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Links: 2009-02-12 – the blogger edition

A Glance At The Upcoming Eastern European Cataclysm – Zero Hedge Jim Rogers on Wall Street Maseratis – Tim Iacono Rio’s Chinese takeaway – smh.com.au Rescue plan for Ireland’s banks – BBC News Put Call Ratio Suggests a Market Sell Off is Coming – Wikinvest Can the improvement in the US trade balance continue? – Brad Setser Marshall Auerback: Avoiding Advice from the Financial […]

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The Obama-Geithner Plan will fail

The title of this post is fairly provocative and categorical. This is by design. For I see Obama’s banking plan as more of the same — not ‘change we can believe in.’ And we all need to be clear about the need for Obama and his team to correct their course of action. Whilst there may be plenty of other reasons to support the President, this is not one of them.

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Average U.S. jobless claims top 600,000

Average U.S. jobless claims top 600,000

Jobless claims for the week ended February 7th came in at 623,000, pushing the 4-week average above 600,000 for the first time since 1982. This is a clear indication that the U.S. jobs picture remains weak. Further evidence of this weakness comes from continuing claims where 4.8 million are still on the unemployment roles.

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World Economic Forum: Experts voice their views on the economy

Below is a good video clip from the recent World Economic Forum in Davos. The speakers are addressing the issue of how they see the global economic outlook going forward. The moderator who begins the discussion is Martin Wolf of the Financial Times, who I quoted in a recent post.

This clip comes in at one hour in length, but is definitely worth a watch because it gives you a good sense of what some very smart, very well-connected people believe. You should note that Martin Wolf himself does not believe the Obama bailout package is going to get it done.

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More footage from the House Banking Committee

Here, Maxine Waters, a U.S. Congresswoman from Los Angeles gets hot under the collar about the banking industry given its predatory lending (credit cards and housing) in her constituency. You may remember she was very skeptical about the TARP but voted for it and felt duped for doing so.

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Banking Committee: Videos of CEOs’ opening statements

We heard testimony before the House Banking Committee in Washington today. The CEOs of eight large financial institutions are being raked over the coals by Congress. It was a scene which reminded me of the Pecora Hearings during the Great Depression. It was also one which is being repeated in London.

The Congressmen are ludicrously indignant — after all, Congress has been complicit in the state of affairs. One member of Congress asked the men (there are no women) to raise their hand to questions on several occassions like schoolboys in a classroom — questions akin to “when did you stop beating your wife.”

I see these proceedings as more show trial to reassure the public than anything substantive. Nevertheless, they are entertaining. Below are videos of the opening statements from each of the CEOs. You might find their comments illuminating regarding their thinking now that the economy has collapsed and they have needed governement assistance.

You should also note that not all of these banks are in a precarious way. Some are better off than others.

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Did Tim Geithner blow it?

Politico asked a bunch of pundits from across the political spectrum to size up U.S. Treasury Secretary Tim Geithner’s performance in explaining his plan for rescuing the U.S. banking system. They were asked, “Did Tim Geithner blow it? What should he do now?” One pundit, Jeffrey C. Stewart, had a memorable response (Hat tip Dave): Yes, I think Geithner did blow […]

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Mea Culpa: The Fed is not going to buy treasuries

Judging from recent events, the bond vigilantes are right to suspect that Ben Bernanke is all talk and no action when it comes to keeping long-term rates low. If you recall, I had actually believed the Fed would support bonds because it was concerned about long-term interest rates. This is part of the reason I believed that Treasuries would rise despite being in bubble territory but it looks unlikely.

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Links: 2009-02-11 – the City of London version

Yesterday and today, the heads of British banking institutions face the music in Westminster before a live camera. Yesterday’s proceedings were fairly dramatic as I suggested in my post HBOS and RBS get a right bollocking. There has been a lot of god commentary about these events. As a result, I have a special section in today’s links reserved for the City of London.

The United States will see much of the same today as 8 CEOs head to Washington. I also have a brief section on real estate (not the crash, but lovely properties for sale from the NY Times) and a few links for pure voyeuristic titillation (it can’t all be doom and gloom).

Other news links are below or in the news feed.

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McGraw Hill drops book critical of its own subsidiary

McGraw Hill is one of the major book publishers in the United States. It also happens to own Standard & Poors, a well-known rating agency. Fellow econblogger Barry Ritholtz was due to release a book via McGraw Hill titled “Bailout Nation.” In the book, he gets a bit rough with the rating agencies, which I see as analogues to the accounting firms in the shenanigans of the late 1990s.

Guess what? McGraw Hill, abruptly canceled the book, shortly before its release was due. Apparently, this is how business in the United States is conducted. Shambolic, if you ask me.

Here’s what Barry has to say.

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Stephen Roach: Downturn in Asia less severe, but recovery later

Morgan Stanley Asia head Stephen Roach believes that Asia will weather the economic storm with a less severe downturn than the West. However, as the economies are predominantly export-led, he also believes that the countries are followers, not leaders. Translation: Asia will recover more slowly. Asia will have a less acute impact from the global financial and economic crisis but […]

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Some tidbits about stimulus, recovery, and the Great Depression

Some tidbits about stimulus, recovery, and the Great Depression

Paul Kasriel of Northern Trust is one of the few economists to have warned about the present economic malaise. So his analysis of present events carries weight. In making recommendations about our future economic path, Kasriel leans heavily on historic precedent regarding periods of deleveraging, one such period being the Great Depression. He draws some interesting conclusions.

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