Politics
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
Bloomberg.com: 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 – washingtonpost.com
John Maynard Keynes: Economic advice for America’s president | Comment is free | guardian.co.uk
The hidden costs of war – Roger Simon – Politico.com
Gates agrees to stay on under Obama – Mike Allen – Politico.com
Real Time Economics : Who Is Christina Romer?
Fed’s consumer ABS liquidity plan spurs confusion | Reuters
FT.com | 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.
FT.com / 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%
Bloomberg.com: Fed Commits $800 Billion More to Unfreeze Lending
Saving Citi May Create More Fear – NYTimes.com
Bloomberg.com: Skanska to Cut 3,400 Nordic Jobs on 15% Volume Drop
Mayor Michael Bloomberg sees no U.S. bailout | Politics | Reuters
Markets
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)
Bloomberg.com: Montier Has ‘Never Been More Bullish’ on Stocks
Bloomberg.com: Buffett Stock Picks Beat Financials Index as He Dodged Subprime
Bloomberg.com: Dividends Cut Fastest Since 1950s as Citigroup Conserves Cash
Angry Citi investors to unveil new court complaint | Reuters
FT.com | 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.
Edward