What’s older than yesterday’s gossip?

Yesterday’s gossips.

Doddering gossip doyenne Liz Smith and former rumor-monger Lloyd Grove get together at the Daily Beast to rue the revolution.

What has been the impact of Internet sites like Perez Hilton and Gawker, who are putting up items on an hourly basis?

I don’t think they mean anything either, except they mean instant success for these very, very energetic and ambitious young people. And it’s perfectly fine, but I wouldn’t give any credence to most of the stuff I read. I mean, there are no publishers, no editors, no lawyers vetting anything. This is the problem with the Internet where everybody has a voice and we’re stuck with it. We’re going to have the Internet even when we don’t have things to eat. We’re going to still have it. I’m all for it, and I’m doing it myself on the Wowowow.com site, but it’s not important. It isn’t even semi-important.

Turns out Smith was making $125k a year at the Post.

And here’s some video of Smith grousing about “these kids.”

Taleb writes:Go to a bookstore, and look at the business shelves: you will find plenty of books telling you how to make your first million, or your first quarter-billion, etc. You will not be likely to find a book on “how I failed in business and in life”—though the second type of advice is vastly more informational, and typically less charlatanic. Indeed, the only popular such finance book I found that was not quacky in nature—on how someone lost his fortune—was both self-published and out of print. Even in academia, there is little room for promotion by publishing negative results—though these, are vastly informational and less marred with statistical biases of the kind we call data snooping.

The hotel industry is begging Congress to not kill junkets.

NYT: “One leading European banker says a poll showed that the only groups now held in lower regard are prostitutes and convicted felons.”

Only $10 billion in Citibank shareholder left to go. Will there be anything left at 4pm?

Bloomberg:

The U.S. economy shrank in the fourth quarter at an even faster pace than previously estimated as consumer spending plunged, companies cut inventories and exports sank.

Gross domestic product contracted at a 6.2 percent annual pace from October through December, more than economists anticipated and the most since 1982, according to revised figures from the Commerce Department today in Washington. Consumer spending, which comprises about 70 percent of the economy, declined at the fastest pace in almost three decades.

The recession is forecast to persist at least through the first half of this year as job losses mount and purchases plummet. The Obama administration’s attempts to break the grip of the worst financial crisis in 70 years are unlikely to bring immediate relief as companies from General Motors Corp. to JPMorgan Chase & Co. cut payrolls.

“The economy really hit the brakes very hard in the fourth quarter,” John Herrmann, president of Herrmann Forecasting LLC in Summit, New Jersey, said before the report. “We’re in a pretty severe, protracted recession. The economy could continue to struggle into 2010.”

GDP was projected to contract at a 5.4 percent annual pace last quarter, according to the median estimate of 74 economists surveyed by Bloomberg News. Forecasts ranged from declines of 3.8 percent to 6 percent.

The 2.4 percentage-point revision was almost five times as large as the average adjustment, Commerce said.

Think getting out of this mess is going to be easy or painless? After hearing this NPR story this AM driving to work, Obama’s face on the “Hope” sticker on the car in front of me just looked pained and sad.

David Beim, a former banker who is now a professor at the Columbia Business School, has something to say for people who want to pin this whole thing on the banks.

He has a chart illustrating how much debt American citizens owe, how much we all owe — with our mortgages and credit cards — compared to the economy as a whole. For most of American history, that consumer debt level represented less than 50 percent of the total U.S. economy, as measured by gross domestic product.

And then …

“From 2000 to 2008, it’s almost a hockey stick. It just goes dramatically upward,” Beim says. “It hits 100 percent of GDP. That is to say, currently, consumers owe $13 trillion when GDP is $13 trillion. That is a ton.”

This has happened before. The chart shows two peaks when consumer debt levels equaled the GDP: One occurred in 2007, the other in 1929.

And that scares Beim.

“That chart is the most striking piece of evidence that I have that what is happening to us is something that goes way beyond toxic assets in banks. It’s something that has little to do with the mechanics of mortgage securitization, or ethics on Wall Street, or anything else,” Beim says. “It says: The problem is us. The problem is not the banks, greedy though they may be, overpaid though they may be. The problem is us.”

Gold bugs will no doubt remember that one of the key tools for jacking us out of the Depression ditch was devaluing the dollar 40% in 1933 when FDR took the country off the gold standard. Here’s a video with newsreel footage from that period. And here are a couple of charts of US private indebtedness over the last 100 years.And here’s our hope.

Michael Lewis weaves another wonderful narrative explaining another sordid, smelly corner of the meltdown:

That’s when Eisman finally got it. Here he’d been making these side bets with Goldman Sachs and Deutsche Bank on the fate of the BBB tranche without fully understanding why those firms were so eager to make the bets. Now he saw. There weren’t enough Americans with shitty credit taking out loans to satisfy investors’ appetite for the end product. The firms used Eisman’s bet to synthesize more of them. Here, then, was the difference between fantasy finance and fantasy football: When a fantasy player drafts Peyton Manning, he doesn’t create a second Peyton Manning to inflate the league’s stats. But when Eisman bought a credit-default swap, he enabled Deutsche Bank to create another bond identical in every respect but one to the original. The only difference was that there was no actual homebuyer or borrower. The only assets backing the bonds were the side bets Eisman and others made with firms like Goldman Sachs. Eisman, in effect, was paying to Goldman the interest on a subprime mortgage. In fact, there was no mortgage at all. “They weren’t satisfied getting lots of unqualified borrowers to borrow money to buy a house they couldn’t afford,” Eisman says. “They were creating them out of whole cloth. One hundred times over! That’s why the losses are so much greater than the loans. But that’s when I realized they needed us to keep the machine running. I was like, This is allowed?”

Keep climbing.

In the week ending Feb. 21, the advance figure for seasonally adjusted initial claims was 667,000, an increase of 36,000 from the previous week’s revised figure of 631,000. The 4-week moving average was 639,000, an increase of 19,000 from the previous week’s revised average of 620,000.

Social media entrepreneur Jason Calacanis says the market has bottomed, as he’d predicted.