Crisis Diary as it unfolds ….

22-Dec-08 to 04-Jan-09: Year ends on a positive note

Finally, it’s over. I mean 2008 is finally over. New year, new hopes, BHO has a tough task cut out for him.
Markets are very calm and up on mostly low volumes. Also, markets are up expecting big stimulus by Obama.

Some of the economic news to look forward to in new year,
1. Decision on auto bailout
2. Obama stimulus plan – how big, who benefits
3. Eurozones response to rapidly falling inflation
4. UK struggling to stabilize the economy
5. China and exchange rate manipulation

Who said what about 2008?
Stefan Karlsson on currency movements in 2008
Justin Wolfers of Freakonomics blog about the happiness index of the year 2008
Bond Tangent on 2008 bond market

Who is hoping what from 2009?
Dani Rodrik is looking forward to 2009?
RGE blog on banking in 2009
Martin Wolfe on 2009
Brad Setser captures his view on 2009

Crisis watch at the end of Y2K8:

TED spread 1.33
S&P: 931.80 (+4.2%)
VIX: 39.19


January 4, 2009 Posted by | Weekly News | , , , | Leave a comment

Happy 2009 …

Here goes rather usual annual ritual for rather unusual year of 2008.

Highlights (mostly lowlights) of 2008
Landmark american elections and without doubt the personality of the year was Barack Hussein Obama. Will he stand up to the expectations? So far, not so good.
– First ever olympics to be hosted by China. – is China a rising global super-power or was that the pinnacle of Chinese glory?
– Terrorist attacks on Mumbai infuriated a nation of one billion. Is anybody going to do anything about it?
– It’s economy stupid. The lowest lowlight of 2008 was the grim economic news all across. This is the single worst year since 1930 for the world. By the turn of 2008, US, UK, Eurozone, Japan all are fighting severe recession, others are falling thru.
– As if this much bad news wasn’t bad enough, everybody grew older by one year this year. Sad!


Expectations 2009
– No wars please! Gaza is looking ugly and Russia is getting nasty again, though I don’t think India will take any drastic steps.
– No depression please! Well, recession is here for good, but let’s hope that he doesn’t invite his fierce monster cousin depression to stay with him.
– Some sanity in financial markets will be greatly appreciated! Free markets do not mean gambling houses. Will somebody understand this and put some oversight in place? We don’t want patch up work to seal the holes. We need complete regulatory overhaul.
– No severe winter in Toronto please! Yea, that sucks. What happened to global warming? 


Parting Message to 2008
You were an eye-opener. But please do NOT come back again.


Welcoming 2009 …
We should consider ourselves lucky if 2009 is only half as bad as 2008. Let’s hope so.

January 2, 2009 Posted by | Crisis Snapshot | , , | Leave a comment