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Links: 2009-03-25

Here are the main links. A ton more can be found in the news feed (also available via RSS). Enjoy. Dear A.I.G., I Quit – Paul Kedrosky The devalued Prime Minister of a devalued Government – Alice Cook This video is good. U.S. wrong to blame China for trade imbalance: Stephen Roach – Xinhua Buffett’s Goldman Sachs Warrants Regain Value […]

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Krugman: Geithner Plan “won’t work”

I have the same misgivings about the Public Private Partnership Investment Program that Paul Krugman does. However, I still think it could work in conjunction with all of the other stimulus being applied (at least in inducing a cyclical rebound, which seems to be the goal). Krugman does not. Watch the video to see his reasoning.

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Is the economic contraction peaking?

I believe we may be seeing the bottom here. Marc Chandler of Brown Brothers Harriman does as well. Here is what he has to say: Our baseline expectation is that the pace of contraction of the US economy probably peaked in the horrific fourth quarter of last year, which still appears subject to downward revisions. We expect a deep contraction […]

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Roubini: Nationalization “fully on the table” in Geithner’s Plan

This is yet another semi-positive post about the Geithner plan. To reiterate, I think the plan is inadequate because it assumes illiquidity instead of insolvency and is a huge gift to the financial sector. But, that does not mean it will definitely not work in conjunction with other moves by Obama. In fact, to the degree the Obama Administration has […]

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2003

Yesterday, I posted an item on Naked Capitalism about the bankruptcy of Yamaichi Securities in 1996 as testament to lingering weakness in a country’s financial sector if sick financial institutions are not dealt with swiftly. In essence, the entire Japanese banking sector remained weak for years despite multiple cyclical upturns after the Bubble Economy burst. So, let’s fast forward to […]

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A conversation about the film ‘Duplicity’ on Charlie Rose

I saw this film at the weekend and thought it was brilliant.  I highly recommend seeing it.  And if you are in an especially ornery frame of mind because of AIG and the bailouts, the film does have a nice villanous corporate angle as well. Here’s the video of Charlie Rose talking to Julia Roberts, Clive Owen and Tony Gilroy […]

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Goldman: Quote of the day – “Leopards change spots”

If you haven’t noticed, I think the Geithner Plan, while far from perfect, has a reasonable chance of success. Marshall, too, believes the plan could work as he has suggested in his last post. The optics of it are another matter. “Goldman has already said they will repay their TARP money within a month (obviously all of this negative press […]

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Since when has the Treasury ever pre-announced the exact maturities that they will buy and when?

Since when has the Treasury ever pre-announced the exact maturities that they will buy and when?

It is almost like they are trying to manipulate the market prices on a day to day basis. At best the total $300 billion is probably less than 1/5th of total treasury issuance (not counting TARP, etc, for fiscal 2010). By the way, I calculated that Treasury interest cost has decreased and is running around $250 Billion, down significantly from […]

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Fitch: Prime RMBS loss estimates way too low

This comes from Angus Robertson of Research Recap.  Expect some major writedowns here going forward: A dramatic rise in delinquencies has led Fitch Ratings to raise its average loss estimates for recent vintage jumbo prime mortgage pools to between 3 and 5 times higher than its previous estimate. Fitch’s revised average loss estimates as a percentage of the remaining pool […]

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Bernstein: America is turning Japanese

I do believe the U.S. policy response to this financial crisis is very much like the Japanese response to their crisis in the 1990s. I have a post up at “naked capitalism” making this point. I would add, however, that America is in a worse position due to its lack of exports and manufacturing and it huge current account deficit […]

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Geithner’s Plan: one of the most regressive wealth transfers of all time

Marshall Auerback here. I do not like the Geithner Plan because it is needlessly expensive. Nevertheless, it could well work. My main objection is that it constitutes the most regressive transfer of wealth in history and it’s being done BY A DEMOCRAT ADMINISTRATION!!!! Unbelievable. It has to be done this way in terms of securing funding for the banks because […]

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Credit Suisse and UBS have hands out for more capital

This comes from Swiss daily Le Temps (my translation): Credit Suisse will request the creation of additional conditional capital of 3.98 million at the General Meeting of April 24. The operation is to guarantee to the bank the “strategic flexibility” needed. Conditional capital has already been used almost exclusively for the issuance of mandatory convertible bonds (mandatory convertible notes) last […]

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