roachboy

this series--the big freeze--has been appearing in the financial times over the past days and is an interesting, detailed analysis of the chain reaction of crises beginning with the sub-prime mess and ramifying outward.

the series is way too long to paste up here, i think.
if you follow this link:

FT.com / In depth / credit squeeze anniversary

you should get to it--you may have to subscribe to the paper, but it's free with certain limits on the number of articles you access per week.

there are some interesting claims: straight away, this whole scenario, the nested crises, are likened to the japanese financial crisis of the 1990s.

the second and third segments develop the argument that the current interpretations of what is happening economically is upside down. the claim is interesting, but i am not sure about the argument, whether it demonstrates the claim.

for the moment, i'll leave this here---i want to see if folk are inclined to read this and if so, whether they have problems with access---if there are problems, i can figure out another way to make this available. at that point, i'll post some questions that i am trying to figure out--but feel free to pose your own.

there's alot of information here, so the thread may be a bit slow to develop.

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guyy

Hmmm... the nesting effect is the same as in Japan. However, incomes were rising there and there was no fuel & food inflation. Just the opposite in fact. Prices for food in Japan went way down in the 1990s, and there was great fear of deflation. This slump is unfolding within a different environment. I'd say it's more threatening.

You'd think you'd hear more about similarities to the Japan's "lost decade" than you do. Part of the reason may be that it's too scary to think that it might take 15 years or so to get out of this.

I thought the infrastructure spending suggestion was very Japanese. That's just what an LDP pol would say. In a Japanese context, i'd roll my eyes, but the US really does need it.

You can look at 4 articles without signing up, 30 if you sign up for the free account.

Locobot

I had no difficulty in accessing the articles, read the first two skimmed the third so far. The articles are written with the kaleidascopic lens of economic theory, so self-referential, so short-sighted, so inbred. They seem to completely miss the big-picture issue, a surplus of investment capital which lead to lower and lower standards for the disbursement of all that $$$. Swindlers at every level of the investment "industry" ignored any common sense instinct they may or should have had and pushed on using the most lax standards available.

But what does a surplus of investment capital actually mean? What's the big-picture there? There is a stratified top-heavy concentration of wealth that is entrenched and supposedly insulated from risk. People want to see their money grow without taking chances and without doing any work. Its the great Valhalla that the financial world offers, something for nothing, limitless growth, I=P r t. It's as hollow as any religion once the fat gets cooked away. Gene pools at the top of the economic ladder have little to fear, it's the middle class that gets pulled in and are the first to feel the sting when the great Ponzi schemes start to unravel.

What about the U.S. government's decision to drop $100 bills into a warzone by the metric ton with little or no protection in terms of physical guards or ethical oversight? Missed where the Financial Times mentioned that, probably a typo. Bread costing $5 a loaf couldn't have anything to do with Republican cronies being paid millions and millions to truck "sailboat fuel" to Babylon could it? I know, I know, big chunks of that money also went to paying enemies not to attack us. Guess what happens when that revenue stream dries up. You have an enemy that still has all the same religious ideological reasons for hating you, but now they're well equipped thanks to the piles of cash you've been tossing their way.

roachboy

guy--do you have a handy dandy synopsis available of the japanese financial crisis?
i was wondering about the comparison.
generally, it is referred to as if you, the reader, already know.

__________________
a gramophone its corrugated trumpet silver handle
spinning dog. such faithfulness it hear

it make you sick.

-kamau brathwaite

hiredgun

Roach: the following link has a collection of Paul Krugman's writings on the topic of Japan. Saving Japan

I would like to weigh in on the topic itself - leaving this note here to publicly commit myself to return later in the evening...

kangaeru

Saving a spot to reply later as well. Good find Roachboy.

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Locobot

I was just going to note how these articles seem like a rehash of what Krugman was writing years ago. Thanks for the link.