The Institute for Supply Management threw cold water on the assumption that we've reached bottom in this mess. In the ISM's January 2008 report they show the economy contracting at an amazing clip. This comes on top of the endless news about the monoline insurers slowly slipping beneath the waves of insolvency. And now the Financial Times warns about commercial real estate property defaults rising. Well, duh, of course businesses are going to go under if they lay off employees who then don't have money to spend. This is a downward spiral and the Fed has already blown a couple of their biggest shots at trying to halt it, without much success. Now if you want detailed info on all this, I suggest that you hop on over to The Automatic Earth and listen to what Stoneleigh and ilargi have to tell you. I'll mention the ongoing financial disaster here as I get around to writing but they cover it daily and are an excellent source of information about the ongoing collapse of the credit markets.
For those of you not paying attention, the climate news remains bad and the crude oil supply remains roughly flat with a tiny uptick at the end of 2007 but already predicted to fall again and OPEC saying they need to cut production. Huh? Wasn't OPEC the one promising to raise production if prices stayed over $70 per barrel and keep it there until it came down? I guess that was just more PR, like the eternal Saudi promise to expand production to 12 mbpd, which failed to materialize in 2004 and then in 2005 and then in 2006 and most recently in 2007.
So basically the oil plateau remains with us at the current time, the climate is growing worse, and the corruption of the American political process continues apace. Nothing new here, aside from the rapidly imploding credit collapse.
Philip Pilkington: Hjalmar Schacht, Mefo Bills and the Restoration of the German Economy 1933-1939 - Yves here. I'm a big fan of economic history (and mystified that contemporary economists so rarely take interest in it). Pilkington describes an illumina...
1 hour ago