News round-up: 10 Sep 2008

Yesterday it was a miserable day in the market with the Dow down 280 points in America. Lehman was the watch word of the day as worries about its solvency caused the stock to fall 45%. WaMu didn’t do much better. It was down nearly 20%. Overall, the financial services took a big hit in the states.

As Far as Frannie goes, Martin Wolf says that the UK should not replicate the U.S. bailout — read it. There is a very good article on how the GSE takeover will affect the U.S. budget deficit. Oh yeah, and Bill Gross’s Pimco made $1.7 billion off of the bailout.

In the UK, the consumer is really pulling back and this downturn is looking as nasty as the one in the early 1990s.

There was not a ton of good news out there yesterday (unless you’re Bill Gross). Oil did fall under $100 as I predicted (see post). If you have a important positive story, we want to know. I do have a section on dream homes.

If you want a good laugh, check out the article about North Korea in my Odds & Ends section — supposedly Kim Jong-Il has been dead for 5 years. Kind of like the urban myth of Saddam Hussein and his many body doubles.

Dream homes
What You Get for … $1 Million – NY Times
La Jolla Tops List as Most Expensive Housing Market in Nation – Housing Wire (I’d live there)
An American Interior With a Portuguese Facade – NY Times (I am very envious)
For Sale in … Berlin -NY Times (not great shakes)
California has priciest U.S. housing – Globe & Mail
Canadian housing starts jump, led by Ontario – Globe & Mail

Fannie-Freddie Fallout
U.S. move triggers CDS default – FT
Bail-out hands Pimco $1.7bn payday – FT (Bill Gross is very happy)
U.S. Treasury Credit-Default Swaps Increase to Record, CMA Says – Bloomberg
Mortgage Rates May Fall After Fannie, Freddie Rescue – Bloomberg
Salesforce.com, Fastenal to Replace Fannie, Freddie in S&P 500 – Bloomberg
McCain and Obama differ on mortgage crisis – FT (I prefer McCain’s concept, but I think Fannie and Freddie shouldn’t exist)

US
Cost of U.S. loans bail-out emerging – FT
U.S. may be vulnerable to sovereign funds: report – Reuters
Budget outlook worsens on war, economy – Market Watch
U.S. home sales ‘decline in July’ – BBC
Dollar Trades Near 11-Month High Versus Euro as Crude Oil Falls – Bloomberg

Politics
McCain & Miss Teen South Carolina – Stefan Karlsson (hmm…)
The Palin effect: white women now deserting Obama, says survey – Guardian (that’s what I expected)
Hillary backers come to defense of Palin – Politico
Record Contradicts Palin’s ‘Bridge’ Claims – WSJ
Obama vs. McCain: Why I’m Back on the Fence – Moderate Voice

UK
Redrow cuts dividend as house orders dive – Times Online
U.S. housing solution is not a good one to follow – FT (Mr. Brown, you have been warned!)
High street washout leads to retail slump – Times Online
First-time buyers suffer as deposits climb – Telegraph
Shell lands big gas deal in Iraq – Evening Standard

Financial Services
Lehman Brothers to announce results Wednesday – Reuters
Lehman stock drops 45% on capital worries – Financial Post
Lehman Put on Watch for Possible Downgrade by S&P – Bloomberg
RBC in no rush to buy U.S. banks: Nixon – Financial Post (They were looking to buy Lehmans)
Toronto-Dominion Bank’s Clark Says `Stay Nervous’ Over Crisis – Bloomberg
Santander Said to Revive Talks on Postbank Purchase – Bloomberg (It looks like Deutsche has some competition)
AIG shares plummet on fresh mortgage market concerns – Reuters (There is reason for concern)
Wells Fargo to Take Hit on $480 Million of GSE Preferreds – Housing Wire
BankUnited Sees Regulatory Capital Status Downgraded – Housing Wire
Wachovia Cut to Underperform by Merrill – Housing Wire
Downey Gets Cease-and-Desist from OTS – Housing Wire