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Daily Archives: December 3, 2008

Trillions Are the New Billions

By | | Meltdown
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Numerous news stories report that the cost of the “bailouts” so far has “reached” $8.5 trillion. Some more cautious stories say they “could” reach $8.5 trillion. ABC News Chris Cuomo says reassuringly that we might get about half back in loan repayments.

The source of this $8.5 trillion is apparently Bloomberg, and their scorecard is here. First, the totals don’t add to $8.5 trillion, only $8.35 trillion. But that’s quibbling. A closer look reveals a far greater portion of the claimed $8.5 trillion isn’t real.

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Bubbles, Panics, and Recessions

By | | Book reviews, Meltdown
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In the past thirty years, the world economy has suffered several major bubbles. First came the Japanese stock market and property bubbles that peaked in 1989. Scandanavia suffered real estate and stock bubbles at about the same time. These were soon followed by stock market and real estate bubbles that peaked in southeast Asia in about 1997. High-tech and telecommunications bubbles (which some count as two different bubbles) peaked in 2001. Finally, we have the current housing bubble that peaked in 2006.

Are these bubbles more frequent than in the past? Are all of these bubbles somehow related? Why is real estate connected with most of these bubbles? What tools do central bankers and other government agencies have to prevent or minimize the bubbles?

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