Fire !
by Clay Bennett, Chattanooga Times Free press
Saturday, October 25, 2008 | 05:30 PM | Permalink
| Comments (18)
| TrackBack (0)
add to de.li.cious | 
digg this! | 
add to technorati | 
email this post
TrackBack
TrackBack URL for this entry:
http://www.typepad.com/services/trackback/6a00d8341c52a953ef010535b3cc0e970c
Listed below are links to weblogs that reference Fire !:
Comments
It certainly looks like the efficient market properly allocating resources to me. But, hey, my name is Paulson. Don't you just love that liquidity?
Posted by: AGG | Oct 23, 2008 4:44:27 PM
IMHO, there's a big investment thesis captured in this image.
We're likely to come through this with capacity intact in the bank business, but with diminished capacity elsewhere. The seeds of the next commodity boom are being sown now.
Posted by: Estragon | Oct 23, 2008 4:46:27 PM
Excellent cartoon. I love the additional play on "excess liquidity" into banks while "liquidity is drying up fast" in households elsewhere.
Posted by: rational | Oct 25, 2008 5:36:36 PM
The golden parachute is usefull after all:
http://www.alternet.org/images/managed/blogimage_img00195.jpg
Posted by: Rudy | Oct 25, 2008 6:09:11 PM
Dumb question: who will the banks lend to, if everything else burns to the ground?
Posted by: JD | Oct 25, 2008 6:11:07 PM
Anyone come across this link yet from Paul Kedrosky on his blog, Infectious Greed?
Bloomberg chart of Bank Writedowns and Credit Losses vs. Capital Raised -- Oct. 22.
http://ftalphaville.ft.com/blog/2008/10/23/17369/losing-control/
Posted by: John | Oct 25, 2008 6:13:34 PM
One good thing about this crisis is that I am seeing some savings at the gas pump. 50 cents drop per gallon in the last two weeks. Another dollar drop in price and I can start to deploy some extra cash where I choose for a change.
To "H" with a stimulus package. Gas prices at $1.50 a gallon is a better way.
Posted by: More Money | Oct 25, 2008 7:04:55 PM
BR thanks for the cartoons. I always get a kick out of them! Great stuff!
Posted by: nades | Oct 25, 2008 7:15:59 PM
Very wise words from Doug Noland:
Only today is it readily apparent what a mess the global pricing system had become. Think in terms of a net Trillion plus U.S. dollars inflating the world each year, of which a large part was recycled through Chinese and Asian purchases of U.S. securities (inflating domestic Credit systems and demand in the process). Think in terms of rapidly inflating economies with several billion consumers (Brazil, Russia, India, and China). Think in terms of the surge of inflation that forced thoughtful policymakers in economies such as Australia, New Zealand and elsewhere to significantly tighten monetary policy. Rising rates, however, only enticed more disruptive speculative finance flowing loosely from (low-yielding) Credit systems including the U.S., Japan, and Switzerland. Speculation could have been as simple as shorting a low-yielding security anyplace to finance a higher-returning asset anywhere. Or, why not structure a complex leveraged derivative transaction that, say, borrowed in a cheap currency (i.e. yen or swissy), played the upside of rising emerging equities markets, and at the same time had triggers to hedge underlying currency and/or market exposure. And the counterparty exposure for a lot hedges could be wrapped up in collateralized debt obligations (CDOs).
And later on he gives the money quote.
The notion that derivatives can be a reliable hedge has proven a fallacy.
One thing was missing in the cartoon; the bucket brigade of homeowners ignoring their houses and pouring their "water" into the source of the firemen's liquidity.
Posted by: AGG | Oct 25, 2008 7:21:31 PM
Moremoney - yes, it helps in the pocketbook, which matters most. Sadly, it doesn't seem to be helping. The recent declines in gas prices, I've read, are akin to a $125B stimulus package to the people. It has done nothing for the economy (of course, the economy would have been far worse without it).
The sad truth is that for many, it is too little too late. They are already too far into the hole with its usorious interest rates for it to make a meaningful difference. The things I'm seeing in NYC (a gaunt man in shorts with no shoes walking across 22nd Street shaking a tin cup, homeless people once again asleep on busses) make me cringe. This is the late 80s all over again, and we've only just begun.
Posted by: bk | Oct 25, 2008 7:55:18 PM
One thing was missing in the cartoon; the bucket brigade of homeowners ignoring their houses and pouring their "water" into the source of the firemen's liquidity.
Posted by: AGG | Oct 25, 2008 7:21:31 PM
yep, even the 'Fences' are on Fire.
~
who will the banks lend to, if everything else burns to the ground?
Posted by: JD | Oct 25, 2008 6:11:07 PM
JD what makes you think that 'banks' need to Lend?
~
And, I agree that Cartoon is Genius.
Posted by: Mark E Hoffer | Oct 25, 2008 8:01:10 PM
Sums up our current state of affairs based on "their" priorities nicely.
Posted by: Pat G. | Oct 25, 2008 9:04:03 PM
Is it just me or are others emailing Congress on a weekly basis on what I think they should do and why the system got here?
Posted by: John Borchers | Oct 25, 2008 9:12:01 PM
Is that what they mean by the 'FIRE Economy'?
Posted by: pmorrisonfl | Oct 25, 2008 9:15:25 PM
Perfect description, Barry.
Posted by: Movie Guy | Oct 25, 2008 9:44:47 PM
I just knew something "new" (to me at least, and probably to 99.99% of people). Did you guys know this: A Trading Strategy with Guaranteed No Loss (it does not involve zero-coupon bonds or notes/etc).
Why is it that they (the bankers on wall street) hide such things from us?
Hint: if you can figure it out on your own, it involves two trades one of which is an options trade.
If you cannot figure it out or simply should know more, head to the site below.
http://financialtraders.blogspot.com/2008/09/trading-strategy-with-guaranteed-no.html
Posted by: cactus | Oct 26, 2008 12:53:46 AM
Burning down houses is one way to get rid of the housing surplus.... :P
Posted by: J Lo | Oct 26, 2008 3:25:42 AM
A classic cartoon! Sums up the whole stinking mess. Thanks, Barry.
Posted by: tom a taxpayer | Oct 26, 2008 7:08:16 PM
