"If they can fog a mirror we'll give them a loan."
- Loan originator unwritten rule leading up to the financial meltdown

Image source here.

that's why there are historians

"People don't understand crises when they go through them. Only afterwards; retrospectively."

- Addison Wiggin

master manipulators

Matt Taibbi on how Goldman Sachs has engineered every major market manipulation since the Great Depression here.

Stressed Out

Interactive map here.

on the impact of the financial crisis

"Business has definitely slowed down."

- Sirron Norris [born 1973]

aftermath

After World War I, not only had Britain's place in the world changed, but British society had also been transformed by the war:

The aristocracy that had ruled Britain for much of the previous century had been badly damaged—as one contemporary author wrote, albeit with some exaggeration, "In the useless slaughter of the Guards on the Somme, or of the Rifle Brigade in Hooge Wood, half the great families, heirs of large estates and wealth, perished without a cry." After enduring savage losses in the fighting—the casualty rate had been three times heavier among junior officers, many of them aristocrats, than among enlisted men—the old elite had also been hurt by wartime inflation and was now being decimated by postwar economic dislocations. Land prices had collapsed and many large estates been put up for auction. In place of the old and confident ruling class, a whole new breed—"hard-faced men who had looked as if they had done well out of the war," as one eminent politician described his new colleagues in the House of Commons—had come to power.

- Liaquat Ahamed, Lords of Finance: The Bankers Who Broke The World, 2009, pp. 136-7

coup d'état

Matt Taibbi is worried:

They cemented and formalized a political trend that has been snowballing for decades: the gradual takeover of the government by a small class of connected insiders, who used money to control elections, buy influence and systematically weaken financial regulations.

His Rolling Stone article is here.

The Formula That Killed Wall Street

Story here.

Investor Emotions

Article here.

"pride of GM"

1992 Cadillac Sedan de Ville owner's forum here. Megan McArdle thinks GM is toast. 

I bought this car today when analysts just announced that there's little hope that GM will survive: "they need hundreds of billions; not tens of billions." The implication for suppliers plus Ford and Chrysler aren't good, but who the hell knows.

iceland's meltdown

Image source here.

Michael Lewis's Vanity Fair piece here. 

They understood instantly, for instance, that finance had less to do with productive enterprise than trading bits of paper among themselves. And when they lent money they didn’t simply facilitate enterprise but bankrolled friends and family, so that they might buy and own things, like real investment bankers: Beverly Hills condos, British soccer teams and department stores, Danish airlines and media companies, Norwegian banks, Indian power plants.

Lewis shares this analogy:

Yet another hedge-fund manager explained Icelandic banking to me this way: You have a dog, and I have a cat. We agree that they are each worth a billion dollars. You sell me the dog for a billion, and I sell you the cat for a billion. Now we are no longer pet owners, but Icelandic banks, with a billion dollars in new assets.

An earlier reference to Björk's perspective on Iceland's meltdown here.

Predicting What You Already Knew

A comment supporting Nate Silver's critique of an Economist's recent work:

The market wasn't able to predict the current recession, at least not in any useful way, so why trust it to predict when the economy will emerge?

The current state of the stock market is only one of many factors to be weighed when assessing the health of an economy. An important factor perhaps, but not the only one. Perhaps not even the primary one.

wheels

Nissan has announced plans to cut its Sunderland, UK, workforce by 1,200. Thousands of unsold cars are stored around the factory's test track. Photograph: Nigel Roddis/Reuters

More images here.

Major World Indices

... melting down here.

I need a chief financial officer

Credit Crisis

Chuck Close on making art during a recession

An earlier reference to Chuck Close here.

Financial Crisis for Beginners

http://baselinescenario.com

Sieg Heil

Hitler faces foreclosure.

UK Financial Crisis

The Virgin Megastore on Oxford Street, London, England.

A NewsHour report.