Will the Japanese come to our rescue again?

Back from the dead, Tokyo banks buy into Wall Street

Once considered too naive and cautious for the high-risk, high-return world of investment banking, cash-rich Japanese firms are once again aggressively pushing abroad.

"The balance of power in the global financial industry has changed dramatically over the past one to two weeks," said Shinichi Ina, banking analyst at Credit Suisse in Tokyo.

"I don't think anyone imagined a few months ago that Mitsubishi would be making Morgan Stanley into a group firm. I don't think they could have imagined it themselves."

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Not that anyone listened...

Buffett's "time bomb" goes off on Wall Street

On Main Street, insurance protects people from the effects of catastrophes.

But on Wall Street, specialized insurance known as a credit default swaps are turning a bad situation into a catastrophe.

When historians write about the current crisis, much of the blame will go to the slump in the housing and mortgage markets, which triggered the losses, layoffs and liquidations sweeping the financial industry.

But credit default swaps -- complex derivatives originally designed to protect banks from deadbeat borrowers -- are adding to the turmoil.

"This was supposedly a way to hedge risk," says Ellen Brown, the author of the book "Web of Debt."

"I'm sure their predictive models were right as far as the risk of the things they were insuring against. But what they didn't factor in was the risk that the sellers of this protection wouldn't pay ... That's what we're seeing now."

Brown is hardly alone in her criticism of the derivatives. Five years ago, billionaire investor Warren Buffett called them a "time bomb" and "financial weapons of mass destruction" and directed the insurance arm of his Berkshire Hathaway Inc., to exit the business.

It's a fascinating, slighly complex, article which gives some details on the massive shell game played by Wall Street and the Federal Government just in the past couple of years.

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Someone in China has been reading my mind:

China paper urges new currency order after "financial tsunami"

Financial Tsunami. That's what I keep think of this as, as well as The Perfect (Fiscal) Storm.

Hi, my name is Laura and I'm a big geek.

Threatened by a "financial tsunami," the world must consider building a financial order no longer dependent on the United States, a leading Chinese state newspaper said on Wednesday.

The commentary in the overseas edition of the People's Daily said the collapse of Lehman Brothers Holdings Inc., "may augur an even larger impending global 'financial tsunami'."

The article goes on to state:

China is a major buyer of U.S. Treasury bonds, and through its sovereign wealth fund it has taken stakes in two large U.S. financial institutions.

In July 2005, China revalued the yuan and freed it from a dollar peg to float within managed bands. But the yuan and China's trade remains tightly linked to the fortunes of the dollar.

The commentary suggested China must brace for grave economic fallout and look to alternatives, saying the crisis brings to mind the Great Depression of the 1930s.

"Lehman Brothers announced bankruptcy will not only have a domino effect on the global financial world, it will bring a shock to the world economy," the front-page comment stated.

It's not just a US problem - it's global. We need the rest of the world to help out the US, but after eight years of the Bush administrations horrendous foreign policy I don't see the rest of the world flocking to our side to help out. I can't say that I blame them, but it would be in their best interests to help the US.

I hope the rest of the world sees it that way as well.

"We must all hang together, or assuredly we shall all hang separately."
Benjamin Franklin

First snow

We've had our first snow of the 2006/2007 season. Just a dusting and it'll be gone soon.

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Rebuke in Iran to Its President on Nuclear Role

In the hazy world of Iranian politics, such a public rebuke was seen as a sign that the supreme leader — who has final say on all matters of state — might no longer support the president as the public face of defiance to the West.

It is the first sign that Mr. Ahmadinejad has lost any degree of Ayatollah Khamenei’s confidence, a potentially damaging development for a president who has rallied his nation and defined his administration by declaring nuclear power Iran’s “inalienable right.”

It was unclear, however, whether this was merely an effort to improve Iran’s public image by lowering Mr. Ahmadinejad’s profile or was signaling a change in policy.

Surprising. I'm wondering, as everyone is, why the Ayatollah would be pulling back on Ahmadinejad's strings. Western opposition and objections have never dictated policy in the past... so why now? Something else, other than the UN resolution and losing economic stability (nothing to be sneered at but it's not a huge issue yet), is going on. It'll be a while before anyone figures out what the other issues are, I'm sure.

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"The administration's reservoir of historical analogies seems limited to the 1914-1991 period. And it's all about Europe," said Adam Garfinkle, a former Rice speechwriter who edits the foreign-policy journal The American Interest. "No one in a senior position in this administration seems to have even the vaguest notion of modern Middle Eastern history."

That's surprising? How Rice Uses History Lessons is an interesting article in the WSJ. It's only available for today, unless you are a subscriber.

She tends to portray events, particularly the clash between what she calls "moderation" and "extremism" in the Middle East, as driven by huge, almost inevitable forces that make diplomacy impractical, or even irrelevant. Critics say such a view has made Washington's top diplomat less flexible in policy making -- and less adept in old-style negotiation and hand-holding, whose results also can be hard to quantify in the short term.

Those who clamor for sitting down with Syria and Iran are out of touch with what Ms. Rice calls "the underlying forces."

"There's a tendency to think about diplomacy as something that is done untethered to the conditions underlying it or the balance underlying it," she said. "In fact, that's not the way that it works. You aren't going to be successful as a diplomat if you don't understand the strategic context in which you are actually negotiating. It is not deal-making."

What I've believed all along is that a she's unsuited to the job because Security and Diplomacy require opposing mindsets. Can one be good at National Security and Diplomacy? Perhaps, but it was take an extremely well-rounded, well-educated and naturally diplomatic person to accomplish that. I don't think Rice is any of those things - hence, her inability to deal with the nightmare she had an huge hand in creating.

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I wonder if anyone is listening.

Fed Chief warns of crisis over elderly entitlements:

"If early and meaningful action is not taken, the U S economy could be seriously weakened, with future generations bearing much of the cost," Bernanke said yesterday at a Senate Budget Committee hearing.

I've never believed in the US governments ability to provide for me in my old age. I don't believe any government should provide for its citizens from cradle to grave. Social Security distributions, when I'm in my 60's, if they materialize, will be for added savings or nice "extras" like travel - it's not going to support me. Anyone in my age group needs to wake up to the realization that our Social Security deductions are funding our parents retirement - that money will not be there for us in 30 years. If you're over 30, you better be socking away 25% of your gross income each year to live on when you are 65. Otherwise, you're screwed. That 50 inch HDTV with all the bells in whistles won't provide you with a roof over your head or food on your table 30 years from now. Make do with fewer latte's and vacations so you can survive your senior years in comfort instead of worry. Do you really want to be robbing Peter to pay Paul when you are 65? 70? It sucks enough now as it is, doesn't it?

[/end lecture]

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Forgot the pron update. Since January 15th there have been 237 visitors. Of that number 214 have arrived here searching for variations of L l K.

Maybe I should contact these women and sell them some ad space here?