Bank "Stress Tests";Private Equity Down 15-50%;Wall Street Journal Writer on "End of Wall Street As We Know It"

"Big investors like pension funds and endowments, licking their wounds from miserable returns last year, are bracing for more.

"In the next few weeks, private-equity firms -- which buy companies, take them private, restructure and resell them -- will report declines of 15% to 50% for the fourth quarter of 2008 amid the deep economic recession, analysts and investors say. Two big private-equity firms already have reported sizable declines in the value of their hard-to-price holdings.

"Those drops in turn will further batter the performance of public pension funds, foundations and endowments. These institutional investors had barreled into private-equity investing ..." Big Investors Face Deeper Losses As Private-Equity Shops Revalue Assets, Institutions Brace for Worst - Mar 2009

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"'I don't think there is a pass-fail on the stress test,'" a government official said. "'This stress test is not a test for who is insolvent or not.'"

"Rather, government officials say the tests will be used to gauge how much extra capital big banks might need as a buffer to continue lending through the economic downturn. The Treasury Department said Tuesday that it would invest an additional $100 billion and $200 billion into banks on top of the $250 billion it has already said it would put in.

"Lawmakers, analysts, and some bankers argue the banking system is worse off than many acknowledge. David Burg, a portfolio manager at Alpine Mutual Funds in Purchase N.Y., said a severe stress test could show that 98% of banks "need a lot more capital." Reviews, 'Stress Tests' May Reveal Deeper Bank Troubles - Feb 2009

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"Written by seasoned financial writer Dave Kansas, The Wall Street Journal Guide to the End of Wall Street as We Know It makes sense of the madness, revealing how the crisis is affecting our financial lives and what steps we should take to inform and protect ourselves. This comprehensive, practical and accessible book delivers:

  * An inside look at the financial wizardry, easy money and overconfidence that drove the subprime crisis, credit crunch and market meltdown

  * An analysis of the New World Order—the banking behemoths, the government's role—and how it will affect Main Street

  * A look at what's safe: a rundown of which investments are protected and which aren't and how fund protection has changed

  * Individual investor strategies: stocks, bonds, retirement and real estate (and whether you should think seriously about 'the mattress') ...

"Dave Kansas is Editor at Large of FiLife.com, a new online personal finance joint venture between Dow Jones and IAC Corp. Prior to that, Kansas spent four years as editor of The Wall Street Journal's Money & Investing section and was editor in chief of TheStreet.com during its formative years, and he is the author of two previous books, The Wall Street Journal's Complete Money & Investing Guidebook and TheStreet.com Guide to Investing in the Internet Era. He and his wife, Monica, live in New York City." The Wall Street Journal Guide to the End of Wall Street as We Know It: What You Need to Know About the Greatest Financial Crisis of Our Time--and How to Survive It (Paperback)

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When economy bottoms out, how will we know?

"... the economy always recovers. It runs in cycles, and economists are watching an array of statistics, some of them buried deep beneath the headlines, to spot the turning point. The Associated Press examined three markets — housing, jobs and stocks — and asked experts where things stand and how to know when they've hit bottom.

"None of them expects it to come anytime soon." When economy bottoms out, how will we know?

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Robert Johnson, Amy Domini, Daniel Gross

"Bill Moyers talks with economist Robert Johnson, who decodes this week's news on the bank bailout, with a hard look at the international ramifications of the plan and a discussion of why nationalization has become a flash point."

"Robert Johnson, former managing director of Soros Fund Management and an expert in emerging markets, believes the government's approach ... wastes taxpayer money and won't solve the financial crisis. The government's approach, Johnson argues, is too cautious. Recent developments in Central Europe only reinforce that the world faces a possible economic collapse, Johnson told Bill Moyers on the JOURNAL, in which 'the architecture of the integrated world would be shattered.'"

"Johnson calls for more drastic intervention, but thinks nationalization is the wrong word, 'People talk about nationalization. I just call it restructuring. Restructuring is a part of capitalism. That's how the airlines get restructured when they go through bankruptcy. Or you might have to deal with the auto industry, how you deal with venture capital projects. Do the same thing with the banks.'" Robert Johnson, former managing director of Soros Fund Management and Former Chief Economist of the Senate Banking Committee



"In this struggling economy, boomers are rightfully worried about the funds they were counting on to carry them through the rest of their lives. Will they be able to afford their own retirement?



"NOW turns to two experts for help and insight: Amy Domini, a pioneer in the field of socially responsible investing; and journalist Daniel Gross, who covers the economy for Slate and Newsweek." "Retirement at Risk" - Amy Domini of Domini Social Investments and Daniel Gross of Newsweek On PBS' Now

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Volcker, Soros: Where Have All the Fundamentals Gone?

Paul Volcker, George Soros: A faster slide, worldwide, than in the Great Depression:

"'One year ago, we would have said things were tough in the United States, but the rest of the world was holding up,' Volcker told a conference featuring Nobel laureates, economists and investors at Columbia University in New York. "'The rest of the world has not held up.'"

"In fact, the 81-year-old former chairman of the Federal Reserve said, "'I don't remember any time, maybe even the Great Depression, when things went down quite so fast.'" "Economic Crisis May Be Worse Than the Great Depression"



"NEW YORK (Reuters) - Renowned investor George Soros said on Friday the world financial system has effectively disintegrated, adding that there is yet no prospect of a near-term resolution to the crisis.

"Soros said the turbulence is actually more severe than during the Great Depression, comparing the current situation to the demise of the Soviet Union.

"He said the bankruptcy of Lehman Brothers in September marked a turning point in the functioning of the market system.

"'We witnessed the collapse of the financial system,'" Soros said at a Columbia University dinner. "It was placed on life support, and it's still on life support. There's no sign that we are anywhere near a bottom.'" "Soros Sees No Bottom For Financial 'Collapse'"



Fears of massive migrations, extended world wars - due to climate change:

"CAPE TOWN, South Africa — If we don't deal with climate change decisively, "'what we're talking about then is extended world war,'" the eminent economist said.

"His audience Saturday, small and elite, had been stranded here by bad weather and were talking climate. They couldn't do much about the one, but the other was squarely in their hands. And so, Lord Nicholas Stern was telling them, was the potential for mass migrations setting off mass conflict.

"'Somehow we have to explain to people just how worrying that is,'" the British economic thinker said." "Lord Nicholas Stern Paints Dire Climate Change Scenario: Mass Migrations, Extended World War"



Meanwhile Obama goes for halving the national debt within 4 years:

"President Obama is putting the finishing touches on an ambitious first budget that seeks to cut the federal deficit in half over the next four years, primarily by raising taxes on businesses and the wealthy and by slashing spending on the wars in Iraq and Afghanistan, administration officials said." "Obama to Unveil and Ambitious Budget Plan"



"Federal Reserve Chairman Ben Bernanke takes center stage this week, as he goes up to Capitol Hill to present the Fed’s twice-yearly Monetary Policy Report to the Congress. Current circumstances are starkly different from those surrounding the Fed’s last report in July. Back then, the Fed projected the economy would grow between 1% and 1.6% in 2008 and between 2% and 2.8% in 2009, while it was concerned about energy-fueled inflation. The numbers Bernanke will present to the Senate Banking Committee on Tuesday will show the economy contracted about 0.5% last year, along with a projected decline between 0.5% and 1.3% this year. And now the Fed’s worry is deflation, not inflation." "Vital Signs: Bernanke Speaks to Congress"

"He told politicians on Capitol Hill that if White House fiscal stimulus proposals and the continued financial assistance from the Fed have their desired effect, the American economy should begin to grow again in the second half of this year.

"Mr Bernanke said: 'Only if that is the case, in my view there is a reasonable prospect that the current recession will end in 2009 and that 2010 will be a year of recovery.'" "Ben Bernanke: best hope is recovery in 2010 -
The Federal Reserve chairman said that the US economy will only recover if Washington’s bail-out plans succeed this year"

Bernanke's predictions about housing are reviewed along with forecasts by Greenspan and others about housing back in January 2008:

"Check out this story over at CNN/Money about just how bad some economists did with their 2007 housing predictions. Of course the nation's last two chief economists, Alan Greenspan and Ben Bernanke are at the top of the list." "Bad Housing Predictions of 2007"

"The Fed expects the jobless rate to rise to close to 9 percent this year, and probably remain above normal levels of around 5 percent into 2011. The recession, which started in December 2007, already has killed a net total of 3.6 million jobs.

"Fed policymakers think that a 'full recovery' of the economy is likely to take more than two or three years, Bernanke said." "Fed chief: U.S. suffering 'severe contraction'"

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