Be Rich Blog Knowledge is the currency for success

Where’s All That Money You’ve Lost?Posted by ahc99 on October 12th, 2008

If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!

Photo by Doublep1

Everybody has been losing their shirt and putting off their retirements in light of the current financial crisis that has plunged the Dow from a high of 14,279 to the current 8,451. In just last week, investors lost $2.4 trillion and over the past year, losses total to $8.4 trillion. But where has all that money gone? Associated Press has a good article that helps explain it:

If you’re looking to track down your missing money — figure out who has it now, maybe ask to have it back — you might be disappointed to learn that is was never really money in the first place.

Robert Shiller, an economist at Yale, puts it bluntly: The notion that you lose a pile of money whenever the stock market tanks is a “fallacy.” He says the price of a stock has never been the same thing as money — it’s simply the “best guess” of what the stock is worth.

“It’s in people’s minds,” Shiller explains. “We’re just recording a measure of what people think the stock market is worth. What the people who are willing to trade today — who are very, very few people — are actually trading at. So we’re just extrapolating that and thinking, well, maybe that’s what everyone thinks it’s worth.”

Shiller uses the example of an appraiser who values a house at $350,000, a week after saying it was worth $400,000.

“In a sense, $50,000 just disappeared when he said that,” he said. “But it’s all in the mind.”

Though something, of course, is disappearing as markets and real estate values tumble. Even if a share of stock you own isn’t a wad of bills in your wallet, even if the value of your home isn’t something you can redeem at will, surely you can lose potential money — that is, the money that would be yours to spend if you sold your house or emptied out your mutual funds right now.

And if you’re a few months away from retirement, or hoping to sell your house and buy a smaller one to help pay for your kid’s college tuition, this “potential money” is something you’re counting on to get by. For people who need cash and need it now, this is as real as money gets, whether or not it meets the technical definition of the word.

Still, you run into trouble when you think of that potential money as being the same thing as the cash in your purse or your checking account.

“That’s a big mistake,” says Dale Jorgenson, an economics professor at Harvard.

There’s a key distinction here: While the money in your pocket is unlikely to just vanish into thin air, the money you could have had, if only you’d sold your house or drained your stock-heavy mutual funds a year ago, most certainly can.

So that money was never yours to being with. It was all psychological. People mistakenly believed what was shown in their retirement account balance and house appraisal as actual money that they own. However, that money was never locked in to being with, it was just the best guess estimate of how much the collective society believes it to be worth. And like all other estimates, it can vary depending on the consumer confidence. I found this part of the article to be the most interesting:

“You can’t enjoy the benefits of your 401(k) if it’s disappeared,” Jorgenson explains. “If you had it all in financial stocks and they’ve all gone down by 80 percent — sorry! That is a permanent loss because those folks aren’t coming back. We’re gonna have a huge shrinkage in the financial sector.”

If you choose, you can pour most of your money into stocks and track their value in real time on a computer screen, confident that you’ll get good money for them when you decide to sell. And you won’t be alone — staring at millions of computer screens are other investors who share your confidence that the value of their portfolios will hold up.

But that collective confidence, Jorgenson says, is gone. And when confidence is drained out of a financial system, a lot of investors will decide to sell at any price, and a big chunk of that money you thought your investments were worth simply goes away.

If you once thought your investment portfolio was as good as a suitcase full of twenties, you might suddenly suspect that it’s not.

In the process, of course, you’re losing wealth. But does that mean someone else must be gaining it? Does the world have some fixed amount of wealth that shifts between people, nations and institutions with the ebb and flow of the economy?

Jorgenson says no — the amount of wealth in the world “simply decreases in a situation like this.” And he cautions against assuming that your investment losses mean a gain for someone else — like wealthy stock speculators who try to make money by betting that the market will drop.

“Those folks in general have been losing their shirts at a prodigious rate,” he said. “They took a big risk and now they’re suffering from the consequences.”

If anybody believes that the US stock market and global economy is just going to bounce back like before and be stronger than before then they are delusional. Huge international companies such as AIG and Lehman Brothers have basically bit the dust and aren’t going to make a comeback anytime soon. This will have severe repercussions for the US economy and like the article states, we are going to have a huge shrinkage in the financial sector.

And since they have really been wiped out, how can we reach the Dow high of 14,279 that we saw just a year ago? The simple answer is that we can’t. The economy is going to need to slowly rebuild itself, it is definitely not going to just bounce back as quickly as before. Most likely we are either going to see a U or L shaped recession and not the V shaped one we saw in the dot-com crash. This is of course based on the assumption that not more banks and institutions will be failing in the near future (which truthfully, I think some more major ones will be gone before this financial meltdown is through). Overall, the global net wealth has just decreased and it has not transferred from one person to another. It is just gone into the ether. It was never really there to being with since it was just our best guess estimate.

Signs We Are Not Near a BottomPosted by ahc99 on October 10th, 2008

Photo by Petrick2008

The last few days I have been staying away from posting about the stock market. Reason is I am torn between the conventional mode of thinking and the reality that faces us now.

Historically we believe that the stock market moves in cycles. There will be bears and there will be bulls. The Dow crashes but then it will rise up higher than before. Stay true to the buy-and-hold method. When there is blood on the streets, we have hit capitulation or essentially the market bottom. When the VIX is at the highest, we are in buy territory.

Looking at all the news swirling around us, right now should be the perfect buy in opportunity. There are buy signals everywhere. From Cramer’s infamous “sell everything right now” to the Dow hitting levels that haven’t been seen since the last bear (the high 7000s), there is no wonder that based on contrarian investing there is no better time to buy.

Yet, have we really hit market bottom? Can we really use the conventional mode of thinking to determine when we should start buying index funds again? Truthfully I don’t believe so. The things that are going on right now is not like a normal stock market cycle in so many ways. The normal market timing signals and charts are no longer functional. I truly believe we have not seen anything like this since the Great Depression. Yes, I used the scary D word. But in this case it really does apply.

Why do I say we are not near a bottom even though all the conventional signs are pointing towards it? It is because there are so many problems that have not been fixed that until they are, consumer confidence will stay low and panic will continue to wash over Wall Street.

1. The global credit markets are frozen. The interest rate for bank-to-bank lending is high, showing that banks are unwilling to lend to other banks. Why? Because they fear they won’t get their loan back. There are mines buried beneath numerous banks that can explode any second and wipe out the loan. Adding in is the fact that the banks themselves don’t know if they have hidden time-bombs in their own balance sheets so they need to hoard cash in order to stay solvant and not get down-graded.
2. Small businesses have no access to credit. With banks themselves strapped for cash, there is no way they will be handing out loans as readily as before. As a result, small businesses without stable long-term prospects or good credit will probably be denied any source for additional funding. Without credit they cannot expand their businesses or make new investments. Most likely the number of small businesses will decline, with many going out of business.
3. Big companies unable to get credit. This will hit large companies too. Companies such a Sears, GE, GM, etc… have already had their credit lines cut in half or just outright denied. This will shrink their future prospects. But this will have a much greater impact on society than the small businesses. Most likely we will be seeing huge layoffs. Unemployment will run rampant as the companies need to close down plants and stores in order to keep afloat.
4. Home defaults and foreclosures are going to rise. Foreclosures have already been sweeping our nation but I don’t believe we have seen anything yet. Many of the ARMs are set to reset in 2009 and many economists are predicting it to hit the hardest in February of that year. With another wave of foreclosures wiping out neighborhoods, the price of surrounding neighborhoods will also plummet.
5. Falling sales in America. With unemployment and foreclosures on the rise while the stock market plummets wiping out investments and 401Ks, the average consumer will tighten their belt and start saving money rather than swiping that credit card. We have already been seeing that with credit card usage declining for the first time in ten years. This in turn will cause both third and fourth quarter earnings to drop and make businesses need to cut back spending. Which would then likely result in another wave of job losses.

Scary prospects? Yes I know. But this is the stark reality that we are facing right now. The global credit markets are frozen and nothing the government is doing, from injecting capital to slashing interest rates, is making any difference. These problems were causing by unfettered lending of debts and will not go away by throwing more debts at the public. Until these problems are solved, I don’t believe we will be seeing a bottom any time soon. The current actions by the government is like slapping a band-aid on a shotgun wound.

The fundamentals of our once great country are broken and now we need to rebuild it all based on trust and real measurable wealth production. Otherwise, there will be no consumer confidence. This is a process that will take years and once it happens then the market will find itself again in stable footing.

Scarily Accurate: Nouriel Roubini’s Bearish Predictions ManifestPosted by ahc99 on October 10th, 2008

Nouriel Roubini has been deadly accurate every step of the way. Back in February 2008 he had already written a 12 step outline of how he predicts the US financial crisis will unfold into a systemic financial meltdown and a severe recession. Based on how extremely accurate he has been, I see no reason the rest of his predictions won’t come to be. Below is the October 8, 2008 post from his blog revisiting his predictions made in February 2008:

It is now worthwhile revisiting these 12 steps of the financial meltdown as the events of the last few weeks and months have confirmed – literally step by step - the 12 steps that I then argued would lead us to the current economic and financial near-meltdown. I thus provide below a summary version of this paper where each of the 12 steps of this financial meltdown is reported in summary as written in the original paper.

Steps 9 through 12 are presented in their full – not summary – original version as they are the crucial final steps of this financial disaster scenario and they closely match the rapid escalation of the severe strains experienced by financial markets in the last two months. You can compare for yourself how the 12 steps outlined in that February paper match with the actual evolution of financial markets and the real economy in the eight months since that paper was written.

After reviewing my 12 steps scenario I will present below some policy recommendation that are urgently necessary now to prevent this systemic meltdown from occurring.

Here is first the February paper in a summary – but literal – version of the original (bold added):

Here are the twelve steps or stages of a scenario of systemic financial meltdown associated with this severe economic recession…

First, this is the worst housing recession in US history and there is no sign it will bottom out any time soon…

Second, losses for the financial system from the subprime disaster are now estimated to be as high as $250 to $300 billion. But the financial losses will not be only in subprime mortgages and the related RMBS and CDOs. They are now spreading to near prime and prime mortgages as the same reckless lending practices in subprime …were occurring across the entire spectrum of mortgages;…Also add to the woes and losses of the financial institutions the meltdown of hundreds of billions of off balance SIVs and conduits;..And because of securitization the securitized toxic waste has been spread from banks to capital markets and their investors in the US and abroad, thus increasing – rather than reducing systemic risk – and making the credit crunch global.

Third, the recession will lead – as it is already doing – to a sharp increase in defaults on other forms of unsecured consumer debt: credit cards, auto loans, student loans…

Fourth, while there is serious uncertainty about the losses that monolines will undertake on their insurance of RMBS, CDO and other toxic ABS products, it is now clear that such losses are much higher than the $10-15 billion rescue package that regulators are trying to patch up. Some monolines are actually borderline insolvent and none of them deserves at this point a AAA rating regardless of how much realistic recapitalization is provided…The downgrade of the monolines will also lead to large losses – and potential runs – on the money market funds that invested in some of these toxic products. The money market funds that are backed by banks or that bought liquidity protection from banks against the risk of a fall in the NAV may avoid a run but such a rescue will exacerbate the capital and liquidity problems of their underwriters…

Fifth, the commercial real estate loan market will soon enter into a meltdown similar to the subprime one…And new origination of commercial real estate mortgages is already semi-frozen today; the commercial real estate mortgage market is already seizing up today.

Sixth, it is possible that some large regional or even national bank that is very exposed to mortgages, residential and commercial, will go bankrupt. Thus some big banks may join the 200 plus subprime lenders that have gone bankrupt. This, like in the case of Northern Rock, will lead to depositors’ panic and concerns about deposit insurance. The Fed will have to reaffirm the implicit doctrine that some banks are too big to be allowed to fail. But these bank bankruptcies will lead to severe fiscal losses of bank bailout and effective nationalization of the affected institutions…

Seventh, the banks losses on their portfolio of leveraged loans are already large and growing. The ability of financial institutions to syndicate and securitize their leveraged loans – a good chunk of which were issued to finance very risky and reckless LBOs – is now at serious risk. And hundreds of billions of dollars of leveraged loans are now stuck on the balance sheet of financial institutions at values well below par (currently about 90 cents on the dollar but soon much lower). Add to this that many reckless LBOs (as senseless LBOs with debt to earnings ratio of seven or eight had become the norm during the go-go days of the credit bubble) have now been postponed, restructured or cancelled. And add to this problem the fact that some actual large LBOs will end up into bankruptcy as some of these corporations taken private are effectively bankrupt in a recession and given the repricing of risk; convenant-lite and PIK toggles may only postpone – not avoid – such bankruptcies and make them uglier when they do eventually occur…

Eighth, once a severe recession is underway a massive wave of corporate defaults will take place. In a typical year US corporate default rates are about 3.8% (average for 1971-2007); in 2006 and 2007 this figure was a puny 0.6%. And in a typical US recession such default rates surge above 10%….Corporate default rates will surge during the 2008 recession and peak well above 10% based on recent studies. And once defaults are higher and credit spreads higher massive losses will occur among the credit default swaps (CDS) that provided protection against corporate defaults. ..If losses are large some of the counterparties who sold protection – possibly large institutions such as monolines, some hedge funds or a large broker dealer – may go bankrupt leading to even greater systemic risk as those who bought protection may face counterparties who cannot pay.

Ninth, the “shadow banking system” (as defined by the PIMCO folks) or more precisely the “shadow financial system” (as it is composed by non-bank financial institutions) will soon get into serious trouble. This shadow financial system is composed of financial institutions that – like banks – borrow short and in liquid forms and lend or invest long in more illiquid assets. This system includes: SIVs, conduits, money market funds, monolines, investment banks, hedge funds and other non-bank financial institutions. All these institutions are subject to market risk, credit risk (given their risky investments) and especially liquidity/rollover risk as their short term liquid liabilities can be rolled off easily while their assets are more long term and illiquid. Unlike banks these non-bank financial institutions don’t have direct or indirect access to the central bank’s lender of last resort support as they are not depository institutions. Thus, in the case of financial distress and/or illiquidity they may go bankrupt because of both insolvency and/or lack of liquidity and inability to roll over or refinance their short term liabilities. Deepening problems in the economy and in the financial markets and poor risk managements will lead some of these institutions to go belly up: a few large hedge funds, a few money market funds, the entire SIV system and, possibly, one or two large and systemically important broker dealers. Dealing with the distress of this shadow financial system will be very problematic as this system – stressed by credit and liquidity problems - cannot be directly rescued by the central banks in the way that banks can.

Tenth, stock markets in the US and abroad will start pricing a severe US recession – rather than a mild recession – and a sharp global economic slowdown. The fall in stock markets… will resume as investors will soon realize that the economic downturn is more severe, that the monolines will not be rescued, that financial losses will mount, and that earnings will sharply drop in a recession not just among financial firms but also non financial ones. A few long equity hedge funds will go belly up in 2008 after the massive losses of many hedge funds in August, November and, again, January 2008. Large margin calls will be triggered for long equity investors and another round of massive equity shorting will take place. Long covering and margin calls will lead to a cascading fall in equity markets in the US and a transmission to global equity markets. US and global equity markets will enter into a persistent bear market as in a typical US recession the S&P500 falls by about 28%.

Eleventh, the worsening credit crunch that is affecting most credit markets and credit derivative markets will lead to a dry-up of liquidity in a variety of financial markets, including otherwise very liquid derivatives markets. Another round of credit crunch in interbank markets will ensue triggered by counterparty risk, lack of trust, liquidity premia and credit risk. A variety of interbank rates – TED spreads, BOR-OIS spreads, BOT – Tbill spreads, interbank-policy rate spreads, swap spreads, VIX and other gauges of investors’ risk aversion – will massively widen again. Even the easing of the liquidity crunch after massive central banks’ actions in December and January will reverse as credit concerns keep interbank spread wide in spite of further injections of liquidity by central banks.

Twelfth, a vicious circle of losses, capital reduction, credit contraction, forced liquidation and fire sales of assets at below fundamental prices will ensue leading to a cascading and mounting cycle of losses and further credit contraction. In illiquid market actual market prices are now even lower than the lower fundamental value that they now have given the credit problems in the economy. Market prices include a large illiquidity discount on top of the discount due to the credit and fundamental problems of the underlying assets that are backing the distressed financial assets. Capital losses will lead to margin calls and further reduction of risk taking by a variety of financial institutions that are now forced to mark to market their positions. Such a forced fire sale of assets in illiquid markets will lead to further losses that will further contract credit and trigger further margin calls and disintermediation of credit. The triggering event for the next round of this cascade is the downgrade of the monolines and the ensuing sharp drop in equity markets; both will trigger margin calls and further credit disintermediation.

Based on estimates by Goldman Sachs $200 billion of losses in the financial system lead to a contraction of credit of $2 trillion given that institutions hold about $10 of assets per dollar of capital. The recapitalization of banks sovereign wealth funds – about $80 billion so far – will be unable to stop this credit disintermediation – (the move from off balance sheet to on balance sheet and moves of assets and liabilities from the shadow banking system to the formal banking system) and the ensuing contraction in credit as the mounting losses will dominate by a large margin any bank recapitalization from SWFs. A contagious and cascading spiral of credit disintermediation, credit contraction, sharp fall in asset prices and sharp widening in credit spreads will then be transmitted to most parts of the financial system. This massive credit crunch will make the economic contraction more severe and lead to further financial losses. Total losses in the financial system will add up to more than $1 trillion and the economic recession will become deeper, more protracted and severe.

A near global economic recession will ensue as the financial and credit losses and the credit crunch spread around the world. Panic, fire sales, cascading fall in asset prices will exacerbate the financial and real economic distress as a number of large and systemically important financial institutions go bankrupt. A 1987 style stock market crash could occur leading to further panic and severe financial and economic distress. Monetary and fiscal easing will not be able to prevent a systemic financial meltdown as credit and insolvency problems trump illiquidity problems. The lack of trust in counterparties – driven by the opacity and lack of transparency in financial markets, and uncertainty about the size of the losses and who is holding the toxic waste securities – will add to the impotence of monetary policy and lead to massive hoarding of liquidity that will exacerbates the liquidity and credit crunch.

In this meltdown scenario US and global financial markets will experience their most severe crisis in the last quarter of a century.

Can the Fed and other financial officials avoid this nightmare scenario that keeps them awake at night? The answer to this question – to be detailed in a follow-up article – is twofold: first, it is not easy to manage and control such a contagious financial crisis that is more severe and dangerous than any faced by the US in a quarter of a century; second, the extent and severity of this financial crisis will depend on whether the policy response – monetary, fiscal, regulatory, financial and otherwise – is coherent, timely and credible. I will argue – in my next article - that one should be pessimistic about the ability of policy and financial authorities to manage and contain a crisis of this magnitude; thus, one should be prepared for the worst, i.e. a systemic financial crisis.

This is what I wrote in February and indeed, step by step, we have gotten very close now to this systemic financial meltdown, first in the US and now also in Europe. Last week I suggested, among many other policy options, the need for a coordinated monetary policy rate cut. That cut arrived this morning with Fed, ECB and other central banks cutting their policy rates by 50bps. This action is necessary but only cosmetic and it is too little too late. European central banks should have cut rates – as I suggested – many months ago before the recession and financial crisis became so virulent; and now 50bps for the Eurozone is peanuts at the time when a minimum of 150bps is necessary to restart the economy and unclog frozen financial markets. 50bps is also too little in the US given the damage to the real economy of the financial shocks of the last month; during the last recession the Fed cut the Fed Funds down to 1%; we are still 50bps away from that level. But at the end of this cycle – as I argued before – the Fed Funds will be closer to 0% than to 1%.

Policy rate cuts will have limited effects as they don’t resolve the fundamental problem in markets that is keeping money market spreads relative to safe rates so high, i.e massive counterparty risk. To resolve that triage of insolvent banks and recapitalization of solvent banks, together with massive injections of liquidity in non banks and the corporate sector are necessary; yesterday plan to support the commercial paper market – something I recommended last week - is a step in the right direction.

World On EdgePosted by ahc99 on October 7th, 2008

Photo by ishrona

Okay, the previous post was about a spoof cover of The Economist, but this time it is the real deal (Lol, did anyone check out the actual Economist’s website to see if it was a real cover? I sure did).

I just read the lead article from The Economist’s October 2nd, 2008 print edition and it paints a frightening reality of how the credit crisis has gone global and nothing short of a recession will ensue. Keep in mind that this article is post the $850 billion bailout that was authorized by the government.

Even if it does, that should not be a cause for optimism. Look beyond the stockmarkets, especially at the seized-up money markets, and there is little to see except bank failures, emergency rescues and high anxiety in the credit markets. These forces are drawing the financial system closer to disaster and the rich world to the edge of a nasty recession. The bail-out package should mitigate the problems, but it will not avert them.

Currently, there is no respite in sight for the credit crisis. The stock market is still in free fall and the banks are still hoarding cash, while freezing their lending practices to both other banks and customers. People are in a panic and withdrawing money from the unstable market and dumping them all into treasury protected securities. However, with all the money the government is promising to the failing corporations, we don’t know how well those securities will fare. It’s just the chance you need to take since there seems to be no other safe investment out there. The bailout bill has just passed but no way can it immediately mitigate the anxiety that has permeated society for the past few weeks. Like the old Chinese saying goes “Far water can’t save close fire.” It’s going to take a while for the money to circulate into the system and cause any type of damage control.

The crisis is spreading in two directions—across the Atlantic to Europe, and out of the financial markets into the real economy. Governments have been dealing with it disaster by disaster. They have struggled to gain control not just because of the speed of contagion but also because policymakers, and the public they serve, have failed fully to grasp the breadth and depth of the crisis.

By some measures, many European banks look more vulnerable than their American counterparts do—and that is saying quite something, given the past week’s forced sale of Washington Mutual, America’s biggest thrift, and Wachovia, its fourth-biggest commercial bank. In America, outside Wall Street, the banks have lent 96 cents for each $1 of deposits. Continental European banks have lent roughly €1.40 for each €1 of deposits. They have to borrow the rest from money-market investors, who are not especially confident just now. Some Europeans, including the British, Irish and Spanish banks, have housing busts of their own. And they must contend with the toxic American securities they bought by the billion, as well as their own slowing economies.

Western Europe is not the limit of this: the panic has also struck banks in Hong Kong, Russia and now India. And it is not just the geographical breadth of this crisis that is alarming, but also its economic depth. Because it is rooted in the money markets, it will feed through to businesses and households in every economy it hits.

The scary thing is, this isn’t just hitting the American front. The whole world is going through a global slowdown all the way from the Atlantic to the Pacific. Countless countries are now following America’s footsteps and bailing out their banks left and right from sure collapse. No reprieve can be found overseas. This isn’t that surprising though, seeing that America is still the number one superpower. Whatever disaster that hits the USA will have reprecussions felt throughout the world. In addition, with the billions upon billions of American securities that the foreign countries have bought, which has become all but worthless now, they cannot avoid the financial hit that America’s economy has been undergoing. Many countries’ finances are deeply entrenched with ours and so if we go through a financial meltdown, they won’t be able to escape one either. Welcome to globalization.

Bankers have always earned their crust by committing money for long periods and financing that with short-term deposits and borrowing. Today, that model has warped into self-parody: many of the banks’ assets are unsellable even as they have to return to the market each day to ask for lenders to vote on their survival. No wonder they are hoarding cash.

This is why those politicians who set the interests of Main Street against those of Wall Street are so wrong. Sooner or later the money markets affect every business. Companies face higher interest charges and the fear that they may one day lose access to bank loans altogether. So they, too, hoard cash, cancelling acquisitions and investments, in order to pay down debt. Managers delay new products, leave factories unbuilt, pull the plug on loss-making divisions, and cut costs and jobs. Carmakers and other manufacturers will no longer extend credit and loans will become elusive and expensive. Consumers will suffer. Unemployment will rise. Even if the credit markets work well, the rich economies will slow as the asset-price bubble pops. If credit is choked off, that slowdown could turn into a deep recession.

The crash on Wall Street will be felt through Main Street in the effects of a nasty recession. As much as I hate to admit it and would like the bastards that got us into this mess to rot in jail, I realize that this crisis is now much bigger than just some corporate executives swindling the public out of billions of dollars. If the finanical institutions that our credit market is based on collapses then capitalism itself would freeze in its tracks. Credit and loans, the lifeblood of America’s economy, will be cut and people will not be able to buy large assets such as houses or cars. Companies will not be able to make new investments or fund current expenditures without lines of credit. Unemployment will skyrocket if corporations cannot sell, make or buy.

This is dangerous territory we are navigating here and it becomes much more riskier now that it has escalated into a global problem. It is crucial now that the governments work together to deal with this crisis. This can be done either through cross-border banking and guarantees of other countries deposits or through central bank coordination of liquidity problems. Either way, only working in unison will any relief be found at a global scale. And with globalization entrenched in every aspect of our lives, there is no other way.

The Economist - September 2008 Issue: Oh Fuck!Posted by ahc99 on October 7th, 2008

If only this was real. Nonetheless, it is still awesome.

Circulating around the web is the spoof cover of The Economist’s September 2008 Issue. If brevity is really the soul of wit, then there are no other words that sum up the current financial crisis more simple nor brilliant than this: