Links: 2009-04-24
- FT.com – German business confidence rebounds
A surprisingly sharp rise in German business confidence has provided further evidence that Europe’s largest economy is over the worst of its recession and is closer to returning to growth than previously thought.
- U.S. may remove Citi’s Pandit: report
It’s about goddamn time. U.S. regulators who are concluding ”stress tests” on banks may remove Citigroup Inc chief executive Vikram Pandit, the New York Post reported, citing sources it did not identify further.
- Regulators Fell One Bank, Spare a Rival – WSJ.com
When federal regulators forced National City Corp. to sell itself in October, the head of another struggling bank right across the street watched from his office window as television crews swarmed. “That could be us,” Robert Goldberg, AmTrust Financial Corp.’s chief executive at the time, recalls worrying.
- It’s still Ken Lewis’s fault – Telegraph
It damn sure is and lawsuits will result. “Ken Lewis’s testimony to New York Attorney General Andrew Cuomo doesn’t get him off the hook for Bank of America’s disastrous acquisition of Merrill Lynch. “
- Borrowing puts UK’s AAA rating in danger after Budget 2009 – Telegraph
The prospect of the UK losing its AAA sovereign credit rating, resulting in higher interest rates for companies and households, moved a step closer after ratings agencies voiced fears about the UK’s vast public debt burden.
- Fed data shows big losses on Bear Stearns deal
The U.S. Federal Reserve lifted the lid on its efforts to shore up the financial system on Thursday, and in the process, showed a $3 billion loss on the books from its deal to rescue investment bank Bear…
- FT.com – Spanish jobless total rises above 4m
This is clearly a depression in Spain. “Unemployment rose to 4.01m, or 17.4 per cent of the workforce, up from 13.9 per cent in the fourth quarter of last year, the National Statistics Institute said on Friday.”
- U.K. Economy Shrinks 1.9% in First Quarter – WSJ.com
“The U.K. economy contracted a greater-than-expected 1.9% in the first quarter, the Office for National Statistics said Friday, the third straight quarter of output declines in an increasingly harsh recession.”
- BBC NEWS – Lower prices lift Amazon profits
This is a turn of events that is fully reflected in the stock price there.
- BBC NEWS – S Korea avoids entering recession
I may have more to say about South Korea soon. Question: are they de-coupling? That’s a dreaded word I hate to use.
- Poland’s economic strength | Not like the neighbours | The Economist
A LOT like South Korea, a bit like Mexico and not at all like its neighbours. That is how Poland wants to be seen after it set up a $20.5 billion credit line from the IMF. This was not a bail-out like those for Ukraine, Hungary and Latvia. It was a precautionary and unconditional overdraft offered only to top-quality borrowers, say officials. The only other country to get similar treatment is Mexico.
- The Hooverville that wasn’t – The Economist
“The funny thing, though, is that the tent city had actually been around for close to a decade. There may have been a foreclosed homeowner or two among its denizens, but Justin Wandro, the office manager at nearby Loaves and Fishes, a food bank where the homeless can eat and shower, says that almost all of the people there have problems with mental health, drug abuse or both.”
- Fed says didn’t advise BofA’s Lewis on disclosure | Reuters
“No one at the Federal Reserve advised Bank of America chief Kenneth Lewis on any disclosure issues, Fed spokeswoman Michelle Smith said on Thursday.”
- In Defense Of Elizabeth Warren – John Carney
“Whatever Warren’s short-comings might be, she is right about several problems at the core of the Obama administration’s bailout programs. The financial system will not be fixed by providing subsidies to market failures. It’s strange to hear otherwise market oriented people react with disgust to this basic insight. If anything, they should be thanking Warren for reminding us that even in these panicked times, basic ecoomic principles continue to operate.”
- American Express Beats Profit Estimates, Plans to Repay TARP – Bloomberg.com
“Profit from continuing operations in the first quarter declined to $443 million, or 32 cents a share, from $1 billion, or 89 cents, a year earlier as consumers defaulted on more loans, the New York-based company said today in a statement. Results beat the 13-cent average estimate of 20 analysts surveyed by Bloomberg. “
- PNC, SunTrust, Fifth Third Boost Bad Debt Provisions (Update2) – Bloomberg.com
“PNC Financial Services Group Inc., SunTrust Banks Inc., Fifth Third Bancorp and Marshall & Ilsley Corp. said they will strengthen bad debt provisions after announcing first-quarter results today. “
- German economy ‘to shrink by 6%’ – BBC News
“Germany’s economy will shrink by 6% this year and continue to contract in 2010 according to a forecast from the country’s leading economic think tanks.”
- FRB: Press Release–Federal Reserve System publishes annual financial statements–April 23, 2009
Massive increase in the Fed’s balance sheet. Total Reserve Bank assets were a massive $2.25 trillion on December 31, 2008. Don’t you wish you could report the year’s balance sheet 4 months later?
- FT.com: GillianTett – Finger of blame points to shadow banking’s implosion
It is the shadow banks that have cratered credit availability. “if Citi data are correct, the real source of the current credit crunch is not a collapse in bank loans, but the implosion of the shadow banking world.”
- FT Alphaville » Blog Archive » Moody’s downgrades Lithuania, Latvia
Another example that Estonia is moving in the other direction. Morgan Stanley thinks Estonia could get EMU status.
- Deutsche Wirtschaftsblogs: Warum so wenig? Sind sie gut? • Börsennotizbuch
Another response to the debate about (the lack of) German finance blogs
- Morgan Stanley – No Longer All for One?
The Baltics are looking bad. “Despite improving confidence in Euroland and widespread optimism on the impact of the post-G20 IMF, problems in the weaker parts of eastern Europe look far from over.”
- Option ARMageddon » Cuomo: Bernkanke/Paulson Threats Forced BofA to Buy Merrill
Can you say lawsuit? This is getting very ugly, very quickly
- The Power of “The Daily Show” – The Big Picture
The Daily SHowis a must-do for anyone flogging a book. Something I need to remember when my book comes out.
- UK Bubble: False choices; irrelevant counterfactuals
Alice Cook is no Keynesian and does not believe the UK wil be able to stimulate its way out of recession. Indeed, a huge debt burden, legac of Brown’s profligacy, may be a very real constraint for the UK. I’s not looking good for Labour
- China’s “dollar trap”: Lessons from France’s 1920s “sterling trap” – vox
Interesting analysis of China and the U.S. today versus France and the U.K. during the Depression. When Sterling collapsed, the Bank of France was technically bankrupt.
- Willem Buiter’s Maverecon – Why Weber is half right but completely wrong
The bits on the German bank Commerzbank are quite good as Commerzbank and its takeover target Dresdner should have been re-organizedinstead of propped up. I suspect, the Germans will pay the price for this down the line.
- Economist’s View: A Bad Sign for Geithner’s Toxic Asset Plan
The bailouts are not having their desired effect.
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