Links: 2009-05-27
- Obama’s Pick, From The Start – Marc Armbinder
“The process ended where the President started. In November, a few days after he was elected President, Barack Obama convened some of his most trusted advisers in a private meeting for an even more closely-held topic. He wanted to talk about the Supreme Court. Obama arrived, armed with a list of judges and academics he wanted his team to consider. At the top of the list, according to someone with direct knowledge of the meeting, was Judge Sonia Sotomayor.”
- North Korea Threatens Armed Strike, End to Armistice
- Greg Mankiw makes spurious comments about Sotomayor – 538
This is a great post by Nate Silver because it shows that Greg Mankiw was not really thinking when he attacked the new Supreme Court nominee for ‘overconsumption.’ Definitely read this account.
- BoI urges mortgage overpayments – Irish Independent
This sounds suspiciously like an accounting dodge. Book cash flow today in order to boost equity capital. “Bank of Ireland has written to its mortgage customers encouraging them to use the opportunity offered by seven cuts in European interest rates to overpay their home loans.”
- Goldman’s deposit-taking arm generates $280m in sales in Ireland – Irish Independent
Very interesting tale here. “As well as showing the substantial scale the Dublin company has achieved, another striking feature of the 2008 accounts is an average staff cost of over $220,000 across the 55 workers on the payroll. The figure falls back to about $200,000 once payments of $1.2m to directors are taken out.”
- Ireland tops house price drop league with Dubai
Pretty dire note on house prices in the world’s biggest bubble market, Ireland. We’re talking 40-50% declines here.
- China in surprise bid for GM’s Opel unit
I guarantee you the Germans hate this bid. You have Tata Motors in the U.K. but no Chinese in Germany? The Germans will just use this to goose the existing bids.
- Ashton Kutcher Threatens to Stop Tweeting Over Twitter TV
“It’s all fun and games until somebody gets stalked.”
- The 10 Best U.S. Cities to Live and Work – Lifehacker
“Personal finance site Kiplinger has released their annual list of the best cities in the United States to live and work. The key this year: It’s all about where you can find—and keep—a good job.”
- Oil hovers above $62 on optimism about economy
“Oil hovered little changed near a six-month high above $62 a barrel on Wednesday, as a jump in U.S. consumer confidence and signs of modest recovery in Japanese exports buoyed hopes that oil demand would rebound”
- Do you or did you ever have friends in the FDIC? – John Hempton
I was wondering when John was going to respond to the Bloomberg story about JPM and WaMu. Silly me, I forgot he was on Australian time. Here’s what he has to say.
- Yes, We Are Now Giving Free Money to GM – Deal Journal
“Consider this extraordinary fact: The U.S. government is likely putting up to $50 billion in new money to back the company’s bankruptcy reorganization, according to people familiar with the plan.”
- Smooth Sailing: Sotomayor Headed to Easy Confirmation – Mark Halperin
“President Barack Obama knows how to avoid a fight — and still do what he thinks is right. The media and conservative activists might be spoiling for a Supreme Court nomination battle, but the choice of Circuit Court Judge Sonia Sotomayor to fill a high court vacancy is a classic Obama decision that makes the chances of political smooth sailing a near lock.”
- Feldstein: Has the US Recovery Begun? – Mark Thoma
“The positive effect of the stimulus package is simply not large enough to offset the negative impact of dramatically lower household wealth, declines in residential construction, a dysfunctional banking system that does not increase credit creation, and the downward spiral of house prices. “
- GM looks set for bankruptcy as deadline looms – Telegraph
“General Motors could hand stakes of 17.5pc to union workers and up to 10pc to the US Government, as it looked likely that the failure of a debt-for-equity swap with bondholders would force it to file for bankruptcy.”
- WaMu Makes JPMorgan $29 Billion as Shareholders Rail – Housing Wire
What’s important in this story is WaMu shareholders claim that BankUnited happened in the same way that the JPM-WM deal did. They claim that BankUnited was basically stolen from shareholders by the FDIC. Watch this story.
- Housing Not “Bottoming,” Says Tilson: Another 10%-15% Drop To Go – Tech Tciker
This is a good video included explaining why the housing market is not bottoming.
- Why academics make better bloggers than journalists – Felix Salmon
I’m playing catch-up in my reading and saw this post from Felix Salmon that is worthy of reading.
- Revisiting WaMu – Felix Salmon
Here’s Felix’s view – more in line with John Hempton than me. I find his comments about the consumer unfriendly Chase replacing the friendly WaMu very interesting. Remember how WaMu bought DIME in New York bank in 2002? As I recall, DIME was also customer-friendly, whereas Manny Hanny/Chemical is not.
- Hideous Greenwich Eyesore Must Be Seen To Completion – DealBreaker
This is the Mansion amongst McMansions.
- Credit Crisis Cassandra – Mark Thoma
Thoma really lays in to Larry Summers in his review here. You have to read his commentary to see what I mean. He also says the following: “This explains a lot. Brooksley Born, head of the Commodity Futures Trading Commission from 1996-1999, wanted to regulate the financial markets that have caused us so much trouble, but Greenspan, Rubin, Summers, and Levitt stood in the way and would not allow it. I wonder if they patted her on the head as they explained “that they understood finance better than she did.””
- U.S. consumer confidence sees biggest jump in 6 years
I don’t normally care about consumer confidence, but the jump was so large I felt I should post it. Let’s see if this feeds into increased consumption.
As far as people pre-paying their mortgages, if they pre-pay their interest payments, it gets recognized in an asset account (prepaid interest) as it is realized (paid). Its not booked as revenue until its earned, whereby it moves from the Balance Sheet (prepaid interest) to the Income Statement where it then becomes revenue. Just sayin’