Bedtime Reading: 2009-06-18

A lot of links coming. So I will some now and others tomorrow.

• Retail sales plunged in April, led by motors – Irish Independent

  This is a depression-style fall: 17%.

• Outsider in the world of economics takes a dim view of ‘rotten’ banks – Irish Independent

  If you want to see what an independent economist has to say, read this article.

• Financial Regulation: Congress Takes on the Federal Reserve – WSJ

  I’m sure Congress will eventually cave and give unelected officials more power. Treasury as a straw man unelected official is a false choice on regulation.

• When Market Incentives Lead to Bad Outcomes – James Kwak

  This is an argument for health care reform in order to align incentives and outcomes as a way to drive down cost. "the current system does not motivate doctors to seek good outcomes."

• The next big investment bubble – green energy – Money Week

  This article has a good synopsis on research of how investors can get sucked into bubbles due to a massive liquidity surge. Very enlightening.

• If it’s bad for FedEx, it’s bad for the economy – Globe & Mail

  I have been saying that the market rally would wilt if we start seeing negative surprises. We are seeing those negative surprises and this is one very big one. I also think no sustainable rally can happen without industrials leading the way. Buyer beware.

• UK mortgage lending down 58pc in May to £10.3bn – Telegraph
• La mora bancaria alcanza el 4,420% en abril, la ms alta desde agosto de 1996 – Finanzas

  Loan delinquency in Spain is at a 13 year high and still increasing. Because Spanish loans are not marked to market more of the losses lie ahead of us than in the U.S.

• FT.com – HeidelbergCement wins €8.7bn refinancing

  Another German company near bankruptcy. Companies in Germany are more leveraged than you think. This is why German banks have such a low return on assets.

• FT.com – Lithuania rules out devaluation

  It’s the Euro or bust.

• Indian inflation turns negative – BBC News

  India gets deflation too, along with the U.S., Eurozone, Switzerland, Japan and many more

• Obama’s Financial Regulatory Restructuring is an “Industrial Policy” – David Kotok

  This note suggests legislation is coming and there’s no stopping this train. Unfortunately, I would agree. And forget about Fed independence: Obama has Treasury with a veto over the Fed – long live the executive branch. The concept of an independent Fed was dead a long time ago, though.

• Crude Oil Prices: 1861-2008 – Paul Kedrosky

  Nice graph

• China hits at BHP-Rio iron ore deal – FT Alphaville

  China thinks BHP-Rio “has an obvious colour of monopoly.” No wonder the Chinese are going protectionist. Every time a major nation sees China grabbing for its natural resources Rio in Australia and Unocal in the U.S., you see the protectionist hackles raised. This is a quid pro quo.

• State Income-Tax Revenues Sink – WSJ.com

  It’s not just California. "State income-tax revenue fell 26% in the first four months of 2009 compared to the same period last year, according to a survey of states by the nonprofit Nelson A. Rockefeller Institute of Government. The report, conducted by the public-policy research arm of the State University of New York, is one of the most up-to-date measures of how deep the recession is digging into Americans’ wallets and, consequently, state coffers."

• Polls find rising concern with Obama on key issues – Reuters

  Is the honeymoon over?