Links: 2008-12-13

I continue to be impressed by the absolute magnitude of the Madoff scandal. This Ponzi scheme went on for decades. It is a truly frightening spectacle.  See some of the articles below.  Otherwise, it’s a Potpourri from around the net.

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naked capitalism: "Deflation has become inevitable"

(I agree with this post from Yves that the deflationary scenario I have been warning of is baked in the cake. That said, I do think that stimulus will ease the fall and speed the recovery. However, you always have to watch out for waste, mismanagement and special interests when the government spends your money. Not a lot of good scenarios, honestly.)

Economist’s View: Bankruptcy Reform Caused More Foreclosures (A great ost displaying how special interests protected themselves, making this downturn even worse)

Citadel Halts Withdrawals From 2 Biggest Funds — DealBook – New York Times

A guide to the Illinois Senate spectacle – Andy Barr – Politico.com This is the best guide I have seen on the web to all the players in the Blagojevich scandal.

FiveThirtyEight.com: Politics Done Right: Obama Approval Ratings Not Dented by Blagojevich Scandal

Emanuel Gave Blagojevich List of Names — Political Wire (Let’s see what kind of fallout this has for Obama. The reaction amongst the punderati is mixed so far. I saw a blurb that Ed Rendell, the Pa. governor had some harsh words to say)

Calculated Risk: Forecaster: Negative Q4 GDP in China

Not so sweet on Caroline – Ben Smith and Glenn Thrush – Politico.com

FT Alphaville » Blog Archive » Taleb: “It’s worse than Roubini thinks”

Here’s the Madoff stuff again. Mish has a good post that takes some headlines from around the net. It makes for compelling reading.

Madoff Madness: "I knew he was cheating, That’s why I used him"

Bloomberg.com: Madoff Turned in by Sons After Confessing $50 Billion Fraud

Bloomberg.com: Madoff’s Friends and Neighbors Will Sue, Lawyers Say

Bloomberg.com: Ecuador Defaults on Bonds, Seeks Restructuring

Economist’s View: The TARP Covers That Too? (The auto bailout is a bit of a zoo, really. While we should be concerned about the implications for the broader economy, there are very good bankruptcy laws in the U.S. A pre-pack Chapter 11 remains the best option. Bailing out ineptitude is one of the worst).

Heroes and Zeros – CNNMoney.com (Hat tip to Tim Iacono: Greenspan is a zero, Sheila Bair, Nouriel Roubini and Warren Buffett are heroes)