Most Irrelevant Press Release of the Week! It was sent by someone pitching E-Z Decorator, I can only assume the poor guy doesn't have a 401k and isn't aware that everyone at CNBC is busy reporting the end of the world.
"Jane, Here's some information regarding an interesting feature topic...When it comes to effectively decorating a room, an entire home or a business, are we being tackled by technology? There is certainly no shortage of design software, CAD systems or other tech tools on the market today for designers, decorators and homeowners. But are they really helping to give us a true feel for the end design product? How about a feature on a topic like: '"Choosing High Touch Over High Tech When Decorating'?"
I'll get right on that.
FARMERS AND BANKS
Brett Crosby, a cattle rancher whom I've profiled before, responded to my blog doubting whether people west of the Hudson were feeling Wall Street's panic. There are a lot of numbers here, and I'm taking him at his word:
"I spoke with my banker yesterday, and they are taking no new customers, period. Even in ag, which seemed impervious in July, new lending has stopped and they are keeping only their best customers. Most people just don't understand the magnitude of this problem. Consider that Lehman, AIG, Goldman, Morgan, Wachovia, and WAMU currently have collective equity of over $250 billion. If they all fail, their equity virtually disappears as $4.9 trillion in securities hits the market and has to find a home at fire sale prices. At a leverage ratio of approximately 8%, eliminating $250 billion in capital from the financial sector takes about $3.1 trillion, roughly 22% percent of GDP, out of the economy. To compare, GDP contracted by 18% in the depression of 1937-38, and GDP contracted 33% in the depression of 1929-33. Obviously, this is a worst-case scenario with back-of-the-envelope calculations, but it demonstrates the potential severity of this problem."
On today's update on billionaireJeff Greene's bets against subprime, Mark D. writes:
"He looks like a genius now, but I'd assume that, at the time, it wasn't so clear. Obviously, the geniuses at Merrill thought they'd make money selling him this insurance...Seems like everyone wants to think they foolishly relied on historical default rates, and weren't smart enough to realize that the defaults would be higher, and the risks greater with no doc loans, 100% loans, whatever. Clearly, they guessed very wrong...but I find it hard to believe they didn't think they were going to make money collecting premiums on insurance they'd never have to pay out."
From Andrew W.:
"Wow! An article about some rich jerk! What journalism! I just CAN'T wait for the follow-up story about how he's spending all of it!"
On the bailout plan, from "anonymous":
"This economic explosion was foreseeable, (as is the upcoming credit card crisis--currently booked as good assets at BofA and JPMorganChase), with results not unlike economic terrorism...It seems to me that handcuffs for these Wall Street larcenists might be a more appropriate first line of response..."
Ronald W. doesn't have much confidence in Congressional leaders:
"The group of 535 on its best day cannot make a decision of this magnitude in a timely fashion nor should they...If past history is any indication of prudent decision making my bet is on Murphy's law."
Questions? Comments? Funny Stories? Email email@example.com