News round-up: 19 Aug 2008

Top billing
California bank stocks: The herd gets thinned again – LA Times
The implications of this story in a state that has seen the largest drops in house prices anywhere is that many busts are going to happen in California. There is only one bank too big to fail and that’s Wells Fargo. Every other bank in the entire state has under $20 billion in total assets. When it comes to bank failure, California will be the state to watch.

The Elusive Bottom – David Rosenberg via John Mauldin and Safe Haven
This is not light, happy reading. Rosenberg gives a straight-up bearish case for the economic picture, financials, and writedowns. He also says the stock markets could test its 2002 lows. Powerful reasoning and good support to his thesis.

Exclusive Interview: Jim Rogers Predicts Bigger Financial Shocks Loom, Fueling a Malaise That May Last for Years – Money Morning
No one ever said Jim Rogers wasn’t opinionated. He was actually a visiting Professor in a class I took at Business School heading on to fifteen years ago. Quite honestly, the guy’s abrasive and he and his underlings who worked the class were very in your face. If you presented an investment theme without the intellectual support, he would rip you to shreds — not a class for the meek. Nevertheless the guy always has something interesting to say and he gives well-reasoned arguments.

Inflation or deflation
Should the ECB reverse the July rate hike? – Handelsblatt
Rate setter warns on UK inflation – BBC News (apparently, there are inflation hawks in the BoE)
U.S. bank ‘to fail within months’ – BBC News (Kenneth Rogoff knows what he says)

Property
Brixton warns on property market – BBC News (Now, it’s commercial property’s turn)
Supply of rental properties rises – BBC News (I can’t sell my flat so I will let it at Foxton’s)

Banking
Tough Road Ahead for China’s State Banks – Deal Book
Brokerages Balk as Big Banks Reach Settlements – Deal Book
Lehman May Put a Prized Unit on the Block – Deal Book (naked capitalism has a good take on the Neuberger Berman sale)
SageCrest Files for Bankruptcy – Deal Book (Hedge fund hits the wall)
Slump of 32pc in Latvian bank’s profits deals blow to Desmond – Irish Independent (The Baltics are heading south)
Running a Hedge Fund Is Harder Than It Looks on TV – Deal Book
Scotiabank, Bank of Montreal May Lead U.S. Charge – Bloomberg

Politics
The new cold war era – Martin Hutchinson, Asia Times (Wake up, people. The peace dividend is over. That’s not good for stocks unless you mean defense stocks.)
Venezuela takes over Mexican-owned cement units – BBC News (Chavez being Chavez; by the way, inflation is rampant in Venezuela despite oil subsidies)
Zimbabwe inflation rockets higher – BBC News (If Venezuela keeps it up, this will be the deal)
Musharraf departure heightens uncertainty – FT
As Oil Giants Lose Influence, Supply Drops – NY Times (I’ll call this a political story because it has a lot to do with Nationalization. Look at Russia. They don’t want the likes of BP reaping the profits that the Russian state could get.)

Foreign-language
Cae el interés extranjero por el mercado inmobiliario – La Nacion (An article from an Argentinian daily which shows the interconnectedness of housing markets. A fall in U.S. home prices has reduced demand in Argentina)
Bundesbank sieht Inflation auf dem Scheitelpunkt – Spiegel (The Bundesbank doesn’t see inflation as a threat anymore)
La morosidad a su nivel más alto desde 1999 – El Mundo (Spanish mortgage defaults are rising)

Odds & Ends
Russian denies buying luxury home – BBC News ($730 million is the price tag, mate. That’s £392 million or 496 million euros. Nice.)
G.M. Said to Have Discussed Hummer Sale With China Rival – Deal Book (I don’t know what it would signify but I’d love to see the Chinese owning Hummer)
Divorcing a cheater? Get more money – MSN Money (Elizabeth Edwards, you know what to do)
Why Gun-Toting Conservatives Don’t Drink Lattes With Liberals – Bloomberg (This is a book I might have to read and put in my Amazon store. Check out what Bloomberg has to say about it.)