Financial News: 2009-12-23

• Watchdog fines Depfa €250,000 over suspected breach of rules – Independent.ie
• Gold slumps to seven-week low
• Geithner Voices Confidence About Economic Rebound : NPR
• FT.com – Glencore bond deal paves way for IPO (For a company that looked headed for collapse this time last year, this is a remarkable turnaround – thanks to a rebound in commodity prices. An IPO is definitely the way to go as it will prevent a cash crunch should prices fall again.)
• 2010: The Year to Focus on Sovereign Debt | The Big Picture (This analogy between Euro-dependent sovereign nation and U.S. state is one I have already made between California and Ireland. Here David Kotok makes it for Greece and California.)
• Brad DeLong’s Dangerous Modeling, Arnold Kling | EconLog (Notice how DeLong’s model has Austrian economics overtones)
• Why Aren’t Banks Lending? They Are Being Rational | The Big Picture (If you are worried at all about the "quality" of your capital and not the "quantity" it would still be prudent to cut off lending to those you deem not credit worthy. For the sake of argument, call this behavioral economics in action. This is what the D-process is all about.)
• “Body Count From Goldman Actions Crosses Into Criminal Territory” « naked capitalism (How a bet on the housing bubble popping came a cropper for Goldman via AIG’s failure and how Goldman was subsequently bailed out.)
• Picking Up Nickels in Front of the Steamroller: A Simple and Partial Finger Exercise – J. Bradford DeLong’s Grasping Reality with a Prehensile Tail (A model of how monetary accommodation leads to increased risk taking in financial markets)
• FT.com | Economists’ Forum | Martin Wolf answers your questions: Topic three – Banks refusing to lend (Supply side of credit is stuck in a non-equilibrium state. The psychology of a balance sheet recession dynamics at play.)
• ‘New Normal’ Tops 2009 List of Overused Phrases: Caroline Baum – Bloomberg.com
• FT.com – Sovereign risk tops bankers’ 2010 fears
• The Temporary Income Hypothesis – Annaly Salvos (Hat tip Scott)
• Fund Boss Made $7 Billion in the Panic – WSJ.com
• Fitch warns that Britain and France risk losing their AAA rating – Telegraph
• Charles Goodhart warns of return to recession as bank lending falls – Telegraph
• Ten thoughts on the past decade in equities – Abnormal Returns
• Ackman Says General Growth Shares Are Undervalued – Bloomberg.com

Distraction of the Day: Windows 7’s interesting Swiss advert