Here is a link to one very cool site: http://www.sciencedaily.com/

Michael

Here is an article about a movie which I have not seen, but would like to see. It is about a woman who made a home movie of her neighborhood and hurricane Katrina, before and during and after it happened. She lives in the Ninth Ward and her story sounds like one of a community coming together to fight a major common problem when no one was there to assist them.

“Aug. 22, 2008--There are moments in Trouble the Water, the searing new documentary on Hurricane Katrina, particularly in the hours before the hurricane lands, when you think the central character, Kimberly Rivers Roberts, just doesn't get it. She's got her video camera trained on her Ninth Ward block, playfully interrogating everybody about what they're gonna do when Katrina comes roaring in. They all look around, notice the rest of the city has bailed and shrug.

…

And it's clear from the outset of this gripping film that few in Roberts' community can do much about the fact that the city has abandoned them. They've been told to evacuate. But they don't have cars or money to leave. So they laugh in the face of horror. Little girls on bikes taunt the storm; old men serve up false bravado; corner drunks carry on drinking; and everybody takes up the usual front-stoop post to speculate about what tomorrow will bring.”

Here is a link to the article: http://www.theroot.com/id/47748/page/1

Michael

In my mail this morning is the latest report from one of my favorite economists, Marc Faber, who writes monthly reports which may be found at his site: www.gloomboomdoom.com. In it he refers to a chart which I want to discuss further.

If one is to understand the breadth and depth of the current credit crisis, one must read widely. It also is necessary to ignore the “happy talk” put out by the federal government. One chart prepared by Bridgewater Associates reveals that new credit creation as a percentage of GDP is lower now than at any time since before January 1995. In thinking about that for a moment, that means that there is less debt in the system than in the aftermath of 9-11 or again, at any time in the last 13 years. It may be a longer amount of time, but the chart only goes back to January of 1995 when there was more debt than at the present time.

Again, this is simply more evidence of the credit crisis now enveloping the US. It is also interesting to note that the Federal Reserve has come up with guidelines to restrict lending of the type which allegedly got the mess started, however, the banks and lending institutions have already tightened their lending practices, so more regulation is probably unneeded anyway.

Michael

Here is an article on the recent comments from Professor Kenneth Rogoff who is a former chief economist for the IMF. He predicts that there will be not only smaller banks failing in the US but also a large bank or investment bank. I do not disagree, however, another way to look at this gentleman’s comments would be to think about the fact that they are being made as indicative of a changing social mood rather than seeing them simply for what they are, an opinion of a large bank failure per se.

Quote:

Professor Kenneth Rogoff, a leading academic economist, said there was yet worse news to come from the worldwide credit crunch and financial turmoil, particularly in the United States, and that a high-profile casualty among American banks was highly likely.

“The US is not out of the woods. I think the financial crisis is at the halfway point, perhaps. I would even go further to say the worst is to come,” Prof Rogoff said at a conference in Singapore.

In an ominous warning, he added: “We’re not just going to see mid-sized banks go under in the next few months, we’re going to see a whopper, we’re going to see a big one — one of the big investment banks or big banks,” he said.

Here is a link to this article:
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4563171.ece

Michael

This is not exactly “new news” but the housing market continues to crater. “Banks repossessed almost three times as many U.S. homes in July as a year earlier and the number of properties at risk of foreclosure jumped 55 percent as falling prices made it harder to sell or refinance.

Bank seizures rose 184 percent to 77,295, the steepest increase since reporting began in January 2005,…”

Here is a link to the full article: http://www.bloomberg.com/apps/news?pid=20601087&sid=aLY_H8XQz_iM&refer=worldwide

In a related story, home prices have fallen as the housing market continues to slump. “Nationwide, the median existing single family home price plunged 7.6% to $206,500 in the second quarter, down from $223,500 in the same period of 2007. The median price represents the point at which half of all homes sold for more and half sold for less.

Here is a link to that article:
http://biz.yahoo.com/cnnm/080814/081408_quarter_three_home_prices.html?.v=6

Michael