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New Meetup: The Economy: So What's Going on Now

From: Dyutiman D.
Sent on: Monday, March 23, 2009 10:53 PM
Announcing a new Meetup for Prague Spring, NYC Chapter!

What: The Economy: So What's Going on Now

When: April 7,[masked]:30 PM

Where: Click the link below to find out!


The Economy has worsened since we last discussed the bailout. In this meetup we will discuss the continuing saga.

You can brush up on the financial crisis from This American Life's fascinating narration on the housing bubble, the worsening economy and now bank solvency. Here's our earlier discussion on the bailout (mainly TARP). Finally, from my favorite blog, financial crisis for beginners.

Enough homework, so what's going on now? Before diving into the micro-details what is the macro picture. Early last year Krugman warned about the coming currency crisis. Has it finally arrived? Basically Chang the Chinese plumber is having second thoughts about financing Joe the plumber's quarter million dollar American dream. So basically the United States is hostage to all prospective investors who are needed to fill the current account deficit which will keep increasing in the near future. In this light, GM and other industries are dispensable, but the finance industry which ties together all these global investors is not.

This is the backdrop of the AIG story. Not only are they involved in these toxic CDSs (I'll go over that in the discussion), but also regular institutions are deeply exposed to AIG through non-toxic regular insurance. Thus collapse of AIG basically brings down the financial system, and with it confidence in U.S. leadership and destination of global capital.

The current situation is evolving so rapidly, that I might have to update this page. Here is an extremely detailed look at bank solvency and a contradictory view of Krugman. Bottom line is all these experts are speculating, and it's still hazy who might be right and if the latest Geithner "plan" and the accompanying rally (Dow up 500pts) is any indication for actual recovery.

Nationalization seems to be the option of choice from liberals like Krugman to libertarians like Greenspan, while an anathema to the Obama administration. We will discuss what the Geithner "plan" does, but following the hoopla over AIG bonuses and performance of Congress many are having second thoughts about nationalization.

We'll touch upon executive compensation since this has been the focus of so much attention. Here's one of the few reasoned arguments against compensation. And just for kicks, even Client No. 9 has an opinion (but not on the only subject we would want to hear from him).

We will probably have to reserve the stimulus for another session.

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