Charts in the Babson Style for 8 September 2008

Word For The Day: State Capitalism

State capitalism, in its classic meaning, is a private capitalist economy under state control. This term was often used to describe the controlled economies of the great powers in the First World War.

In more modern sense, state capitalism is a term that is used, sometimes interchangeably with state monopoly capitalism, to describe a system where the state is intervening in the markets to protect and advance interests of Big Business. This practice is in sharp contrast with the ideals of free market capitalism.

State Capitalism


Also See: Industrial Policy, Mercantilism, Crony capitalism

Jim Rogers' Reaction to the Bailout of Fannie and Freddie

Saturday, September 6th, 2008
Jim Rogers: How the Federal Reserve Will Fail and the One Sector Every Investor Should Be In
Keith Fitz-Gerald

VANCOUVER, B.C. - The U.S. financial crisis has cut so deep - and the government has taken on so much debt in misguided attempts to bail out such companies as Fannie Mae and Freddie Mac - that even larger financial shocks are still to come, global investing guru Jim Rogers said in an exclusive interview with Money Morning.

Indeed, the U.S. financial debacle is now so ingrained - and a so-called "Super Crash" so likely - that most Americans alive today won’t be around by the time the last of this credit-market mess is finally cleared away - if it ever is, Rogers said.

The end of this crisis "is a long way away," Rogers said. "In fact, it may not be in our lifetimes."

During a 40-minute interview during a wealth-management conference in this West Coast Canadian city last month, Rogers also said:

Why U.S. Federal Reserve Chairman Ben S. Bernanke should "resign".

How the U.S. national debt - the roughly $5 trillion held by the public -
essentially doubled in the course of a single weekend.

That U.S. consumers and investors can expect much-higher interest rates - noting that if the Fed doesn’t raise borrowing costs, market forces will make that happen.

Which stocks he’s holding onto for the rest of the year

Jim Rogers Interview on Money Morning

Meredith Whitney Cuts 2008 View for Goldman Sachs

We'll start seeing the broker banks reporting earnings soon, with Lehman of special interest reporting on September 18.

Oppenheimer Cuts 2008 View for Goldman Sachs, Merrill, Lehman
Mon Sep 8, 2008 9:11am EDT
Reuters

Sept 8 - Oppenheimer's Meredith Whitney lowered her 2008 estimates for four large U.S. investment banks, citing higher writedowns, lower trading volumes, weak global equity markets and lower advisory and underwriting revenue.

Whitney expects Lehman Brothers and Merrill Lynch to take a total writedown of $4 billion and $8.2 billion, respectively, in the third quarter, tied to residential-mortgage and commercial-mortage related positions, and leveraged finance exposures.

The trading volumes for the equity markets and fixed income were weak in the third quarter of 2008 and the major global indices continue to be down more than 9 percent for the year, she said. "As Goldman Sachs revenues are relatively the most equity-linked of its broker peers, the fact that broad global equity market indices are all down double-digits will have a meaningful effect on the company's earnings," Whitney wrote.

The analyst maintained her third-quarter estimates for Morgan Stanley but lowered her estimates for Goldman, Lehman and Merrill.

(Reporting by Ratul Ray Chaudhuri in Bangalore; Editing by Himani Sarkar)