Dead Cat Splat

Some expect the market to drop, but bounce quickly as in 2000. Vince Foster says not, since this boomlet has been credit-fuelled.

His view: housing is woeful, emerging markets look as though they may be topping-out, the Ted Spread is signalling insolvency fears, the 10-year bond rate augurs slowing growth; so cash is king.

Little boxes, revisited

I've previously suggested that you don't need to be too technical, as long as you focus on the reward systems (the cui bono?). Here, Michael Panzner quotes and discusses an article by Nat Worden on the failure of ratings agencies in the subprime debacle.

I think it's in "Jane Eyre": a teacher who wishes to instil piety into a little boy, asks him whether he'd rather have a biscuit or a blessing. When he answers, a blessing, he gets two biscuits.

When recession empties the the biscuit barrel, maybe we'll get authentic leadership.

UPDATE

My beloved recalled it better, and so I've found the quote on the Net:

...I have a little boy, younger than you, who knows six Psalms by heart; and when you ask him which he would rather have, a ginger-bread nut to eat, or a verse of a Psalm to learn, he says: "Oh, the verse of a Psalm! Angels sing Psalms," says he. "I wish to be an angel here below." He then gets two nuts in recompense for his infant piety.’

We need recession, to avert total disaster

In a sock-to-the-jaw article that I think everyone should read, Nadeem Walayat shows the political-economic forces tides beating against our cliffs and undermining our liberty and prosperity. Like me, he sees sovereign wealth funds as part of this process.

It seems that we must wish our own countries a spell of hard times, in order to stimulate the changes that will defend us from permanent ruin.

Ta-ta industrial wages, hello Mcjobs

India's leading car-maker Tata seems likeliest to take over Jaguar and Land Rover. The fiddle plays, Rome burns.

Mirror, mirror

A few days ago, I said, "This is where I thought we were in 1999. Thanks to criminally reckless credit expansion in the interim, we're still there, only the results may be worse than I feared then." Now, Tom Madell draws comparisons between 2000 and 2007.

Few are brave enough to come out and declare the start of a bear market; but the watchword is "proceed with caution".

Consequences

Michael Panzner turns his attention to the human implications of recession, as I have been doing for some time, most recently here, here and here. At least America is a democracy and so politicians must have some incentive to clean the Augean stables; I don't know about the UK.

Bad news: we depend on the banks

The long-experienced team at Contrary Investor thinks the credit market needs watching, not the equity market. Outlook: oh, dear.

When things turn vengeful, let's take a careful look at the banks, and those who give them their orders. Not for the first time, they've lifted us up, and are making ready to drop us from a great height.

As the song from Mary Poppins has it:

If you invest your tuppence
Wisely in the bank
Safe and sound
Soon that tuppence,
Safely invested in the bank,
Will compound

And you'll achieve that sense of conquest
As your affluence expands
In the hands of the directors
Who invest as propriety demands

[...]

You can purchase first and second trust deeds
Think of the foreclosures!Bonds! Chattels! Dividends! Shares!
Bankruptcies! Debtor sales!

... for the whole lyric see here.

The scene ends, happily enough, with a run on the bank as young Michael loudly demands the return of his twopence.