Jason's Log

Understand how breakdowns in the Commercial Paper and Credit Default Swap markets got us here

Over the past few weeks, I have been searching for a good resource to help me understand the chain of events that started with the sub-prime mortgage crisis evolved into a $700B federal bailout. Although I do not claim to be any sort of expert on the subject, this episode from This American Life featured quite a few of them:

365: Another frightening show about the economy

Ira Glass and friends do an especially good job of linking the collapses of AIG and Lehman Brothers into the bigger pictures of the mortgage crisis and credit crunch. Definitely worth listening to, and really very frightening at times.

Is 1.9% GDP growth a good sign or a bad one?

My Netvibes home page gave me a chuckle today in the titles each chose for their headline story on the recently released GDP value (1.9%). Notice the slight difference in tone between the two:

Did the CEO of Ford Motor Co. just admit to peak oil?

In the press release accompanying Ford's announced production cutbacks was this little gem from Ford CEO Mulally:

"We view the move to smaller, more fuel-efficient vehicles as permanent, and we are responding to customer demand," Ford CEO Alan Mulally said in the statement.

Permanent? I read this as an indicator that Ford believes the price of fuel is going to remain high for the foreseeable future. In the automotive industry, for which product cycles are in the half-dozen-year range, this statement implies that Ford does not see gas prices dropping any time in the next decade. The only thing missing from this announcement is any mention of a next-generation vehicle from Ford - plugin-hybrid, hydrogen fuel cell  or all-electric.  By the time Ford figures this out I should be driving my Aptera Typ-1!