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The Tribune files for bankruptcy

The Tribune files for bankruptcy

The Tribune was simply over-leveraged with a balance sheet made for this age of debt, leverage and bubbles. Note the lack of equity and the enormous debt load. Why would anyone, especially someone as savvy as Sam Zell load up a declining business with this much debt? Was it greed, hubris? It seems inexplicable to me.

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2008-12-08: Pre-Market trading good

2008-12-08: Pre-Market trading good

As we get ready for another week in the markets, it bears noting that stock markets are notoriously able in shrugging off news (both good and bad) and moving as if to their own drummer. Today could be one of those days, with overseas markets up 4-6%. The Pre-Market figures look good in the U.S. as well. I had heard […]

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Links: 2008-12-08

Below are a few links to web stories you might enjoy. Other news stories can be found at our newsfeed. The newsfeed is also available via RSS. I would like to point out the story on econbloggers as particularly interesting — where’s Credit Writedowns in the article?

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Chicago Tribune near bankruptcy

In a shocking news story, the Wall Street Journal reports that the media company Tribune Company, which publishes the Chicago Tribune, is exploring bankruptcy.  While advertising revenue has contracted significantly, impacting all major media companies, it was not expected that this would lead to bankruptcy.  Below is a snippet of the Journal story. Tribune Co. is preparing for a possible […]

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Links: 2008-12-06

Below are a few links to web stories you might enjoy. Other news stories can be found at our newsfeed. The newsfeed is also available via RSS. I would like to point out the emerging market stories in particular on Eastern Europe and Asia. Those are the first three below. Following that is a good article from the economist on bad banks. This is something I have mentioned as a necessary credit crisis move in the United States in particular. See “The Swedish banking crisis response – a model for the future?.”

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Quantitative easing everywhere?

First the Fed and now the ECB and Bank of England are talking about some form of quantitative easing! Of course, if they are all going to do it, do we have a dollar crash or is it more of a crisis of confidence in fiat currencies in general? The only obvious investment conclusion I can draw from this is […]

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How much longer for dollar strength?

Despite the plethora of data that has come out recently, one thing that has occasioned very little comment is the outlook for US exports. Exports are generally not a big factor in the subset of companies involved in the ISM survey, but the plunge in export orders to 34.5 suggests that US exports, hitherto a support in an otherwise collapsing economy, could be in big trouble as well.

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Deflation in action

Here’s a good little measure to see how far we’ve fallen: Just more than 1 year ago Royal Bank of Scotland (RBS) paid $100bn for ABN Amro (80% cash). For this amount, RBS could buy:

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U.S. loses 533,000 jobs, unemployment rate up to 6.7%

U.S. loses 533,000 jobs, unemployment rate up to 6.7%

The Bureau of Labor Statistics just released this month’s unemployment report and the data were grim.  The unemployment rate rose to 6.7%, while the economy shed 533,000 jobs – the largest decline since 1974.  The result was widely expected to be bad, but yesterday we heard even more announcements of job cuts, ensuring that the unemployment rate will continue to […]

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Capital One buys Chevy Chase Bank: Another bailout freebie

I wrote a few weeks back about how your bailout money was being used for mergers and acquisitions to line bankers’ pockets instead of for making loans to desperate homeowners. After receiving $25 billion in bailout funds, Citigroup attempted to buy Chevy Chase Bank despite the fact it was near collapse. Luckily this deal was scuppered as Capital One has now acquired Chevy Chase, just as the Wachovia deal was canceled when Wells Fargo stepped in.

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Links: 2008-12-05

Snowbound Marshall is doing an admirable job running things while I sun myself in the Bahamas (rubbing it in, eh?). You may remember Marshall from his days as a writer for Prudent Bear. Please do comment on his posts as he will respond in kind.

Below is a list of a few links to newsworthy items from our newsfeed. As always, other items can be found at the newsfeed itself.

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Treasury Considers Plan to Halt Home Price Slide

Marshall here. Slowly but surely, the Treasury is beginning to move more aggressively on providing help to homeowners, as opposed to bankers. This makes sense: A financial meltdown and housing deflation cannot be cured simply by pumping money into the banking system. You also have to consider a program which provides mortgage relief to homeowners as well.

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