Control thoughts and you control reality

Or at least, that is what the SEC must be hoping. From Macro Man…..

At the same time, we have news that the SEC is looking at policing market rumours, particularly those surrounding the financials. Something tells Macro Man that this will be a one-way street; anyone suggesting that, for example, PIMCO and SAC have pulled Lehman’s line will face reprisals, but anyone suggesting that Warren Buffett is going to buy Lehman for $100 per share will remain unscathed. The UK has a head start on this particular slippery slope, with the FSA pursuing banking sector rumour-mongers and imposing farcically low disclosure thresholds for short interest in banks doing rights issues.

It’s all vaguely 1984-ish to Macro Man. If you use inappropriate language about a bank, they’ll do you. If you sell the wrong bank short, they’ll do you. If you wonder aloud on possible forthcoming bad news about a bank, they’ll do you. Perhaps sellside analysts should just cut to the chase and rate every financial out there with a “Doubleplusgood” rating. Who knew that MiFID stood for the “Ministry of Financial Information Dissemination.”?

Essay of the week: 7/13/08 – 7/19/08

You should read this report on Russian demographics because it is scary and it goes with an upcoming Chieftain of Seir essay.

If you are intimidated by the size of the document you can just consider the executive summary to be an essay (which it practically is) and skip the rest.) Keep in mind as you are reading it that this document was put together by Russians. As such they pulled a lot of punches because they were afraid of the government.

At least, in the executive summary they did. The main body of the text is a little more hard hitting. But it still glossed over some serious issues.

Take New York City if you must, but please don't hurt our computers

From World Net Daily….

“Several potential adversaries have the capability to attack the United States with a high-altitude nuclear weapon-generated electromagnetic pulse, and others appear to be pursuing efforts to obtain that capability,” said Graham. “A determined adversary can achieve an EMP attack capability without having a high level of sophistication. For example, an adversary would not have to have long-range ballistic missiles to conduct an EMP attack against the United States. Such an attack could be launched from a freighter off the U.S. coast using a short- or medium-range missile to loft a nuclear warhead to high altitude. Terrorists sponsored by a rogue state could attempt to execute such an attack without revealing the identity of the perpetrators. Iran, the world’s leading sponsor of international terrorism, has practiced launching a mobile ballistic missile from a vessel in the Caspian Sea. Iran has also tested high-altitude explosions of the Shahab-III, a test mode consistent with EMP attack, and described the tests as successful. Iranian military writings explicitly discuss a nuclear EMP attack that would gravely harm the United States. While the commission does not know the intention of Iran in conducting these activities, we are disturbed by the capability that emerges when we connect the dots.”

The Few, the Rich, the Doomed

It is hard to take this article too seriously–the conclusions seem too sweeping and too simple–but it is worth the amusement of this sentence alone:

“A safer environment leads to smaller families with larger offspring, but places species at greater risk of extinction, according to research.”

If that doesn’t make you smirk, you probably have never met the barbarian horde of the Ethereal Land.

Second Biggest Bank Failure in US history

Okay, so that the tittle of this post does not take into account inflation. Still, Indy Mac was not as small as most banks that have failed recently.

From Sacramento Real Estate Statistics (a blog)….

Indymac Bank officially failed a few minutes ago. The FDIC has taken it over, and will begin liquidating assets on Monday. The failure will cost the FDIC trust fund between $4 and $8 Billion. Sadly, it looks like many depositors will lose a lot of money as well.

I don’t believe that the FDIC will only lose between $4 and $8 billion on this deal. More like 10 to 16 billion. For one thing, I think they are going to keep Indymac a float for to long in hopes of finding a buyer.

Naked Capitalism has a good overview of how this will affect FDIC.

More details from Credit Bubble Stocks.