financial links

select links to ponder:

Krugman ponders lack of leadership and consensus at G7 meeting

Naked Capitalism ponders the Lehman Bros CDS auction

Steve Hsu at Information Processing has more on Lehman CDS auction - somebody is paying a couple of hundred billion or so to other people by Oct 21 - if they don't have the cash to do so, then there will be cascading defaults due to counterparty failures. Basically people making bets without having the reserves or assets to honor them in case the bet goes bad.

ex-investment banks tightening hedge fund margins?

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If the US assumes liability for Credit Default Swaps issued by financial institutions, its potential exposure is many times its gross domestic product. If the US does not take on this liability it risks annihilation of the modern financial system. The only solution is to seize both sides.…
so apparently insurance conglomerate giant AIG is on the verge of bankruptcy, again, despite something of order $200 billion bailout from the US, which now owns 79.9% of the company the news solution is to request the US government guarantee the outstanding CDS that AIG issued I propose a solution…
So, the financial questions keep coming. I'm avoiding a lot of them, because (A) they bore me, and (B) I'm really not the right person to ask. I try to stay out of this stuff unless I have some clue of what I'm talking about. Rest assured, I'm not spending all of my blogging time on this; I've got…
so what happened in Iceland, where are things headed, and is it a one-off microsystem gone off the rails, or a bellwether for the developed world Iceland was a dirt poor fish+agriculture economy, under external Danish rule until 1944 when it unilaterally declared independence, the Danes being…

Ohhhh, that last one is interesting.