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Irish government unveils plan to recapitalise banks

Today the Irish government has unveiled a 10 billion euro plan to recapitalise its outsized banking sector. I have posted a number of times about the depth of woes in Ireland including the high debt-to-gdp level, the crashing property sector and the steep decline in government revenues. I have also highlighted the fragility of the Irish banking sector. Ireland is a small nation that is heavily dependent on financial services as an economic engine. It’s financial sector is much larger than the government can reasonably support. This makes the country very vulnerable to a loss of confidence in its banking sector.

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Russia devalues currency again as foreign reserves plummet

Russia is one country that we do not want to see fall on hard times. It has great geo-strategic power, but a weak economy, declining oil output and revenues and increasingly autocratic rule? Now it is being roiled by the global financial crisis as hot money is fleeing the country causing its currency to plummet and its stock market to swoon. Russia has used up a quarter of its massive foreign currency reserves to stabilize the situation — to no avail. Is Russia about to become a problem?

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Links: 2008-12-14

Hello again and happy Sunday reading. I have the useful rubbernecking fascination with Bernie Madoff again today. But, my focus is a bit different today. You will see a lot of stories about the UK. In the wake of the massive $11 billion writedown by HBOS on Friday, there is a lot of news coming out of the UK and all of it is bad.

Otherwise, it’s a Potpourri from around the net. Other news stories can be found at our newsfeed. The newsfeed is also available via newsfeed. The newsfeed is also available via RSS.

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Latest update on Bloomberg suit against Fed

Back in November, Bloomberg News was forced to sue the Federal Reserve to gain greater disclosure on how emergency loans were being made to financial institutions and on what collateral was being used. I have followed this story closely and will continue to update you on its progress.

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Links: 2008-12-13

I continue to be impressed by the absolute magnitude of the Madoff scandal. This Ponzi scheme went on for decades. It is a truly frightening spectacle. See some of the articles below. Otherwise, it’s a Potpourri from around the net.

Other news stories can be found at our newsfeed. The newsfeed is also available via RSS.

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Macro Maven: Expect a long difficult recession

Stephanie Pomboy is an economist who specializes in macroeconomic forecasting and their implications for investors and she has some very bad news for those looking for a quick recovery: it’s not going to happen. In Barron’s latest issue, Pomboy makes the case for an extended downturn (hat tip Scott) and that makes for a challenging investment climate. However, all is not lost, as Pomboy sees the potential for a rally in high yield assets and even equities.

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FDIC shuts down Haven Trust and Sanderson State

Another Friday night in America means another bank goes bust. This week, it’s two banks: Haven Trust of Georgia nd Sanderson State of Texas. BB&T is stepping in for the deposits at Haven Trust. And Pecos is taking the deposits at Sanderson. These banks are small, so this is not earth-shattering news.

Below are the pertinent details and links back to the FDIC website.

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Writedown News: 12 December 2008

It’s been a month since I updated my list of writedowns and other credit crisis-related news, so I am sure that this list is filled with holes and missing information. Here it goes nonetheless.

Below are the writedowns from the previous month. These links are compiled in the credit crisis timeline.

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Links: 2008-12-12

It’s Friday and the madness must come to an end. I don’t have a lot on the table so I’ll leave you with just the usual links. I would say the Madoff stuff is pretty unbelievable. See the first four articles to see what I mean. Other news stories can be found at our newsfeed. The newsfeed is also available […]

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A brief philosophical argument about the role of government, stimulus and recession

A brief philosophical argument about the role of government, stimulus and recession

I was chatting with Marshall Auerback about some of my recent posts on Keynesianism and Austrian Economics — Marshall is a Keynesian — and he convinced me that my posts were somewhat misleading and that I had only presented half of the argument for stimulus. This led me to thinking about the role of government, stimulus and recession which I felt compelled to present here.

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Nouriel Roubini: Will massive stimulus ward off stag-deflation?

I am certainly of the view that a considerable worsening of the recession is baked in the cake for 2009. But will fiscal and monetary stimulus prevent worst case scenarios? I certainly hope so, as I have laid out in recent posts. But, don’t take my word for it. The RGE Monitor headed by Nouriel Roubini, the omni-present Professor of […]

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Distraction of the day: “The Reader” with Kate Winslet

December is a big month for Hollywood as some of the biggest and most critically acclaimed movies come out in December. One such movie is “The Reader” starring Kate Winslet. I am a big fan, so I thought I’d provide you with a little distraction from the usual fare of dismal economic news with a short clip from the film.

Enjoy.

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