eric haller's links.
“It’s fine to tell people about hope and change, but you have to have plenty of concrete, pragmatic ideas that bring hope and change to life.”
— Allies Ask Obama to Make ‘Hope’ More Specific - NYTimes.com
“Perhaps the biggest factor behind the recent 18% drop in the price of a barrel of crude is sinking North American demand. Federal Highway Administration data show the number of miles driven in the U.S. dropped from year-ago levels for the seventh straight month in May.”
— Lower oil prices: a mixed blessing - Aug. 4, 2008
“The first wave of Americans to default on their home mortgages appears to be cresting, but a second, far larger one is quickly building.”
— Housing Lenders Fear Bigger Wave of Loan Defaults - NYTimes.com
“Cheap oil, the lubricant of quick, inexpensive transportation links across the world, may not return anytime soon, upsetting the logic of diffuse global supply chains that treat geography as a footnote in the pursuit of lower wages. Rising concern about global warming, the reaction against lost jobs in rich countries, worries about food safety and security, and the collapse of world trade talks in Geneva last week also signal that political and environmental concerns may make the calculus of globalization far more complex.”
— Shipping Costs Start to Crimp Globalization - NYTimes.com
“Macro investors are torn between two views: We’re in something like the 1970s or we’re in something like the 1930s,” said Christopher Watling, head of London-based research firm Longview Economics, referring to the two worst periods of economic pain in the last century.”
— Bloomberg.com: Exclusive
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But if the newfound caution of American banks is prudent in the long run, the immediate impact is amplifying the troubles with the economy. The Federal Reserve has been lowering interest rates aggressively to make money flow more loosely and to spur economic activity.

The financial system is not going along: As banks hold on to their dollars, mortgage rates are climbing. So are borrowing costs for corporations.

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— Worried Banks Sharply Reduce Business Loans - NYTimes.com
“Oil prices fell harder than they have in 17 years Tuesday, as fears that record fuel prices are spreading broad economic pain exacerbated the third big sell-off in just over a week.”
— Oil prices plummet over $6 amid economic fears: Financial News - Yahoo! Finance
“Q: How can I make sure my money is safe? A: All deposit accounts worth $100,000 and less are automatically insured by the FDIC. Many retirement accounts, such as IRAs and 401(k)s, are insured to $250,000 per person. But since it’s a person’s aggregate deposits, and not their individual accounts, that are insured, any amounts over $100,000 deposited at any one bank are not covered.”
— What if my bank fails? Some questions and answers
“Second, the housing bubble was immense; see the figure above, taken from the always excellent Calculated Risk. Fannie and Freddie only guaranteed conforming loans — loans that weren’t that big, didn’t have exotic financial features, and required a substantial downpayment. But so what? If real prices of houses in places like LA return to historical norms — and there’s no reason to think they won’t — many, many borrowers with conforming loans will end up with big negative equity anyway, and this in turn will produce a lot of defaults. This crisis is a long way from being over.”
— Fannie, Freddie, Sweden, Japan - Paul Krugman - Op-Ed Columnist - New York Times Blog
“FHA loans are bundled into mortgage-backed securities by the Government National Mortgage Association. Ginnie Mae mortgages, unlike those securitized by Fannie Mae and Freddie Mac, carry the full faith and credit of the U.S. government. So, while fears about the capital adequacy of Fannie Mae and Freddie Mac are dominating the marketplace, the expansion of FHA, either through administration diktat (FHASecure) or congressional legislation, poses a direct risk to us, the taxpayers.”
— Bloomberg.com: Opinion
“All over the word, slowly but surely, the state is becoming exposed to the debts and liabilities of the finance system. We’ve seen it here with Northern Rock - and with the Bank of England’s special liquidity scheme, and with the expanded deposit guarantee. The words “too big to fail” - once uttered as a joke, about a theoretical situation in the dining rooms of the investment banking world - have now been elevated into a philosophy. The strange thing is it’s being done on the watch of governments committed to removing the state from the economy. It is being done, in other words, in defiance of the official ideology of governments, regulators, banks, business schools, accountancy firms, TV pundits, Nobel prizewinners and nearly every think tank on earth.”
— Grasping Reality with Both Hands: The Semi-Daily Journal Economist Brad DeLong
“U.S. banking regulators swooped in to seize mortgage lender IndyMac Bancorp Inc (IMB.N) on Friday after withdrawals by panicked depositors led to the third-largest banking failure in U.S. history.”
— IndyMac seized as financial troubles spread - Yahoo! News
“To put that in perspective, had you invested $10,000 on inauguration day in an index fund that tracked the DJIA, it would be worth $8,568 today in inflation-adjusted 2001 dollars, compared to only $8,175 had you simply stuffed that money in a mattress. What with no bottom in sight to the housing, banking, automotive and other industries, and one of the largest bank failures in US history making headlines yesterday, that mattress is beginning to look like a pretty savvy investment. Our Republican administration on the other hand… not so much.”
— Better than Hoover a mattress
“Even in a world of six-figure salaries, bankers report an atmosphere of unhappiness. Fifty-eight percent of people working in banking and finance say they have seen someone cry as a result of stress at work, according to an nfpSynergy report for the Samaritans, a confidential help line that fields more than 13,000 calls daily, 20 percent from suicidal people. The industry was recently ranked last in the City & Guilds Happiness Index, based on a survey of 2,000 people in 20 professions. Beauty therapists were first.”
— Bloomberg.com: Exclusive
“Congress ought to be embarrassed” for years of delays in passing legislation aimed at strengthening regulation of the two companies, Snow, now chairman of New York-based buyout fund Cerberus Capital Management LP, said in a telephone interview. He said he suggested when in office that “the business model they were using was really the model of a hedge fund.’”
— Bloomberg.com: Worldwide