowed money will be paid back. It's as simple as that. (Doesn't seem so exciting now, does it?) The United States is so broke, its people at every level from the Federal Reserve on down don't know whether to shit or go blind. The homeowners cringing in the media rooms of their 5000-square-foot personal family resorts don't know how long they can stay put microwaving pepperoni hot pockets with the default clock ticking. The mortgage "servicers" don't know how they will persuade interested parties like, say, the Illinois State Cafeteria Workers' Pension Fund (holder of X-amount of mortgage-backed securities underwritten by, say, Merrill Lynch or Deutsche Bank) to foreclose on properties scattered everywhere from Key West to Bainbridge Island -- or if there is actually any legal mechanism known to man that would make it possible to "work out" the sliced-and-diced collateral. The millions of maxed-out credit card holders and the issuers of their plastic are stuck together paddling a leaky tub in a sea of troubles every bit as wide, deep, and polluted as the one the mortgage junkies and their enablers are sinking in. The developers of malls, office parks, and power centers are weeping into their filing cabinets as the harsh daylight of insolvency stops the orgy of "consumption" and the retail tenants pack up their unsellable goodies for the liquidators, and the rent checks stop arriving in the mail, and the notes on this mall and that mall enter the eerie realm of "non-performance." And, of course, there are the genius wonder boyz and Wall Street playerz whose algorithms and turpitudes underwrote the script of this horror show -- for all I know they'll end up laughing into sugary skull drinks on a beach in the Cayman Islands, or doing Chinese fire drills in federal prison (or simply ass-fucked on the granite countertops of their Tribecca aeries by mobs of angry, repossessed, swindled former American dreamers pouring into Manhattan from the tract house dormitories of New Jersey and Long Island). There's a lot to be concerned about out there. I don't mean to be too cute about it. But, as the master once said, nothing is funnier than unhappiness. A whole closet full of "other shoes" is now waiting to be dropped. Surely the biggest clodhoppers in the closet belong to the hedge funds, representing trillions and trillions of dollar-denominated "positions" which, however hallucinatory, had previously yielded enough real "money" year-by-year to keep all the realtors and Humvee dealers in the Hamptons goose-stepping to Goldman Sachs's drumbeat. These "positions" can't help now from moving into counterparty crisis territory, especially as the bond insurers such as MBIA and Ambac go up in a vapor, and if that happens the damage could be so colossal globally that Stephen Hawking might have to be brought in to run the Federal Reserve. This is going to be a rough week. Fastening your seat belts may not be enough for this ride. Better superglue yourselves to the floorboards and pray for God's mercy.
Poster Comment: Asian and European markets dropping like rocks today.The U.K. benchmark FTSE-100 dropped 4.7 percent, France's CAC-40 Index plunged 5.9 percent, Germany's blue-chip DAX 30 slumped 6.74 percent, Japan's benchmark Nikkei 225 index slid 3.9 percent, China's Shanghai Composite index plunged 5.1 percent, India's benchmark Sensex index fell 1,353 points, or 7.4 percent — its second-biggest percentage drop ever. Boonie Rat MACV SOCOM, PhuBai/Hue '65-'66
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#1. To: All (#0)
By Sarah Thompson Jan. 21 (Bloomberg) -- Stocks tumbled from Hong Kong to Germany and Brazil and U.S. futures posted their steepest drop since 2001 on mounting speculation the world economy is slowing and company defaults will rise. The MSCI World Index slumped the most since 2002, while Europe's Dow Jones Stoxx 600 Index sank into a bear market as Allianz SE and BNP Paribas SA slid. Hong Kong's Hang Seng Index had its biggest drop in six years after BNP Paribas said Bank of China Ltd. may write down overseas securities by $4.8 billion because of losses from U.S. subprime mortgages. Citigroup Inc. retreated in Frankfurt. The MSCI World slipped 3 percent to 1,394.23 at 1:15 p.m. in New York, extending its decline from an Oct. 31 record to 17 percent. India's Sensitive Index lost the most since 2004, while Germany's DAX had its biggest loss since 2001. Futures on the Standard & Poor's 500 Index sank 4.5 percent. Trading in the U.S. is closed today for Martin Luther King Day. ``It's the worst I've ever seen,'' said Johan Stein, who helps manage the equivalent of about $14 billion at Nordea Asset Management in Stockholm. ``The financial system is in terrible shape, and no one knows where this will end.'' Today's declines follow the worst week for U.S. stocks in five years after President George W. Bush's $150 billion plan to revive the economy and expectations of interest-rate cuts failed to allay recession concerns. The risk of European companies defaulting soared to a record today on speculation credit-rating cuts at bond insurers including Ambac Financial Group Inc. may trigger forced asset sales. European Central Bank council member Nout Wellink said economic growth in the region may slow more than policy makers had expected. Market Crisis ``This is a stock-market crisis,'' said Alberto Roldan, head of research at Inverseguros SVB in Madrid. ``Investors believe that neither a government package nor a huge rate cut is going to help evade a recession in the U.S.'' White House spokesman Tony Fratto said in Washington today the government doesn't comment on daily market moves. ``We're confident that the global economy will continue to grow, and that the U.S. economy will return to stronger growth,'' Fratto said in an e-mailed message. The Stoxx 600 slid 5.7 percent, extending its drop from a 6 1/2-year high on June 1 to 23 percent. A decline of more than 20 percent is the common definition of a bear market. France's CAC 40 lost 6.8 percent. The U.K.'s FTSE 100 sank 5.5 percent, and Germany's DAX slid 7.2 percent. Volatility Climbs The VDAX-New Index, a benchmark gauge of European stock- market volatility, surged as much as 39 percent, the most since 2001. The measure of expected price swings for stocks is derived from prices paid for options on Germany's DAX. The MSCI Asia Pacific Index lost 3.8 percent. Australia's S&P/ASX 200 Index slumped for an 11th day. Hong Kong's Hang Seng Index lost 5.5 percent. Japan's Nikkei 225 Stock Average dropped 3.9 percent as the Finance Ministry cut its evaluation of five of 11 regional economies as housing investment fell and employment worsened. The MSCI Emerging Markets Index, a global benchmark, sank 5.8 percent, extending its retreat from an October record to 20 percent. At least 36 countries around the world have fallen into bear markets, according to Bloomberg data. Brazil's Bovespa index slid 7 percent, the most since September 2001. Russia's Micex Index declined 7.5 percent, the biggest drop since June 2006. Canada's Standard & Poor's/TSX Composite Index fell 4.2 percent. Allianz, Europe's biggest insurer, tumbled 9 percent to 120.15 euros. BNP Paribas, France's second-largest bank, sank 9.6 percent to 62.71 euros. ING Groep NV, the biggest Dutch investment bank, declined 10 percent to 20.99 euros. `Sharp Contraction' ``The market is finally catching on to the fact that a recession will lead to a sharp contraction in earnings,'' said Jane Coffey, head of equities at Royal London Asset Management, where she helps oversee about $11 billion. ``We need to see more aggressive changes to forecasts before investors become more positive about looking through the downturn.'' Swiss Reinsurance Co. decreased 10 percent to 68.7 Swiss francs. UBS AG cut its share-price estimate for the world's largest reinsurer to 80 francs from 88, citing the probability of more investment losses related to credit-market problems. ``We see on-going downside risk to earnings and stock performance until we have better visibility,'' London-based analysts including Ben Cohen wrote in a report to investors. Bank of China Bank of China, which has the largest holdings among Asian banks of U.S. subprime mortgages, slid 6.4 percent to HK$3.37. The bank may write down 17.5 billion yuan ($2.4 billion) for the fourth quarter of 2007, and an equal amount for this year, Dorris Chen, a Shanghai-based analyst at BNP Paribas wrote in a note on Jan. 18. Commonwealth Bank of Australia, the country's second- largest bank, dropped 4.6 percent to A$50.78. National Australia Bank Ltd., the nation's largest, declined 2.9 percent to A$35.20. Morgan Stanley raised its 2008 forecast for loan-loss charges at the country's major banks by 26 percent, analyst Richard Wiles wrote in a note today, citing a deteriorating global economy and ``the difficulty faced by some companies in refinancing maturing debt.'' Citigroup, the biggest U.S. bank by assets, dropped 5.4 percent to $23.13 in Frankfurt. JPMorgan Chase & Co., the second-largest U.S. bank by market value, slid 5.5 percent to $37.43, also in Frankfurt trading. The slump has made stocks cheap by historical standards. Europe's Stoxx 600 is valued at 10.8 times its companies' profits, the lowest since at least 2002, according to data compiled by Bloomberg. The 1,953-member MSCI World has a price- earnings ratio of 14.1, the cheapest since at least 1998. Rio Tinto Rio Tinto Group, the world's third-biggest mining company, dropped after BHP Billiton Ltd. failed to make a new offer. Rio, defending a hostile $108 billion takeover bid from rival mining company BHP, fell 10 percent to 4,228 pence. BHP may not make a new offer before the Feb. 6 deadline set by the U.K.'s Takeover Panel, the London-based Times newspaper reported. The BHP board has not met to discuss a new bid, the newspaper said, after its initial three-for-one all share offer in November was rejected. Samantha Evans, a BHP spokeswoman in Melbourne, declined to comment. Rio spokeswoman Amanda Buckley also declined to comment. To contact the reporter on this story: Sarah Thompson in London at sthompson17@bloomberg.net . Last Updated: January 21, 2008 13:19 EST On July 26, 1920, H.L. Mencken wrote " . . . all the odds are on the man who is, intrinsically, the most devious and mediocre — the man who can most easily (and) adeptly disperse the notion that his mind is a virtual vacuum. The presidency tends, year by year, to go to such men. As democracy is perfected, the office represents, more closely, the inner soul of the people. We move toward a lofty ideal. On some great and glorious day, the plain folks of the land will reach their heart's desire at last, and the White House will be adorned by a downright moron." -
Tomorrow - CNBC, 9:30 EST - be there or be square! GO BEARS!
Thanks for this article (great wordsmith) and the linkage.
Join the Ron Paul Revolution Title: World markets plunge on U.S. fears
North/Latin America Futures http://www.bloomberg.com/markets/stocks/futures.html
Never swear "allegiance" to anything other than the 'right to change your mind'!
Black Monday as biggest FTSE crash since 9/11 wipes off nearly £60bn in shares
China is selling off! Red Alert Stock Market could Crash Soon!
Maybe that's where the $60B went.
The Ron Paul r3VOLution hasn't even begun to fight.
How do you make your writing colored? Like the red above. And do you know how to make the font larger as well?
The Ron Paul r3VOLution hasn't even begun to fight.
The news of China selling off brings a whole new meaning to the concept of "Red Alert", don't it?
Stocks Plummet in Germany, Hong Kong and India in Global Rout
#2. To: boonie rat (#0)
(Edited)
#3. To: boonie rat (#0)
This is going to be a rough week. Fastening your seat belts may not be enough for this ride. Better superglue yourselves to the floorboards and pray for God's mercy.
Freedom*Peace*Prosperity
#4. To: boonie rat (#1)
#5. To: boonie rat (#0)
(Edited)
#6. To: lodwick (#3)
#7. To: lodwick (#3)
#8. To: TwentyTwelve (#7)
Wall St execs collect $US33b bonuses
#9. To: TwentyTwelve (#7)
Emergency Action Required Immediately To Prevent Public From Joining The Panic Tomorrow
#10. To: TwentyTwelve (#7)
China is selling off! Red Alert Stock Market could Crash Soon!
 | Gold and silver are REAL money, paper is but a promise. |
#11. To: Elliott Jackalope (#10)
Tomorrow is Black Tuesday, I fear. I thought it would happen last friday, the 18th..
#12. To: boonie rat (#0)
Funny, the only breaking news on google is "Asian Markets Whomped".
The Ron Paul r3VOLution hasn't even begun to fight.
#13. To: angle (#12)
Plunge protection?
#14. To: buckeye (#13)
Doesn't look like they're doing too well in the European Stock Market, but they are driving down the price of gold.
Plunge protection?
The Ron Paul r3VOLution hasn't even begun to fight.
#15. To: buckeye (#13)
TSX plunges more than 600 points '"One hopes this is the cathartic sell-off that gives us a foundation to work back from," CIBC Wood Gundy managing director Dunnery Best told CBC News."' May be. I've read where the downside exposure of derivitives is in the trillions with a lot of "s".
www.cbc.ca/money/story/20.../21/worldstocklosses.html
The Ron Paul r3VOLution hasn't even begun to fight.
#16. To: angle, All (#15)
The Great Depression 1929-1932 Headlines: September 1929 “There is no cause to worry. The high tide of prosperity will continue.” - Andrew W. Mellon, Secretary of the Treasury. October 14, 1929 “Secretary Lamont and officials of the Commerce Department today denied rumors that a severe depression in business and industrial activity was impending, which had been based on a mistaken interpretation of a review of industrial and credit conditions issued earlier in the day by the Federal Reserve Board.” – New York Times October 29 1929 Stock market crash December 5, 1929 “The Government’s business is in sound condition.” – Andrew W. Mellon, Secretary of the Treasury December 28, 1929 “Maintenance of a general high level of business in the United States during December was reviewed today by Robert P. Lamont, Secretary of Commerce, as an indication that American industry had reached a point where a break in New York stock prices does not necessarily mean a national depression.” – Associated Press dispatch. January 13, 1930 “Reports to the Department of Commerce indicate that business is in a satisfactory condition, Secretary Lamont said today.” – News item. January 21, 1930 “Definite signs that business and industry have turned the corner from the temporary period of emergency that followed deflation of the speculative market were seen today by President Hoover. The President said the reports to the Cabinet showed the tide of employment had changed in the right direction.” – News dispatch from Washington. January 24, 1930 “Trade recovery now complete President told. Business survey conference reports industry has progressed by own power. No Stimulants Needed! Progress in all lines by the early spring forecast.” – New York Herald Tribune. March 8, 1930 “President Hoover predicted today that the worst effect of the crash upon unemployment will have been passed during the next sixty days.” – Washington dispatch. May 1, 1930 “While the crash only took place six months ago, I am convinced we have now passed the worst and with continued unity of effort we shall rapidly recover. There is one certainty of the future of a people of the resources, intelligence and character of the people of the United States – that is, prosperity.” – President Hoover June 29, 1930 “The worst is over without a doubt.” – James J. Davis, Secretary of Labor. August 29, 1930 “American labor may now look to the future with confidence.” – James J. Davis, Secretary of Labor. September 12, 1930 “We have hit bottom and are on the upswing.” – James J. Davis, Secretary of Labor. October 16, 1930 “Looking to the future I see in the further acceleration of science continuous jobs for our workers. Science will cure unemployment.” – Charles M. Schwab. October 20, 1930 “President Hoover today designated Robert W. Lamont, Secretary of Commerce, as chairman of the President’s special committee on unemployment.” – Washington dispatch. October 21, 1930 “President Hoover has summoned Colonel Arthur Woods to help place 2,500,000 persons back to work this winter.” – Washington dispatch. November 1930 “I see no reason why 1931 should not be an extremely good year.” – Alfred P. Sloan, Jr., General Motors Co. January 20, 1931 “The country is not in good condition.” – Calvin Coolidge. June 9, 1931 “The depression has ended.” – Dr. Julius Klein, Assistant Secretary of Commerce. August 12, 1931 “Henry Ford has shut down his Detroit automobile factories almost completely. At least 75,000 men have been thrown out of work.” – The Nation.
#17. To: Cynicom (#16)
Nice wrap of why we should trust the goob or their lackeys, the press.
Join the Ron Paul Revolution
Freedom*Peace*Prosperity
#18. To: duckhunter (#17)
Pinging this for you - James Kunstler's latest.
#19. To: Dukie (#18)
Many thanks. I definitely enjoy his writing.
Pinging this for you - James Kunstler's latest.
#20. To: angle, TwentyTwelve, all (#9)
If that doesn't work for you or you still need help, let me know and I'll give you more.
How do you make your writing colored? Like the red above. And do you know how to make the font larger as well?
“The individual is handicapped by coming face-to-face with a conspiracy
so monstrous he cannot believe it exists.” ~ J. Edgar Hoover 
#21. To: angle, TwentyTwelve, all (#20)
“The individual is handicapped by coming face-to-face with a conspiracy
so monstrous he cannot believe it exists.” ~ J. Edgar Hoover
#22. To: wudidiz (#20)
If that doesn't work for you or you still need help, let me know and I'll give you more. Thanks for the link.
HTML TRICKS
#23. To: TwentyTwelve, angle, all (#22)
“The individual is handicapped by coming face-to-face with a conspiracy
so monstrous he cannot believe it exists.” ~ J. Edgar Hoover
#24. To: All (#23)
Boot-licker camp Hahaha Sorry. I'm sure they're very nice people.
“The individual is handicapped by coming face-to-face with a conspiracy
so monstrous he cannot believe it exists.” ~ J. Edgar Hoover
#25. To: Cynicom (#16)
Thank you for this list. That one kinda makes your heart give a lurch.
August 12, 1931 “Henry Ford has shut down his Detroit automobile factories almost completely. At least 75,000 men have been thrown out of work.” – The Nation.
#26. To: wudidiz (#24)
For people with no souls (or brains for that matter).
I'm sure they're very nice people.
#27. To: angle (#25)
When you have time there is a long list of newspaper headings afore and during the "great depression" that try to con the American people into believing that the country was in good shape. One thing you will seldom hear about is that after six years of FDR there were more unemployed in 1939 than when he took office in 1933. Buried in the statistics one comes to realize that there was no REAL intent to end the depression in a short time. War was wanted, had been predicted by many, and war we got with millions of American males available.
#28. To: Cynicom (#27)
Yes. And isn't that the intent today?
no REAL intent to end the depression in a short time. War was wanted, had been predicted by many, and war we got with millions of American males available.
#29. To: Cynicom, angle (#27)
Headlines Of The Great Stock Market Crash Of 1929
freedom4um.com/cgi-bin/readart.cgi?ArtNum=70823&Disp
Ron Paul for President - Join a Ron Paul Meetup group today! The Revolution will not be televised!
I would rather be exposed to the inconveniences attending too much liberty than to those attending too small a degree of it.-T Jefferson
#30. To: robin (#29)
Thanks, Dow down -229 right now.
#31. To: Dukie (#18)
Many thanks. Good read.
#32. To: wudidiz (#20)
HTML Cheatsheet Hey, thanks for the link! Great! Emphasizes a word (with italic or bold) Emphasizes a word (with italic or bold) HAH!
#33. To: HOUNDDAWG (#32)
thanks for the link! Damn Skippy, Comrade! 
“The individual is handicapped by coming face-to-face with a conspiracy so monstrous he cannot believe it exists.” ~ J. Edgar Hoover
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