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Too big to rescue

Too big to rescue

After Iceland collapsed and went into Depression, there were a number of reports in the press regarding countries with outsized financial sectors. The worry was that the collapse of Iceland was not an isolated incident, but rather a harbinger of things to come for smaller countries with large financial sectors. I wrote a post in November called “Iceland: a cautionary tale for small nations” which pointed to a number of countries that I considered vulnerable including Austria, Denmark, Ireland, Sweden and Switzerland. Even the United Kingdom has been a concern.

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Links: 2009-02-15

Burris Says Was Asked to Raise Funds for Blagojevich – Bloomberg.com Just how big are the UK banks – UK Bubble (Alice Cook is all over this one — and it’s not just about RBS. Thanks for the link, Alice.) Royal Bank of Scotland paid sports stars £200 million to entertain clients – Telegraph (I love writing about RBS, it’s like Citigroup in […]

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Roland Burris: more political tomfoolery in the U.S.

A recent note from Time Magazine’s blog, Swampland: This looks real bad, both for Roland Burris and his country. First a quick recap: Burris gets appointed to the Senate by Rod Blagojevich, a self-made cartoon of political ineptness and alleged corruption. The U.S. Senate won’t seat Burris until he testifies under oath that he is unblemished by the Blagojevich stain. […]

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How do the Presidents rank?

C-Span ranks the former Presidents: Honest Abe gets top billing, follwed by Washington, FDR, Teddy Roosevelt and Truman. How did the George Bushes, Bill Clinton, and Ronald Reagan do? Click the link to find out.

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Three views of the global economy

Today’s Globe & Mail does an excellent job of presenting the three different potential outcomes for the global economy, one optimistic, one pessimistic and a third somewhere in between. Below are the key snippets of their article reflecting each of the three outcomes. However, I highly recommend reading the full article which is linked below.

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The top 25 European banks by assets

The top 25 European banks by assets

Just a few hours ago, I posted an article about European toxic asset exposure based on a Telegraph article.  The crux of the Telegraph piece was that European banks have a shed load of bad debt on their books.  A secret European Commission document allegedly put the exposure of the European banks to ‘toxic’ assets at £16.3 trillion, which is […]

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The bearish argument for the global economy

The bearish argument for the global economy

Now that I have burnished my bullish bona fides with two posts from the optimistic viewpoint, I want to share with you an analysis from John Mauldin that is much closer to the truth regarding where the global economy is headed, what type of bank losses we should expect and what that means about buying stocks. Warning: this is not an upbeat forecast.

John Mauldin, Best-Selling author and recognized financial expert, is also editor of the free Thoughts From the Frontline that goes to over 1 million readers each week. For more information on John or his FREE weekly economic letter go to: http://www.frontlinethoughts.com/learnmore

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Are European banks sitting on 16.3 trillion in toxic assets?

Are European banks sitting on 16.3 trillion in toxic assets?

If you had read the Telegraph on February 12, you would be inclined to believe there might be even more toxic assets on European bank balance sheets than on American bank balance sheets. However, anyone who read the Telegraph later would have seen the £16.3 trillion figure magically disappear.

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The bullish argument for the global economy

The bullish argument for the global economy

With a name like “Credit Writedowns,” this site is obviously not preternaturally given to the wildly optimistic scenario. In fact, my operating assumption is to hope for the best, but plan for the worst and expect something in between. Indeed, in an economic downturn, one needs to be more fixated on planning for the worst than hoping for the best. Nevertheless, as with the last post on China, I want to present the ‘bullish’ scenario to paint a fuller picture of the potential outcomes for the global economy.

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The bullish argument for China

Despite having made a number of bearish comments regarding China and its near-term outlook, I am a long-term China bull. Even over the short-term, China’s willingess to fund long-term infrastructure projects will serve as a buffer against the massive downturn in exports as the economy tries to gain more domestic consumption demand. On the whole, the government’s increasing the social safety net will spur spending by Chinese who save to meet anxiety over economic prosperity during downturns.

In that vein, I am posting some bullish comments about China by analysts at Merrill Lynch and JPMorgan Chase and other banks which Bloomberg News has picked up. While I do not see China rebounding as robustly as these analysts, I do want to present the bullish side of the picture because China may well be the first major economy to recover from the global downturn.

I have highlighted some key points in the article to consider. A link to the full post is provided below.

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The site is back up

Our site was down for the entire day from 9am – 9pm EST.  I had a lot of ideas and a particular tip to write about, but the day has been a complete bust. We apologizie for the inconvenience.  If anyone has good advice on a reliable dedicated IP webhost, let us know.

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Paul Krugman on the global economy

Below is a clip from the World Affairs Council meeting in Oregon with Paul Krugman as keynote speaker. The clip runs 1 hour and 34 minutes. However, Krugman’s piece, which is the centerpiece starts at about 13 minutes. And runs through his ideas first before they open it up to questions. Well worth a look.

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