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RSS icon Comments on Economic Apocalypse Data for 10/10/2008


Kudos for highlighting more relevant data than the Dow.

That said, your commentary is rather debtor-biased. If you have piles cash to lend, a higher TED spread and higher corporate bond yields are a good thing.

Posted by David Wright | October 10, 2008 1:43 PM

See, this is why the economy is so bad, we've got way too many math majors with MBAs like Comrade Bush messing things up, when any real business person knows the key things that matter are only two:

1. Free Cash Flow


2. Price/Equity

You can argue leading PE versus trailing PE or the use of Price/Sales, but it all comes down to those two.

Great buying opportunity, actually, especially once the Red Bushies get tossed out of our White House.

Posted by Will in Seattle | October 10, 2008 1:44 PM

You need to move your figures one decimal point to the right in the mattress index category. There are 100 basis points to a percentage point.

Posted by Andrew | October 10, 2008 1:47 PM

Okay, good. Now that my fear has a name ...

Oh, never mind. Now I'm just all scared AND jargony.

Posted by sw | October 10, 2008 1:48 PM

You need to compress all this info down into your own number and name it after yourself. I want anchors to be saying "Oh sweet jesus the market is down by 1000 Golobs!!!"

Posted by Dubcek | October 10, 2008 1:48 PM

I like this, especially the easy to understand explanations with examples. Although the subjective panic level runs off with the prize. :D

Posted by Nay | October 10, 2008 1:48 PM


Thanks! Egads. I initially had this as a ratio, and at the last moment decided to make it a spread in basis points. I've corrected my excel worksheet and the post now.

Posted by Jonathan Golob | October 10, 2008 2:01 PM

Put the LIBOR in there with the TED so we can see where the points are.

Posted by Fnarf | October 10, 2008 2:08 PM

LoL! Thanks for the funnies.

When I moved out here from Long Island they told me I'd be sorrounded Christian idiots and hicks. At least The Stranger is a stong Jewish voice for New York transplants.

We studied the stock market in Hebrew school and my parents invested all my Bar Mitzvah cash in tech stocks.

The one thing Rabbi taught was take a long term approach in the Stock Market. I'm 34 and have plenty of years till retirement. To me this is the time to buy, but, buy.

Also I'm looking to pick up some more investment real estate. I figure plenty of those sub-prime mortgages are in the Central District. Anyone seen any bargan properties there. I can get plenty of cash from my parents if the property is a good value.

Posted by Issur | October 10, 2008 2:16 PM

"you're all dead", said the TED Spread

Posted by mnm | October 10, 2008 2:23 PM

Here you go...

Discount rate & spread are of particular interest. Short story: There was a thriving market for Commercial Paper (an unsecured promise to back a loan within 270 days). Its now all but closed.

On, and you need more Beeker.

Posted by moxietex | October 10, 2008 2:25 PM

Issur, if you're 34, why are you still sucking on your parent's tit?

Posted by Bellevue Ave | October 10, 2008 2:28 PM

Lots of bad news but also a few hints that it might be getting a bit better.

You noted a few days back that Massachusetts was thinking of going to the feds for money, their bond sales went OK this week, better than expected, and now California is backing away from the idea that they may need help is well.

Also, there have been some slight improvements in short-term commercial paper rates (see the second page of the story for the actual rates)

It's still pretty dark but glimmers of light in the far distance, I think the talk of direct recapitalization of banks and getting involved in the CP market are starting to move the needle a little.

On the down side, it looks like Morgan Stanley may need to be rescued in the next few days, and the Ford/GM are on the brink as well.

Posted by bob | October 10, 2008 2:43 PM

Well done, Mr. G.!

Posted by tomasyalba | October 10, 2008 3:23 PM

Stix on funds flow out of mutual funds and money market funds would be good panic indicators.

@ 1 - A higher TED spread is a good thing for lenders, ESPECIALLY if you don't care whether you get paid back. The risk of nonpayment is what pushes up the LIBOR.

@ 2, Will is an idiot, and in particular, Will is an idiot who doesn't know "Equity" from Earnings ... which in any case is hardly what a "real business person" is losing sleep over this week.

Posted by RonK, Seattle | October 10, 2008 3:40 PM

So that's four Beakers out of how many?

Posted by keshmeshi | October 10, 2008 3:46 PM


Good question. I care not to find out, honestly.

I conceived it as a log(2)-base scale, normalized to the following data points in my head:
a) Activation of the LHC (1 nano-beaker.)
b) Reelection of GWB in 2004: 7 beakers.
c) Waking up to NPR, saying "with the incapacitation of President McCain, the inauguration of President Sarah Palin will occur later this afternoon": 8 beakers.
d) Last week, when Ca and Mass couldn't sell their bonds: 6 beakers.

I am actually trying to fashion a mathematically determined beaker "panic" scale, stripping out this subjectivity.

Thank you to Fnarf, RonK and moxietex for your suggestions.

RonK: Do you have a link to such data?
moxietex: In retrospect, it seems more like a five or six beaker day, doesn't it?

And a word on trolls. Issur is pretty fantastic, but my deepest love is for Lord Basil. Kudos to anyone who can deploy the phrase "homosexual, Muslim, Marxist"

Posted by Jonathan Golob | October 10, 2008 4:03 PM

Whoops! The AP is reporting that comrades Bush, Paulson and Bernanke have decided to nationalize the banking system after all.

Well, dosvedanya Milton Friedman and capitalism as we know it!

The invisible hand just gave us a hammer and sickle.

Posted by Original Andrew | October 10, 2008 5:54 PM

Here's a link to the Fed's commercial paper data, interesting stuff -

Posted by bob | October 10, 2008 7:46 PM


Posted by Morgan | October 13, 2008 3:22 AM

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