In-depth analysis on Credit Writedowns Pro.

Links: 2009-05-04

  • Chrysler’s Capitalist Pansies? – Paul Kedrosky
  • Laugh out loud funny post here about the current Sunday-night silliness emanating from certain over-heated quarters over whether the government was or was not mean to investors who didn’t want to play along on the Chrysler bankruptcy. Read the whole thing, but the mix of Loony Tunes allusions, debunking, and general skepticism is good fun

  • Chinese Manufacturing Expands – EconomPic Data

    “China’s government has been extremely successful in stimulating investment, and, combined with a sharp improvement in export orders, this has pushed the PMI back into positive territory,” wrote CLSA’s head of economic research, Eric Fishwick.

  • FT.com – Berlin issues ultimatum to Landesbanken

    “The German government has issued an ultimatum to the country’s seven Landesbanken to agree by July to consolidate the troubled state-owned banking sector or face exclusion from Berlin’s plan to take toxic assets off banks’ books. “

  • Buffett Says Citigroup Distorts Perception of Banks – Bloomberg.com

    This is a de-facto statement that Citi is banrupt, IMO. “Billionaire Warren Buffett said losses at Citigroup Inc. have distorted the public perception of U.S. banks and that lenders including Wells Fargo & Co. are better able to withstand the recession.”

  • Boston Globe’s big deadline nears without accord | Reuters

    Is the Boston Globe toast? That would be big news. “With less than two hours to go before a midnight deadline, The Boston Globe and a key union have not agreed on concessions that parent company The New York Times Co says it needs to keep the newspaper alive.”

  • FT.com – BofA and Citi in last push on stress tests

    Citigroup and Bank of America are working on plans to raise more than $10bn each in fresh capital, even as they launch last-ditch attempts to convince the US government they do not need to bolster their balance sheets.

  • Bonds Show Lehman Fades In History as Spreads Narrow – Bloomberg.com

    In the government debt market, yields on 10-year notes exceed those of two-year securities by at least 1 percentage point in all the G-7 nations for the first time since before 1991, according to data compiled by Bloomberg. The so-called yield curve typically steepens when traders anticipate a recovery.

  • FT.com: Wolfgang Munchau – Europe must learn from Japan’s experience

    Munchau thinks the Europeans have their heads buried in the sand regarding the scale off the banking crisis. I agree.

  • Michael J. Panzner: Bogus Expert/Forecast Alert

    Is Lakshman Achuthan, managing director of the Economic Cycle Research Institute (ECRI), a perma-bull who the MSM is saying called the downturn?

  • After Chrysler, Fiat plans merger with Opel to create car industry giant – guardian.co.uk

    The Italian carmaker Fiat is seeking to merge its car division with General Motors Europe and ailing US car firm Chrysler to create an automotive giant second only to Japan’s Toyota in terms of production.

  • The Need for New Antitrust Laws « The Baseline Scenario

    Even though the four largest banks hold about 60% of assets in the U.S. banking system, that’s not nearly concentrated enough to attract the attention of the DOJ. And while there may very well be illegal collusion among large banks, there is no smoking gun that I’m aware of, and you certainly wouldn’t need collusion to explain the events of the last decade, or the uniformly high prices charged for services such as equity underwriting.

  • Banks Get Tougher on Credit Line Conditions – WSJ.com

    Banks are shortening the terms on lines of credit that have long been used by companies to avoid cash crunches — a sign that while lending is reviving, businesses are facing higher costs and other hurdles to obtaining loans.

  • Thomas Hoenig – Troubled banks must be allowed a way to fail

    I can’t wait for him to become a voting member of the FOMC. “When the financial crisis began to unfold in 2007, US policymakers reacted quickly out of fear that rapidly evolving events would lead to a global economic collapse. In my view, the policy response to this point has been ad hoc, resulting in inequitable outcomes among firms, creditors, and investors. Despite taking a number of actions to stabilise markets and institutions, uncertainty continues and markets remain stressed. “

  • Brad Setser: Follow the Money » More than a grocer

    Recently China has been providing the US with more financing well in excess of what the US needs to pay for its imports from China. Most grocers don’t provide store credit to help fill up their customers’ pick-up, especially grocers that don’t own any gas stations. Yet back when oil prices were here, China was in effect lending the US some of the funds it needed to cover its deficit with the oil-exporting economies – and with other goods-exporting economies as well.

About 

Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty years of business experience. He is also a regular economic and financial commentator on BBC World News, CNBC Television, Business News Network, CBC, Fox Television and RT Television. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College. Edward also writes a premium financial newsletter. Sign up here for a free trial.