Monday links roundup

“Back in the early stages of the financial crisis, wags joked that our trade with China had turned out to be fair and balanced after all: They sold us poison toys and tainted seafood; we sold them fraudulent securities.”

Krugman: China’s dollar trap

“[W]hat sparks bubbles? Why does one large asset bubble — like our dot-com bubble — do no damage to the financial system while another one leads to its collapse? Key characteristics of housing markets — momentum trading, liquidity, price-tier movements, and high-margin purchases — combine to provide a fairly complete, simple description of the housing bubble collapse, and how it engulfed the financial system and then the wider economy.”

WSJ: From bubble to depression?

NYT: Nifty graphic illustrating key Wall Street players’ political donations
FT: Boston Globe’s value estimated at $20 million; NYT threatens to close paper
Martin Wolf: Why G20 leaders will fail to deal with the big challenge
NYT: Rising powers challenge U.S. on IMF role
Video: William Greider, William K. Black on Bill Moyers Journal
WSJ Real-Time Economics blog: Economists react to March unemployment numbers
Bloomberg: Chuck Schumer, king of the stooges
Bloomberg: Geithner may oust executives at banks needing ‘exceptional’ aid

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Comments (5)

  1. Submitted by Glenn Mesaros on 04/06/2009 - 08:59 am.

    According to the Washington Post, the Obama administration believes it can bypass the regulations established by Congress by setting up “special purpose entities” that act as middlemen, channeling the bailout funds to the firms, rather than dispensing the aid directly. The administration has decided that congressional restrictions, which would require recipients to turn over ownership stakes to the government as well as curb executive pay, should not apply in at least 3 of 5 initiatives funded by the bailout.

    David Zaring, a former Department of Justice attorney, said “They are basically trying to launder the money to avoid complying with the plain language of the law.”

    When confronted on CBS’ Face the Nation on Sunday by host Bob Schieffer, U.S. Treasury Secretary Timothy Geithner lied that the Treasury was not trying to bypass the Congress: “No, that’s not true.” But when David Axelrod was asked the same question by Fox News Sunday host Chris Wallace, he admitted that the administration doesn’t “want to create disincentives and undermine the program…. we need these financial companies to help….”

  2. Submitted by Susan Oehler Seltzer on 04/06/2009 - 12:14 pm.

    Thank you, Steve, for the excellent summary links.

    This interview with Mr. Black on April 3, 2009 on Bill Moyers Journal is a great interview to include in your Links. It should be required reading for all our representatives in Washington.

    “April 3, 2009

    The financial industry brought the economy to its knees, but how did they get away with it? With the nation wondering how to hold the bankers accountable, Bill Moyers sits down with William K. Black, the former senior regulator who cracked down on banks during the savings and loan crisis of the 1980s. Black offers his analysis of what went wrong and his critique of the bailout.”

  3. Submitted by Annalise Cudahy on 04/06/2009 - 02:17 pm.

    I don’t think any list is remotely complete without something from John Mauldin. The ones you list are rather pale in comparison.

    Here is the best summary, actually from Paul McCulley of PIMCO. It’s very practical and non-partisan, but explains what is going on in both the economic and political worlds – and why they don’t mix all that well.

  4. Submitted by Annalise Cudahy on 04/06/2009 - 02:28 pm.

    While the WSJ article is generally excellent, a better case can be made that the Tech Bubble never really did pop, or at least did not completely pop. The money that was lost was isolated in the stock market, generally speaking, and money that had been removed by selling off at the height of the bubble was safe. Much of that was rolled into real estate investment, seeking a safer return.

    This process is similar to what we saw in the 1920s when the automotive industry, following a great boom in the early to mid 1920s, leveled off. Walter P Chrysler, among many, started to invest in mid-town Manhattan and other places – the Rockefellers of Standard Oil did as well.

    Our Tech Bubble is directly related the overbuilding of condos in Miami, Los Angeles, and so on that was the real driving fuel for the Housing Bubble. The two are very closely related, much as they were in the 1920s.

    A bubble does not do damage when it is confined to one small part of the financial world. To genuinely incinerate money it has to have induced mania in all aspects of finance. That takes time, much as a really good con requires a a deep sense of trust. The Tech Bubble wasn’t the real sting, it was the hook. We were both the mark and the con at the same time.

  5. Submitted by dan buechler on 04/06/2009 - 03:54 pm.

    Good work all around thanks guys!

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