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Right now I am trying to forget that we are back to 1997 levels on the market. So, I am posting this WSJ clip about the Oscars. Overall, I guessed 4 out of 7 of the big categories right.
It was the best show in years with “Slumdog Millionaire,” a brilliant film, winning Best Picture.

UPDATE: This is another re-post given the huge bailout just administered to AIG.

I am coming out in favor of nationalization in the United States. The efforts to fix the banking system to date have failed. As a result, America is still threatened by the menace of systemic risk. In my view, this risk can only be diminished significantly by ‘pre-privatizing’ large, bankrupt institutions. I am talking about temporary nationalization of a few institutions rather than a wholesale longer-term government ownership of the banking sector. I will often use the word ‘pre-privatization’ because the word nationalization conjures up a Hugo Chavez-style asset confiscation which I believe is not accurate and clouds the picture.

Through the pre-privatization of large institutions which are effectively insolvent, trust will be restored, asset prices will find a natural equilibrium level and prudent lending can commence once again. By resisting pre-privatization in any and all forms, the Obama Administration is setting itself up for failure. In that scenario, President Obama might end up looking a lot more like Herbert Hoover than Franklin Roosevelt in American history books.

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Americans Would Be Lucky to Mimic 1990s Japan: William Pesek – Bloomberg.com
Will Germany deliver on the Faustian bargain that created monetary union? – Telegraph
U.S. economy seen starting recovery in second half of ‘09: poll | Reuters
Video: Gold May Reach $3,500 – Christopher Wood, Bloomberg.com
U.S. Bubble Collapse to Be Worse Than Japan’s, CLSA’s Wood Says – [...]

Everybody is talking about nationalization. The latest trigger is the Citi discussions with the U.S. government to convert taxpayers’ preferred shares into common equity.

Below are a few Bloomberg video clips from just this morning where experts including Marc Faber, Peter Hahn and Bloomberg’s Tom Keene talk about nationalization. It is a very controversial issue. Hopefully, these clips will give you different viewpoints on the subject.

As recession takes hold, European citizens are starting to ask questions about how they were led into this, the deepest downturn in three-quarters of a century. The leading Spanish daily El Pais published a very thoughtful article today asking how things had unravelled so quickly and so spectacularly in Spain, previously one of the fastest growing economies in Europe.

These are the same questions that one must ask in the United States, Britain and Ireland regarding their own property bubbles. And, in view of recent turmoil in astern Europe, I suspect similar answers will be sought there as well.

This first part in a series of articles lays out the statistics of bubble and bust, demonstrating the scale of the bubble in Spain and it also makes a number of suggestion as to how to prevent a recurrence. You should note that this article points out Spain’s helplessness due to its lack of control over interest rates as a key impediment to solving the problem. Below is my translation of the article:

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This news is just in from the Wall Street Journal. Obviously, all of the activity we have seen with Citi’s foreign subsidiaries of late has been in preparation for sale or nationalization. I expect this to be the big news when markets open tomorrow. Note: this will mean massive dilution for shareholders, so [...]

As a result of falling oil prices and the global financial crisis a considerable fear has developed that Dubai, which has led a very expansive building policy in recent years, would have problems servicing its debt.

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More on That Dirty Word “Nationalization” and Possible Approaches – Naked Capitalism
In Northern They Trust – Barron’s
ING’s Hommen May Consider Seeking U.S. Support After Review – Blomberg.com
‘Good Banks’ Are the Cost Effective Way Out of the Financial Crisis – Willem Buiter
Nouriel Roubini – ‘Nationalize’ the Banks
Latvia’s Government Is the Latest in [...]

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The link for the list of nominees for the 81st Academy Awards Ceremony is here.
Here are my picks:

Best Actress – Kate Winslet
Best Actor – Mickey Rourke
Best Supporting Actor – Heath Ledger
Best Supporting Actress – Penelope Cruz
Best Director – Gus Van Sant
Best Foreign Film – The Baader Meinhof Complex
Best Picture – Slumdog Millionaire

The show starts at [...]

This week’s Barron’s magazine highlights the abysmal state of the Manhattan real estate market. Manhattan was one of the last bubble markets to burst. Now, things are unraveling quickly, particularly at the high end. Some experts see another 30% down before the carnage is over. The trigger for the bubble’s bursting came in the form of Lehman Brothers, making the NY real estate market another reminder of how badly the Lehman situation was handled by Paulson, Bernanke and Geithner.