Precious Metals Trends

Google Precious Metals Trends


Search trend factors as of 2009-11-24:

Gold      1.0
Silver    0.57
Platinum  0.18
Palladium 0.04
Rodium    0.0

Brendan Burke

This one is refreshing...

Slope of Hope, 2009-11-13: Hello My Name is Not Oulous (by Brendan Burke)

Two events led me to investing many years ago. One is the death of my granny and the other are magical invisible boots I used to sell on ebay called J-boots. The boots made your metame run fast within the medium of Everquest. I noticed an emerging shadow market of the already shadowy economy within the game Everquest, and I thought I would take a crack at finding an area to exploit that I could dominate in. There were too many sellers already so I had to get very specific and sell one particular item. I chose the J-boot because everyone had to have them, and the major sellers were not bothering to sell it due to its complicated delivery procedure. So in a fairly short period of time I had amassed a decent amount of money from death and magic virtual boots. I then decided to take that money and push it into the markets. I knew nothing about stock markets, and the year I made my first trade was 2001. Both bad and good timing.

...

For me the market has two modes of operation. Unsafe and slightly more unsafe.

When the market is plain old unsafe, I will swing trade with hold times of a few days to a few weeks, to possibly but very infrequently, a few years.

If the market is even more unsafe I will day trade only with hold times of a few minutes to all day…. every once in a while I go overnight with something that has momentum.

...

My trading style is illusion and momentum. Illusion is my basis for swing trading. Almost all value is an illusion, and I trade off people’s hopes as they relate to that illusion.

Momentum is for day trading, which is either behavioral in terms of pure price action or news driven. In the end the two blend together into a messy giant sundae, and I just try and get a few bites before it becomes a sloppy disaster.

...

1. First thing to learn is how to take a loss. How do you react? If you fall apart and its on your mind 100% of the time, then quit or change investing styles. Once you learn to how to take a loss you are ready to try trading.

2. If you are 18 to 22 and considering becoming a financial professional you are making a huge mistake. The world is divided up between creators and destroyers and those in the financial world are nothing but destroyers, myself included. Luckily it is not my background nor does it consume 100% of my time. The other half of my life is spent trying to create things. I suggest you always keep something else in your back pocket if you choose to journey as a trader, something that matters to human beings.

3. There is little or no truth and little or no value. If the stock market were functioning properly, then stock prices would not move very far and fast except in extreme cases and a public company would exist as an agreement between management and shareholders. All companies would pay dividends as soon as they achieved profit as a way of paying back those that financed their company. Sounds odd right? Thats how it should work but it doesn’t, so remember that all values are an illusion, and its your job to be a magician and make trades that profit off the best illusions.

4. Read Reminiscences of a Stock Operator. Its a great story and will make you feel like trading is akin to swashbuckling and piracy. It also lets you know who you are up against. Remember no one is on your side. Its you versus the world when you are trading for yourself. Don’t bother with any other financial books; just read novels, history, magazines, manga, cartoons, anything. Maybe check out Naseem Taleb, but his “luck” of finding a black swan makes him era specific, so his current books won’t be as useful in a few years. There is nothing worse than being a trader or a lawyer and going home only to talk about trading or the law. Fill your life with other things.

5. They always say don’t rely on luck, don’t hope, and use fact not intuition. I thrive on Luck, Hope, and Intuition, in fact I am hoping my intuition can find me a lucky trade tomorrow.

Lloyd "Gecko" Godman

Lot's has been written everywhere about the bankers doing God's work... well, here is how it came about:

Times Online, 2009-11-08: I'm doing 'God's work'. Meet Mr Goldman Sachs

"Is it possible to have too much ambition? Is it possible to be too successful?" Blankfein shoots back. "I don’t want people in this firm to think that they have accomplished as much for themselves as they can and go on vacation. As the guardian of the interests of the shareholders and, by the way, for the purposes of society, I’d like them to continue to do what they are doing. I don’t want to put a cap on their ambition. It’s hard for me to argue for a cap on their compensation."

So, it’s business as usual, then, regardless of whether it makes most people howl at the moon with rage? Goldman Sachs, this pillar of the free market, breeder of super-citizens, object of envy and awe will go on raking it in, getting richer than God? An impish grin spreads across Blankfein’s face. Call him a fat cat who mocks the public. Call him wicked. Call him what you will. He is, he says, just a banker "doing God’s work"

Not much to see here, if you ask me, just another Peanuts/Victory line...





Good night!

Kirk Stephenson

The risk of securities lending (or watch your counterparty)...

Kirk Stephenson (1961 - 2008)

This memorial website was created in the memory of our loved one, Kirk Stephenson, who died on Thursday, September 25, 2008.

...

New Zealand born, he arrived in London in 1983 when he was in his early 20's as an SG Warburg graduate trainee and he never left. After his stint in he City, he went on to work as CFO and COO at several well-respected, large organisations including Amersham Plc, Coats Plc and the international iaw firm, Freshfields. Latterly he had worked as a director for the private equity firm Olivant set up in 2006, which came to prominence earlier this year as one of the potential bidders for Northern Rock.

20 Minuten, 2008-09-29: Millionär wirft sich vor Schnellzug

Zusammen mit Luqman Arnold, der für kurze Zeit Konzernchef der UBS war, gründete Stephenson vor zwei Jahren die Beteiligungsgesellschaft Olivant Advisers. Diese übernahm im Juni dieses Jahres für über eine Milliarde Euro 2,5 Prozent der UBS-Aktien – ein folgenschwerer Fehler, wie sich mit dem Kurszerfall der UBS-Aktien herausstellte. 250 Millionen Euro soll Stephenson verloren haben.

Olivant: Statement 1 October 2008

Olivant Limited has previously indicated that it is interested in shares in UBS representing 2.78% of the company. These shares were held through Lehman Brothers International (Europe) (“LBIE”). In light of the appointment of administrators to LBIE, Olivant Limited is evaluating the position of its interest in UBS and is in contact with the administrators to secure these assets.

Olivant: Kirk Stephenson 2 October 2008

Our thoughts and condolences are with his wife and family.

London Evening Standard, 2008-10-02: Mystery of ‘lost’ shares Olivant left at Lehman

City Spy hears it was “in the small print” that they could be moved on, that Lehman could use them to raise cash. Arnold said: “We are fortunate that we are a private company, and a company which has substantial paid-up capital, which means that this is not a drama for us.”
Oh no? The shares have vanished and you can't vote? Sounds pretty dramatic. Did Stephenson know Lehman could take them? If not, why not? How did Arnold find out and how did he react? Questions, questions. Unfortunately, the COO cannot answer them.

FinishingWell, 2008-12-01: When the Pressure Became Too Great...

As Olivant's chief operating officer, Stephenson had approved the Lehman contract, and had left the firm and was negotiating a separation agreement. Several friends offered that Stephenson had recently told them that he was under enormous pressure at work. Still, his death was a tremendous shock to a wide circle of friends, not only in business, but also art and politics. Only a few weeks before Lehman's bankruptcy, Stephenson and his wife had gone to Verona, Italy, to see the opera with a friend who heads a London hedge fund. On Sunday, September 21st, Stephenson had attended his regular weekly tennis game. His playing partner said he didn't talk about specific problems, but made it clear that "things weren't easy" at work. His game was off and his spirits subdued. "He seemed down, pale, and had other things on his mind," Mr. Maher said.

Clearly, the pressure had become too great. Stephenson was known to be fastidious about everything, from his neat handwriting to his ironed handkerchiefs. Mr. Maher, his tennis partner recalled him organizing the bills in his wallet so they faced the same way and were ordered in size. "Control was a very important feature for him," Mr. Maher offered. And clearly, the economic meltdown, and his financial demise, were too much for him to handle

One year later and no news of the UBS shares... only some merger announcements of some Russian banks at the Olivant press release page. Hmm, those, Northern Rock, UBS, Lehman Brothers...

Bloomberg, 2009-09-15: London suicide connects Lehman lesson missed by Hong Kong woman

The stocks and bonds of Lehman’s London brokerage customers, used as collateral to borrow more money, were frozen on September 15. About 3,500 clients, including 700 hedge funds, couldn’t get access to an estimated $65 billion of assets. PricewaterhouseCoopers, Lehman’s UK bankruptcy administrator, is still sorting out who should get paid and how much. Some firms have closed, and others may have to wait as long as a decade to get their assets back, Tony Lomas, the PwC partner in charge of the UK administration, said in August.

It took only 10 days for the ice-nine to get to Kirk Stephenson, chief operating officer of Olivant Ltd., a London private-equity firm run by former UBS AG Chairman Luqman Arnold. On September 25, Stephenson, 47, jumped in front of a train going 125 mph at a station in Taplow, 45 kilometers west of London.

The coroner’s office for the county of Buckinghamshire ruled the death a suicide. Stephenson, a native of New Zealand, was despondent about the financial crisis and talked about killing himself one week after Lehman’s demise, according to a statement from his wife read at the coroner’s inquest.

Lehman Brothers International (Europe) was Olivant’s prime broker. It held the firm’s 2.78-percent stake in UBS, Switzerland’s largest bank by assets, according to a statement from Olivant on October 1. The shares were worth 1.6 billion francs ($1.44 billion) at the time.

The hedge fund lock-up led the UK to reconsider its procedures when firms fail. While Lehman’s broker-dealer in the US stayed out of bankruptcy long enough to process many of its trades, the business seized up in the UK.

“In the US, everything was wrapped in cotton wool for four days,” said PwC’s Lomas. In the UK, “everything failed come 7:56 a.m. that Monday morning.”

The UK had an advantage in attracting hedge fund assets before the Lehman bankruptcy. While US prime brokers face limits on how much they can loan hedge funds, those rules could be circumvented with overseas units like Lehman’s in London. Some US clients didn’t know they were customers of Lehman Brothers International (Europe).

“If you didn’t pay attention to what you were signing, you would have missed it,” said Michael Romanek, principal at Rise Partners Ltd., which arranges financing for funds from London. “It was called enhanced prime brokerage, where they could be more accommodating with more leverage or loans. It just took signing some extra papers in New York. Most people didn’t realize it.”

His legacy

No material is available.

The Run On Goldman Sachs

Wall Street’s Near-Death Experience

By Andrew Ross Sorkin
November 2009

Nevertheless, Stanley Druckenmiller, a George Soros acolyte worth more than $3.5 billion, had taken most of his money out earlier that week, concerned about the firm’s solvency. If word got around that a hedge-fund manager of Druckenmiller’s reputation had lost confidence in Goldman, that alone could cause a run. Cohn called him and tried to persuade him to return the money to the firm. “I have a long memory,” Cohn, who was taking this personally, told Druckenmiller, in whose honor he had even once hosted a charity cocktail party. “Look, the one thing I’m doing is I’m learning who my friends are and who my enemies are, and I’m making lists.”

Druckenmiller, however, was unmoved. “I don’t really give a shit—it’s my money!” he shot back. Unlike most hedge funds, Druckenmiller’s consisted primarily of his own money. “It’s my livelihood,” he said. “I’ve got to protect myself, and I don’t really give a shit what you have to say.”

“You can do whatever you want,” Cohn said in carefully measured tones. But, he added, “this will change our relationship for a long time.”

SAP Observations

Observations from the 1q2009 and 2008 reports

it intended to reduce its workforce globally to 48,500 positions by year-end 2009, taking full advantage of attrition as a factor in reaching this goal

Yeah, this damn attrition, we make it a positive... (and I thought that "One of SAP's greatest achievements as a company is that we are continuously recognized as an employer of choice by employees who perceive SAP a great place to work.").

On March 11, SAP and Sybase, an industry leader in delivering enterprise and mobile software, announced a partnership centred around co-innovation that will change how users access critical business information anytime, anywhere. The two companies are co-innovating and collaborating to deliver the new SAP Business Suite software for the first time to iPhone, Windows Mobile, BlackBerry and other devices by integrating it with Sybase’s industry-leading mobile enterprise application platform.

Yeah, Sybase, the great industry leader...

On March 4, SAP announced it will collaborate with Intel to optimize SAP Business One applications on Intel Xeon Processor based systems to enable small businesses to lower cost by achieving faster time to value of their IT investments. SAP and Intel intend to encourage original equipment manufacturers (OEM) and solution providers to create industry-specific bundles to leverage the results of this collaboration.

Yeah, Intel, it sucks not to control the hardware...

On March 4, SAP announced plans to integrate pre-configured ..., providing customers with instant access to trusted and timely data.

Yeah, boah, ...

SAP announced that its sustainability efforts will be led by a newly formed cross-functional sustainability organization headed by SAP’s first chief sustainability officer.

Yeah, wow, and I bet he/she will be part of the "Vorstand".

On February 4, SAP unveiled SAP Business Suite 7 software, a next-generation software suite that helps businesses to optimize their performance and reduce IT cost.

Yeah, reducing IT cost is good! Now, wait a moment, what else is new?

SAP will discontinue its U.S. GAAP reporting and will only report financial data under IFRS from fiscal 2010 onwards.

Yeah! :-)

employees working in development teams ... 15'401

Sales and marketing costs for 1q2009 was EUR 513 million compared to research and development costs of EUR 365 million (a factor of 1.4).

68% of the equity consists of goodwill! Well, well, that's the Business Objects aquisition.

Change in deferred income is very high! Why? OK, this must be the client payments in advance for the rest of the year.

We have issued loans to employees other than to members of SAP AG’s Executive Board and Supervisory Board amounting to a gross value of €63 million, and €64 million, at March 31, 2009, and December 31, 2008, respectively. Loans granted to employees primarily consist of interest-free or below-market-rate building loans which SAP discounts for financial reporting purposes based on prevailing market rates. SAP has not experienced significant default on loans to employees. There have been no loans to employees or executives to assist them in exercising stock options.

So why does SAP give loans to employees?!!!

2008

82'000 companies use SAP software.

Three founders keep holding now only 28.7% of the shares (not considering treasury shares).

SAP’s Skills On-Demand library provides employees with access to approximately 13,000 e-learning courses, books, simulations, and other learning materials that can help employees expand their skill sets and drive their career development.

...

Open Source
Software based on the concept of software developers coming together to build a virtual community and solving a common problem by developing working software.

Yeah, working software is always good.

Successful development projects under the Open Source model include Linux - a free operating system supported by SAP.

Yeah, thanks SAP!

patch support
Product support phase during which SAP provides fixes to customers. Adopted from the BusinessObjects support policy.

Yeah, good to know they have patches, aeh, support patches, aeh, have patchwork support. Patch support.

Meaning of Money

Look at this very interesting chart from The Big Picture: Bailout Costs vs Big Historical Events



Well, it left out the world war I and II, still, the US compensation for the financial crisis is estimated to be at around USD 15 trillion, more than the US spend on all other major events combined (taking inflation into account)! Also for comparison, 2008 US Gross Domestic Product is USD 14 trillion.

Wow. But...

so, what did really happen? Just a few numbers changed. No one died, no houses destroyed, a few bankers out of their job. Compare this with the real events. How many tragedies for the whole world in case of the catastrophic events. In the other case, well, you had a rocket and exciting photos from moon and earth, or at least a big new junk of it.

So where is the problem? Something is obviously out of balance. Thought it is not just the current crisis. The problem is, what money measures is not necessary real value, it is really relative.

The numbers above give us some perspective how crazy the current situation is, but even more so, that our ordinary understanding of money is quite questionable.

Big Numbers

Obama Budget Cuts Visualization


Big numbers made accessible... watch till the end, it's funny.

Via The Big Picture.

Buffett's Letter 2008

It's Saturday night, but what the heck, Buffett's latest letter to the shareholders comes first.

Below are a few quotes. Just upfront my favorite one:

Improved “transparency” – a favorite remedy of politicians, commentators and financial regulators for averting future train wrecks – won’t cure the problems that derivatives pose. I know of no reporting mechanism that would come close to describing and measuring the risks in a huge and complex portfolio of derivatives. Auditors can’t audit these contracts, and regulators can’t regulate them. When I read the pages of “disclosure” in 10-Ks of companies that are entangled with these instruments, all I end up knowing is that I don’t know what is going on in their portfolios (and then I reach for some aspirin).
...
Derivatives contracts, in contrast, often go unsettled for years, or even decades, with counterparties building up huge claims against each other. “Paper” assets and liabilities – often hard to quantify – become important parts of financial statements though these items will not be validated for many years. Additionally, a frightening web of mutual dependence develops among huge financial institutions. Receivables and payables by the billions become concentrated in the hands of a few large dealers who are apt to be highly-leveraged in other ways as well. Participants seeking to dodge troubles face the same problem as someone seeking to avoid venereal disease: It’s not just whom you sleep with, but also whom they are sleeping with.

What we have is not only a financial crisis, it is an accounting crisis. With complex non-linear financial instruments, accounting can't serve the purpose it is made for. Without a valid accounting, there can not be trust in the soundness of a business. This is not only a problem for banks, but any damn company (or small town) can have these instruments in their books. JP Morgan has each USD 70 to 90 billion on the asset and liabilities side in derivative instruments. These derivatives have underlyings in the trillions. What does that mean for JP Morgan (or for the rest of us)?!

So here are the remaining ones:

Economic medicine that was previously meted out by the cupful has recently been dispensed by the barrel. These once-unthinkable dosages will almost certainly bring on unwelcome aftereffects. Their precise nature is anyone’s guess, though one likely consequence is an onslaught of inflation.
...
During 2008 I did some dumb things in investments. I made at least one major mistake of commission and several lesser ones that also hurt. I will tell you more about these later. Furthermore, I made some errors of omission, sucking my thumb when new facts came in that should have caused me to re-examine my thinking and promptly take action.
...
Long ago, Ben Graham taught me that “Price is what you pay; value is what you get.” Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.
...
Ajit came to Berkshire in 1986. Very quickly, I realized that we had acquired an extraordinary talent.
So I did the logical thing: I wrote his parents in New Delhi and asked if they had another one like him at home.
Of course, I knew the answer before writing. There isn’t anyone like Ajit.

What's this?! Ajit has a brother taking the shots at Deutsche Bank's investment bank. Maybe I interpret too much into this, but maybe this is a sniding remark in that direction, maybe that brother exists but isn't that great as we are made to believe in taking risks.

I told you in an earlier part of this report that last year I made a major mistake of commission (and
maybe more; this one sticks out). Without urging from Charlie or anyone else, I bought a large amount of ConocoPhillips stock when oil and gas prices were near their peak. I in no way anticipated the dramatic fall in energy prices that occurred in the last half of the year. I still believe the odds are good that oil sells far higher in the future than the current $40-$50 price. But so far I have been dead wrong. Even if prices should rise, moreover, the terrible timing of my purchase has cost Berkshire several billion dollars.

I made some other already-recognizable errors as well. They were smaller, but unfortunately not that small. During 2008, I spent $244 million for shares of two Irish banks that appeared cheap to me. At yearend we wrote these holdings down to market: $27 million, for an 89% loss. Since then, the two stocks have declined even further. The tennis crowd would call my mistakes “unforced errors.”
...
When the financial history of this decade is written, it will surely speak of the Internet bubble of the late 1990s and the housing bubble of the early 2000s. But the U.S. Treasury bond bubble of late 2008 may be regarded as almost equally extraordinary.

Clinging to cash equivalents or long-term government bonds at present yields is almost certainly a terrible policy if continued for long. Holders of these instruments, of course, have felt increasingly comfortable – in fact, almost smug – in following this policy as financial turmoil has mounted. They regard their judgment confirmed when they hear commentators proclaim “cash is king,” even though that wonderful cash is earning close to nothing and will surely find its purchasing power eroded over time.
...
Derivatives are dangerous. They have dramatically increased the leverage and risks in our financial system. They have made it almost impossible for investors to understand and analyze our largest commercial banks and investment banks. They allowed Fannie Mae and Freddie Mac to engage in massive misstatements of earnings for years. So indecipherable were Freddie and Fannie that their federal regulator, OFHEO, whose more than 100 employees had no job except the oversight of these two institutions, totally missed their cooking of the
books.
...
Improved “transparency” – a favorite remedy of politicians, commentators and financial regulators for averting future train wrecks – won’t cure the problems that derivatives pose. I know of no reporting mechanism that would come close to describing and measuring the risks in a huge and complex portfolio of derivatives. Auditors can’t audit these contracts, and regulators can’t regulate them. When I read the pages of “disclosure” in 10-Ks of companies that are entangled with these instruments, all I end up knowing is that I don’t know what is going on in their portfolios (and then I reach for some aspirin).

For a case study on regulatory effectiveness, let’s look harder at the Freddie and Fannie example. These giant institutions were created by Congress, which retained control over them, dictating what they could and could not do. To aid its oversight, Congress created OFHEO in 1992, admonishing it to make sure the two behemoths were behaving themselves. With that move, Fannie and Freddie became the most intensely-regulated companies of which I am aware, as measured by manpower assigned to the task.
...

On June 15, 2003, OFHEO (whose annual reports are available on the Internet) sent its 2002 report to Congress – specifically to its four bosses in the Senate and House, among them none other than Messrs. Sarbanes and Oxley. The report’s 127 pages included aself-congratulatory cover-line: “Celebrating 10 Years of Excellence.” The transmittal letter and report were delivered nine days after the CEO and CFO of Freddie had resigned in disgrace and the COO had been fired. No mention of their departures was made in the letter, even while the report concluded, as it always did, that “Both Enterprises were financially sound and well managed.” In truth, both enterprises had engaged in massive accounting shenanigans for some time. Finally, in 2006, OFHEO issued a 340-page scathing chronicle of the sins of Fannie that, more or less, blamed the fiasco on every party but – you guessed it – Congress and OFHEO.
...
A normal stock or bond trade is completed in a few days with one party getting its cash, the other its securities. Counterparty risk therefore quickly disappears, which means credit problems can’t accumulate. This rapid settlement process is key to maintaining the integrity of markets. That, in fact, is a reason for NYSE and NASDAQ shortening the settlement period from five days to three days in 1995.

Derivatives contracts, in contrast, often go unsettled for years, or even decades, with counterparties building up huge claims against each other. “Paper” assets and liabilities – often hard to quantify – become important parts of financial statements though these items will not be validated for many years. Additionally, a frightening web of mutual dependence develops among huge financial institutions. Receivables and payables by the billions become concentrated in the hands of a few large dealers who are apt to be highly-leveraged in other ways as well. Participants seeking to dodge troubles face the same problem as someone seeking to avoid venereal disease: It’s not just whom you sleep with, but also whom they are sleeping with.
...
Considering the ruin I’ve pictured, you may wonder why Berkshire is a party to 251 derivatives contracts (other than those used for operational purposes at MidAmerican and the few left over at Gen Re). The answer is simple: I believe each contract we own was mispriced at inception, sometimes dramatically so. I both initiated these positions and monitor them, a set of responsibilities consistent with my belief that the CEO of any large financial organization must be the Chief Risk Officer as well. If we lose money on our derivatives, it will be my fault.
...
In 2008 we began to write “credit default swaps” on individual companies. ... We are unlikely to expand this business to any extent because most buyers of this protection now insist that the seller post collateral, and we will not enter into such an arrangement.

This seems to indicate, CDS selling did not involve posting collateral in the past.

Real Money

I read numbers for the total (current) bailout commitments in the US of between USD 8.5 and 11 trillion. As the saying goes, a trillion here, a trillion there, and soon you are talking of real money.

What do you think, that this will be to have for much cheaper in Europe?

To be forward looking, here is my name suggestion for the next currency, when this all has to be started from scratch again: the Unreal.

Second Wave

Jesse's Cafe Americain: European Banks Face Devastating Exposure to Emerging Markets

Not even Russia can easily cover the $500bn dollar debts of its oligarchs while oil remains near $33 a barrel. The budget is based on Urals crude at $95. Russia has bled 36pc of its foreign reserves since August defending the rouble.

"This is the largest run on a currency in history," said Mr Jen.

In Poland, 60pc of mortgages are in Swiss francs. The zloty has just halved against the franc. Hungary, the Balkans, the Baltics, and Ukraine are all suffering variants of this story. As an act of collective folly – by lenders and borrowers – it matches America's sub-prime debacle. There is a crucial difference, however. European banks are on the hook for both. US banks are not.

Trust

Enjoy!

Congressman Capuano says "I don't have a penny of my money in your banks!!" to CEOs Feb 11 2009


Via Jesse's Cafe Americain.

Currencies and Commodities

Jim Rogers: Currency Crisis is Coming this Year (05.02.09)


Jim Rogers talks Dissolution of Russia (05.02.09)


(1/2) Marc Faber - Says He'd Favor Industrial Commodities Over Gold 2009-01-06


CNBC: Dr Doom: It Pays to Wait in Asia

City Bank Run

Mail Online: Revealed: Day the banks were just three hours from collapse

But shares continued to plummet, turning into a rout on the Friday when the FTSE crashed by ten per cent within minutes of opening.

Both Royal Bank of Scotland and HBOS were nearing complete collapse - but Lord Myners, who built up his fortune during a long career in the City, said the problems ran far wider.

'There were two or three hours when things felt very bad, nervous and fragile,' he said. 'Major depositors were trying to withdraw - and willing to pay penalties for early withdrawal - from a number of large banks.'
Lord Myners

Lord Myners: 'There were two or three hours when things felt very bad, nervous and fragile'

The threat to the system was so severe that the Bank of England was forced to contact RBS's creditors in New York and Tokyo to persuade them not to withdraw their funds, but it is not known which other banks faced a run on their reserves.

'We faced the very real problem of how banks could stop depositors from withdrawing their money,' a Treasury source said yesterday.

'The banks themselves were selling their shareholdings, accelerating the stock-market falls, and preparing to shut up shop.

Bloomberg: U.K.’s Myners Tells Times Bank System Nearly Failed on Oct. 10

Nothing to see here, keep going folks...

Depression

You know you are living during depression times, when you read about "banksters" jumping off the windows, aeh, in front of trains, and when you have sites like these:

dabagirls.com (Dating A Banker Anonymous):

Thanks to the recession, I now have a completely devoted BF, which is exactly what I wanted. So I should be happy, right? Wrong. I’m bored and can’t stop thinking about my perpetually unattainable Euro ex-boyfriend who is recession proof courtesy of an offshore trust account. To be honest, I’m only with my BF because I just don’t have the heart to change my facebook status from “in a relationship” to “I ain’t saying I’m a gold digger, but I ain’t messin’ with no broke banker.”

cluE NO

one or Honey Money...

Jesse's Café Américain: Is Money Supply a Relative Absolute?

If you have one thousand dollars in cash, in your pocket, is it completely equivalent to one thousand dollars worth of honey which you have at home in your pantry, in terms of its affect on inflation or deflation?

Forgiving the pun, the honey is decidedly less liquid than the cash.

Does it matter who is holding the money? What if the bulk of the money being added to to the economy is being given to gamblers in Las Vegas, rather than lets say farmers in Pennsylvania. Is there a difference in that money's effect on inflation or deflation?

The point is not to provide answer to these questions at this time, since this is basis for a new perspective in economics which is still in its early states.

Rather, it is to cast doubt on the certainty that what we call money is always and everywhere equivalent in force and power and influence as an economic actor no matter where and how it is held.

Some observations:

a) Money is an approximation of value at best, because we also don't know what the value of honey is either, and not all honey will be put to good use. Same as with money.

b) Money and honey, both have to flow, or they are not of much use.

c) Nevertheless money and honey function as value stores.

d) Did you know that wild honey comes from lice shit?!

Flickr impressions:

Money Supply

A good explanation of money supply (a.k.a. M0, M1, M2, and M3):

Jesse's Café Américain: Money Supply: A Primer

Money and Value

If you have a few spare hours (like five), here is a buddhist perspective on money by Ken McLeod:

MAV01: Money and Value (workshop)
MAV02: Money and Value (workshop)
MAV03: Money and Value (workshop)
MAV04: Money and Value (workshop)

Part 1 of 4
The problem: money drives the way we understand ourselves. Aim of financial model is to see experience through projection of money; aim of Buddhism is to experience what arises without projection; three bases of relationship: mutual benefit, shared aim, emotional connection; all forms of idealism involve avoidance of some form of suffering; when money is regarded as the problem, something else is being ignored; Questions: What are you asking for? What do you want? What does money symbolize to you?
Duration 00:43:53

Part 2 of 4
What generates the problem? Confusion about money points to confusion about what we value in our lives; when you see things in terms of money, you are inevitably in one of the six realms; guided meditations: survival, getting emotional needs met, and self-image; intention versus self-image; valuing what can be taken away places life in other people's hands.
Duration 01:27:31

Part 3 of 4
Possible directions towards a solution. The world of shared experience and the world we actually experience; money exists in the world of shared experience and of materialism; definition of materialism; comparison of the bases of life in world of materialism and world of well-being; comparison of spiritual ideal and being fully alive; Questions: What would you do with your life if you knew you would die in one year? If you were free from trying to get your emotional needs met? If you weren't concerned with being somebody?
Duration 01:21:17

Part 4 of 4
Theoretical and practical concepts of what might be done. Traditional Buddhist method of The Noble Eightfold Path; footnote on the word "right"; four bases of success – curiosity, persistence or enthusiasm, understanding of genesis and conditions, creativity in framing questions; seven steps of manifestation; Questions: What am I going to do next week? Next month? Next year?
Duration 01:14:17

Books recommend in these podcasts:

1. Buddhist Economics: A Middle Way for the market place by Ven. P. A. Payutto (follow the previous link and you get the online version)
2. Money and the Meaning of Life by Jacob Needleman
3. How to Cook Your Life: From the Zen Kitchen to Enlightenment by Kosho Uchiyama Roshi