News round-up: 10 Oct 2008

Did you see that coming? What a train wreck of an end we had yesterday in the States. Things started off well enough with gains in Asian trading. The Europeans were a bit jittier, but it was within the bounds of reason. New York? That was whole different ball game.

The first story about people pulling their money out of stock and bond funds is a tad worrying. And if that’s not bad enough, Mexico is getting hit by two storms coming from opposite direction. Obviously, the round-up is going to be bad as a result. Sorry.

TED Spread at Record – Calculated Risk
Thinking of CDOs as Wine Glasses – Infectious Greed (good vid explaining CDOs using wine glasses)
Unfreeze the interbank markets by guaranteeing interbank lending – Willem Buiter, Mavercon (that’s what I say too)
More hits to the Greenspan legacy – The Mess That Greenspan Made
The Last Days of Morgan Stanley – Market Movers (These guys are toast)
The world is at severe risk of a global systemic financial meltdown and a severe global depression – Nouriel Roubini (Excuse me, could you stop beating around the bush, please)

Get ready for Lehman’s CDS Auction
The Looming Lehman CDS Unwind – Market Beat (everyone’s talking about this. More proof that letting Lehman fail in the way it did was reckless)
Timeline for the Epic Lehman CDS Auction Tomorrow – Infectious Greed (This could get ugly)
$400 Billion Lehman CDS Unwind? – Big Picture (Is Lehman responsible fro the meltdown? Some people think so.)

Market plunge
Asian stocks mauled as panic spreads – Sydney Morning Herald
Mutual Fund Withdrawals a Record as Investors Flee – Bloomberg
Stocks plummet; U.S., Netherlands ready bank funds – Reuters
GM shares slump to lowest level since 1950s – FT
Wall Street plunges in frenzied trading – FT
Lessons from the 1929 stock market crash – BBC News (Yikes)

Crisis news
Financial Crisis: Extreme leverage haunts Europe’s banks as rollover crunch looms – Telegraph
IMF prepares $200bn fund to shore up stricken states – Guardian
Fed doubles loans to banks to $140b – SMH (If $70 billion doesn’t work, try $140)
China, the Only Hope – Market Beat (Save us, China….please)
Swiss govt may support financial sector if needed -president – Guardian
UK and Iceland clash on crisis – FT
AIG: More Money, Please – Housing Wire
How to survive the next depression – MSN Money
Three wise men whose prophecies we ignored – Canberra Times (Marc Faber, Stephen Roach and Bill Gross)
Moment of Truth – Paul Krugman (Get a coordinated plan together or face Depression)

Other bad news – you can tell I’m in a wicked mood
Hurricane Norbert, Storm Odile Threaten Mexican Coast – Bloomberg
Halifax says house prices show record rate of decline – Telegraph
Housing beginning to feel global chill – National Post (Housing meltdown hits Canada. Take off, you hosers. As my English teacher would say, “that ain’t good”)
Insight: Iceland woes hint at contagion – Gillian Tett, FT
Citigroup ends Wachovia dispute – BBC News (yeah, the Depression’s coming so let’s sue)
Citi Concedes Wachovia to Wells Fargo – Deal Book (suing for $60 billion doesn’t sound like concession to me, but, hey what do I know)
North Korea said to be deploying missiles – Reuters

Oh, goodie, someone is rich
Singapore Art Sales Aim to Defy Falling Markets, China Slowdown – Bloomberg (At least someone has cash)

  1. Wag the Dog says

    Don’t know if this also happened during the 73-74 Bear Market, but we seem to be following the 1929-33 script, you linked to above:

    “Initially the authorities tried to rebuild confidence in markets by making reassuring speeches, with President Herbert Hoover telling Americans that the US economy was fundamentally sound.”

    Bush will be saying pretty much the same thing today.

    “Only a shake-out of workers from industry would ultimately restore prosperity, it was argued. “

    That’ll be good ole Jim Rogers.

  2. Edward Harrison says

    As I don’t know what is going to happen, I am hoping for a Japanese scenario as the outcome. What I fear is a Great Depression-style outcome.

    You are right to pint to the policy errors as potentially cataclysmic for the markets. The US has been the worst offender here allowing negative psychology to seep in to the point where they are losing control. Hank Paulson’s comments have very unpredictable results on markets these days.

    It seems that people have lost confidence in our banking system and no amount of jaw-boning is going to stop that. Therefore, we need a change in policy both in terms of what can be done as well as to change the psychology of the markets and the populace.

    Let’s see what Bush says about this today.

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