The Oil Drum

This is a Finance Round-Up by ilargi.

We have a 'luxury' problem today. Not only was Thursday Stoneleigh’s birthday, at least 4 articles deserve our top spot. And there’s much more.

Highly regarded finance writer Mike ‘Mish’ Shedlock has a list that looks like “Peak oil survival guide Part 1”:

Drowning in Debt - How do we protect ourselves?

• Don't Buy Stuff You Cannot Afford (classic SNL video)
• Have a Years' Worth of Living Expenses in Cash
• Buy Food On Sale
• Consider Wants vs. Needs vs. Affordability
• Reduce Leverage
• Consider Retirement Plans
• Challenge Traditional Thinking

And this House testimony by Robert Kuttner is a must read:

The Alarming Parallels Between 1929 and 2007

Your predecessors on the Senate Banking Committee, in the celebrated Pecora Hearings of 1933 and 1934, laid the groundwork for the modern edifice of financial regulation. I suspect that they would be appalled at the parallels between the systemic risks of the 1920s and many of the modern practices that have been permitted to seep back in to our financial markets.

Tighter credit regulations? It’s only gotten worse!:

Subprime Delinquencies Accelerating

Subprime mortgage bonds created in the first half of 2007 contain loans that are going delinquent at the fastest rate ever.

“It’s shocking what you see,'' said Kyle Bass of Hayman Advisors LP. “Anything securitized in 2007 has got to have the worst collateral performance of any trust I've seen in my life.''

And the icing on the cake:

The Death Of Investment
_{THE GREATEST STOCK MARKET MANIA OF ALL TIME}

By comparing how swiftly money passes through stocks in relation to both gross domestic product (GDP) and total stock market capitalization, we can see how the relative importance of the stock market rises and falls over the course of the last 80 years.

Quite obviously, in 1929, nothing was more important than stocks and when the corresponding mania peaked, trading was 133% of gross domestic product stock market and 228% of total stock market capitalization. In 2000, trading was 328% of gross domestic product and 203% of total stock market capitalization, a mania fully equivalent to the madness of the "Roaring Twenties."

Today, trading is 326% of gross domestic product and 237% of total stock market capitalization. For all intents and purposes, the current environment represents the greatest velocity of trading ever seen. However, by the end of the year, we expect that the current stats will be far more extreme, a bizarre circumstance that lends itself to only one description - a continuing stock market mania, the greatest mania of all time.

From July to August, in the span of just one month, the New York Stock Exchange reported that the monthly total for dollar trading volume had risen 21.7%. Share volume surged 29.7%. The number of trades soared 39.6%. The sheer speed at which our capital markets are evolving and metamorphosing is frightening.

The theme of investment is for all intents and purposes, dead.