The Cynical Economist

From CBS (october 7, 2008)

Last year, Iceland won the U.N.’s “best country to live in” poll, with its residents deemed the most contented in the world. 

But today the government had earlier announced it had nationalized the banks under emergency laws enacted to deal with the crisis.

From BBC (November 29, 2008)

The annual rate of inflation in Iceland has escalated to a record high of 17.1% as the country battles the worst financial crisis in its history

From PBS.com

Nobel Prize-winning economist Joseph Stiglitz talks about misplaced priorities in handling the economic meltdown, and what we should do next. 

Why am I showing this interview? Look  at  this :

According to this list, Joseph E. Stiglitz  is the  number one economist. The list is compiled by the University of Columbia, RePecc,  Ideas.org

On that list are also more famoust,  but not top performers …

11. Larry Summers
21. Greg Mankiw
35. Ben Bernanke
99. Eddie Lazear
132. Glenn Hubbard
249. Harvey Rosen
391. Christy Romer
653. Austan Goolsbee

those people are in key positions in our government. Yep, the best and the brightest. 

From Seeking Alpha

In recessions, cash is short and businesses and individuals seek to raise cash by any means practical in order to prepare themselves for the tough times ahead. In a world in which U.S. currency is held as the global reserve, cash means U.S. dollars. In short, institutions and individuals are selling any asset that is not nailed down (stocks, corporate bonds, etc.) and buying U.S. dollars. This has resulted in plummeting asset prices and a rising dollar. However, this dynamic cannot exist in perpetuity.

From Telegraph.uk

Gold is poised for a dramatic surge and could blast through $2,000 an ounce by the end of next year as central banks flood the world’s monetary system with liquidity, according to an internal client note from the US bank Citigroup.

The bank said the damage caused by the financial excesses of the last quarter century was forcing the world’s authorities to take steps that had never been tried before.

This gamble was likely to end in one of two extreme ways: with either a resurgence of inflation; or a downward spiral into depression, civil disorder, and possibly wars. Both outcomes will cause a rush for gold.

“They are throwing the kitchen sink at this,” said Tom Fitzpatrick, the bank’s chief technical strategist.

“The world is not going back to normal after the magnitude of what they have done. When the dust settles this will either work, and the money they have pushed into the system will feed though into an inflation shock.

As I told you two days ago the word for 2009 will be BLOWOUT

From Clusterstock

Ray Soifer, a retired executive from Brown Brothers Harriman and a Harvard Business School graduate, designed the famous metric for reading the HBS stats. When 10% or less of a graduating class take Wall Street jobs, it’s a long-term buy signal. When 30% or more take market sensitive Wall Street jobs, it’s a big flashing sell signal. ..

…This year, for the third year in a row, the HBS stats are sending a loud and clear sell signal. This year, some 41% of Harvard Business School’s graduate found work on Wall Street. That’s actually a year over year increase, up from 40% last year, 37% the year before that, 30% in 2005 and 26% for the class of 2004….

From The Motley fool

Drawn from independent research and diverse published sources, the following table seeks to provide as precise an accounting of the crisis as the public record currently permits. By my calculations, the combined total of existing and announced outlays from the Federal Reserve and from U.S. government agencies that are directly attributable to the financial crisis has ballooned to more than $8 trillion.

Item	Issuer	Amount of Outlay
Commercial Paper Funding Facility	Federal Reserve	$1.8 trillion
Temporary Liquidity Guarantee Program	FDIC	$1.4 trillion
Term Auction Facility (TAF)	Federal Reserve	$900 billion
Fannie Mae (NYSE: FNM), Freddie Mac (NYSE:FRE), and Ginnie Mae	U.S. Treasury / Federal Reserve	$800 billion
Treasury Asset Relief Program (TARP)	U.S. Treasury	$700 billion
Total USD International Currency Swap Lines	Federal Reserve	$688 billion
Money Market Investor Funding Facility	Federal Reserve	$540 billion
Other Loans: Primary Dealer Credit, etc.	Federal Reserve	$288.7 billion
Citigroup (NYSE: C) Guarantee	U.S. Treasury / FDIC	$306 billion
Hope for Homeowners Act of 2008	U.S. Treasury	$304 billion
Term Securities Lending Facility (TSLF)	Federal Reserve	$225 billion
Term Asset-Backed Securities Loan Facility (TALF)	U.S. Treasury	$200 billion
Economic Stimulus Act of 2008	U.S. Treasury	$168 billion
Paid to JPMorgan Chase (NYSE: JPM) to Settle Lehman Brothers Debt	Federal Reserve	$138 billion
AIG (NYSE: AIG) Bailout	Federal Reserve	$112.5 billion
Bear Stearns Brokered Sale	Federal Reserve	$26.9 billion
I’m afraid to look …	Total:	$8,597,100,000,000

What are they smoking?

From Boston Herald

The word “bailout,” which shot to prominence amid the financial meltdown, was looked up so often at Merriam-Webster’s online dictionary that the publisher says it was an easy choice for its 2008 Word of the Year…

The Cynical Economist Bet $1, that the word of the year 2009 is going to be BLOWOUT!!!