News round-up: 26 Nov 2008 – Politics, Economy and Markets

As the time for Barack Obama to take office moves ever closer, his policy team is coming into view. Obama has appointed a slew of economic advisors including Tim Geithner, Larry Summers and Paul Volcker. In addition, he looks to have filled out the key positions in his White House staff and to have nominated veterans to other key posts including Hillary Clinton, Bill Richardson, and Tom Daschle. Meanwhile Defense Secretary Robert Gates is likely to stay on. While opinions about the appointments are mixed, reviews about decisiveness and leadership have been favorable.

On the other hand, the reviews about Bush and Paulson’s handling of the economy and credit crisis still suffers with many commentators faulting Paulson for having changed the TARP design multiple times.

Below are the top links to these and other interesting political stories.
Obama to name Volcker to head markets panel | Politics | Reuters Obama Says Wall Street Executives Should Forgo Holiday Bonuses

Another View: TARP Is an Incipient Disaster — DealBook – New York Times

Karl E. Meyer and Shareen Blair Brysac – Send Bill Clinton to the Senate –

John Maynard Keynes: Economic advice for America’s president | Comment is free |

The hidden costs of war – Roger Simon –

Gates agrees to stay on under Obama – Mike Allen –

Is Geithner Up to the Task? – Mergers, Acquisitions, Venture Capital, Hedge Funds — DealBook – New York Times

Real Time Economics : Who Is Christina Romer?

Fed’s consumer ABS liquidity plan spurs confusion | Reuters | Willem Buiter’s Maverecon | Tits on a bull

A Reporter at Large: Anatomy of a Meltdown: Reporting & Essays: The New Yorker

Finance and the Credit Crisis
In the world of finance, despite decent stock market returns, most of the news coming out is fairly grim. And this is a global phenomenon. Toyota had it’s ratings cut. Dividends are shrinking across the board, Canada looks likely to move into recession. BHP Billiton and Rio Tinto is a commodities merger that will never happen. Porsche is going to miss targets. Oh, and house price in the U.S> are still falling. The list goes on. In my view, the most important story is China because they are slowing at a rapid rate and the government is stepping up the stimulus, both fiscal and monetary. Below are the biggest stories out there starting with China. / Asia-Pacific – China makes biggest rate cuts for decade

Toyota debt rating cut, Suzuki holds out hope for GM | Reuters

Yahoo!’s five biggest mistakes – National Post

Rio Tinto says on track on major asset sales | Reuters

LandAmerica files for Chapter 11 bankruptcy protection | Reuters

Canada in recession and heading for deficit: OECD

‘Production cuts likely’ at Porsche, VW – Breaking News – Business – Breaking News

Real Time Economics : FDIC Says Number of Problem Banks Grows

U.S. home prices plunge record 17.4% Fed Commits $800 Billion More to Unfreeze Lending

Saving Citi May Create More Fear – Skanska to Cut 3,400 Nordic Jobs on 15% Volume Drop

Mayor Michael Bloomberg sees no U.S. bailout | Politics | Reuters

Obviously, we are in a bear market given that stocks have been cut in half and the news flow continues to be negative. However, Jeremy Grantham and James Montier, two so-called perma bears are loving life because they see a lot of good value amongst the corporate carcasses waylaid by the global downturn. Warren Buffett is bullish and looking good these days as some of his bets seem to be paying off. That said, one must recognize that we are still in a bear market and that means that not all stocks can increase. In fact, Grantham sees the S&P potentially falling to 600 next year amid the grim economic news. Grantham has a must-see interview with Consuelo Mack that I have linked below. I share his views both in terms of the number of values available and the likely fall in broader indices. His most intersting statement was when he said it is times like these that matter in an asset allocator’s performance. Anyone can make money in a bull market. Bear markets separate the men from the boys.

Below are the important links in the markets. Note the lead stories about Middle Eastern investors being more concerned with their own problems than investing in Western markets.

Sovereign wealth funds switch from Western investments – Times Online

Heavily in Debt, Dubai Calls in the Bankers – DealBook – New York Times

Jeremy Grantham: TV Interview – CONSUELO MACK | WEALTHTRACK (Video) Montier Has ‘Never Been More Bullish’ on Stocks Buffett Stock Picks Beat Financials Index as He Dodged Subprime Dividends Cut Fastest Since 1950s as Citigroup Conserves Cash

Angry Citi investors to unveil new court complaint | Reuters | Willem Buiter’s Maverecon | Tits on a bull

HSBC declares interest in taking over Citigroup assets as Washington takes control – Times Online

As always, feel free to see all the important news links in the news feed, which you can access here.

I hope to get out an update to my credit crisis timeline before this day ends. However, forgive me if I do not. I am off to a turkey fest this afternoon and foresee me stuffing my face by 4PM.

I wish you all well over Thanksgiving.


Comments are closed.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More