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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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Bernanke urges more to be done on housing crisis

Quite a punchy speech from the Fed Chairman, especially the conclusion, which suggests big support ahead for housing:

In this regard, reducing the number of preventable foreclosures would not only help families stay in their homes, it would confer much wider benefits. Significant efforts have been taken in this direction, but more can be done.

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More on California Housing data

Marshall here, as Ed is busy sunning himself in the Bahamas, whilst I am stuck in snowy Denver! It sounds as if JMP Securities has also read the California report that I discussed recently. This is the first outside source that I have seen respond to that report.

It is so ironic. I think that the blue collar areas that were the most in danger financially have been corrected, perhaps even over corrected and yet the markets are focused on other things even though, housing was always what America’s monetary and fiscal authorities were looking to cure for the financial system to stabilize.

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Jobless claims data tell a mixed story

Jobless claims data tell a mixed story

U.S. Jobless claims are out again and the data are mixed. The past week saw a drop in seasonally-adjusted claims from 530,000 to 509,000. Meanwhile, continuing claims rose on a seasonally-adjusted basis from 3,962,000 to 4,087,000. While the data are mixed, we should still expect a large job loss when the unemployment number is released at 8:30AM ET tomorrow. Many are expecting upwards of 300,00 job losses and an unemployment rate of 6.8% or higher.

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Links: 2008-12-04

I wanted to leave you all with a few links to interesting articles while I am away on holiday.

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