Commentary Archive:

Related Washington Post article.

G20 Stimulus

Of course, not being in terms of GDP, that isn’t the best perspective.

Here’s the original data from Brookings:

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And here’s a nice interactive heatmap of the plans (roll-over for country details):

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socialism-rich It’s been a slow week graphic-wise, but I came across two fantastic articles on the crisis –  can’t recommend them enough:

Matt Taibbi (Hunter S Thompson successor):
The Big Takeover

Simon Johnson (former IMF Chief Economist): 
The Quiet Coup

I know this is a chart blog, but I love Michael Lewis’ writing. Here’s a great article on how Iceland got in trouble.

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Link: Lewis’s Dec 2008 article on the demise of Wall Street.

A good read on why the current strategies might fail:

http://www.house.gov/apps/list/hearing/financialsvcs_dem/galbraith022609.pdf

No charts. Just a decent letter from CEO Lloyd Blankfein to the FT on mistakes and lessons. Excerpts:

.This over-dependence on credit ratings coincided with the dilution of the coveted triple A rating. In January 2008, there were 12 triple A-rated companies in the world. At the same time, there were 64,000 structured finance instruments, such as collateralised debt obligations, rated triple A. It is easy and appropriate to blame the rating agencies for lapses in their credit judgments. But the blame for the result is not theirs alone. Every financial institution that participated in the process has to accept its share of the responsibility.

.For policymakers and regulators, it should be clear that self-regulation has its limits. We rationalised and justified the downward pricing of risk on the grounds that it was different. We did so because our self-interest in preserving and expanding our market share, as competitors, sometimes blinds us – especially when exuberance is at its peak. At the very least, fixing a system-wide problem, elevating standards or driving the industry to a collective response requires effective central regulation and the convening power of regulators..

Floyd Norris — NYT
December 10, 2008, 11:31 am
Shareholder Value

Three numbers, courtesy of Howard Silverblatt of Standard & Poor’s, shed some light on what companies did with their cash during boom times:

Over the last four years, since the buyback boom began, from the fourth quarter of 2004 through the third quarter of 2008, companies in the S.&P. 500 showed:

Reported earnings: $2.42 trillion
Stock buybacks: $1.73 trillion
Dividends: $0.91 trillion

As a group, every dime they made, and more, went to shareholders. Roughly $2 went to shareholders who sold out for every $1 that was paid in dividends to shareholders who held on to their shares.

article and discussion: http://norris.blogs.nytimes.com/2008/12/10/shareholder-value/

Fallen bull statue in Wall Street

A wonderful article explaining how things got so bad:

Michael Lewis: The End

Another nice interactive chart from the NYT on presidents and business cycles

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