- Today vs. the 1980-82 Recession – Menzie Chin
“While the job losses, foreclosures, stock declines and other casualties of the current recession have been very painful, substantially more bad economic news is needed to make this recession worse than the downturns of 1980-’82, at least in G.D.P. terms.”
- May Sales: How Retailers Fared – Real Time Economics
- Staatshilfe für Porsche – zeitenwende.ch
So now Porsche is going cap in hand to government for a bailout. Shambolic if you ask me. Wedeking has turned what was a prized German company into a debt-laden near bankrupt organization — all in the pursuit of empire. He needs to go.
- Looting and How It Came to Pass – Yves Smith
Interesting look at the mismatch between when profits are booked and accounted for and when the cash comes in the door and the implications for remuneration
- The wonderful world of negative nominal interest rates – Willem Buiter
“So when inflation threatens, our monetary masters can raise the official policy rate to any level they deem appropriate. When deflation and recession threaten, they can only cut the official policy rate to zero. After that, it’s quantitative easing, credit easing, and other unconventional monetary policy measures.” But what if you have negative nominal rates? Take a look.
- Rio Tinto-Chinalco: China Is Not Amused – Deal Journal
“China’s mainstream publications and Internet bulletin boards, often at odds, spoke with one voice on the scrapping of the Rio Tinto-Chinalco deal. The message: that Australia’s government was holding China back while insisting that the Aluminum Corp. of China, Chinalco’s official name, shouldn’t make any further compromises to revive the deal.”
- Better Than Bailouts: The Banking System’s Quiet Lobby – New Deal 2.0
“The New York Times has an article this week about banking efforts that have escaped notice: namely, to lobby for–you guessed it–deregulation. The Times says the banks, through their lobbyists, have been pressuring legislators to back off regulation of credit default swaps and other securities. You read that right: Banks are lobbying the government to maintain tight, quiet control over the very trading practices that brought the financial system down—you know, before the government put billions of taxpayer dollars in bank vaults.”
- ‘Selling Us Short: The Limits of Markets (and Governments)’, with Joe Stiglitz and Jim Chanos – New Deal 2.0
“live streamed an important conversation with Nobel prize winning economist Joe Stiglitz and legendary market guru Jim Chanos, president of the world’s largest short-selling hedge fund. The topic, “Selling Us Short: The Limits of Markets (and Governments).””
- HSBC Faces Round Two of Subprime Punishment – WSJ
“When the subprime-mortgage crisis hit in the U.S., global banking giant HSBC Holdings PLC was among the first to get clobbered. Now it could be headed for round two. Through its subsidiary, HSBC Finance Corp., HSBC is a big holder of risky U.S. consumer loans, a toxic portfolio on which it has already taken more than $40 billion in impairment charges.”
- Nominee’s Criminal Rulings Tilt to Right of Souter – WSJ
“While Judge Sonia Sotomayor stands in the liberal mainstream on many issues, her record suggests that the Supreme Court nominee could sometimes rule with the top court’s conservatives on questions of criminal justice.”
- FDIC Pushes Purge at Citi – WSJ
With the banking sector now somewhat stabilized, it does seem the government is pushing for change. First Mozilo, now this. Let’s see where this leads. “The Federal Deposit Insurance Corp. is pushing for a shake-up of Citigroup Inc.’s top management, imperiling Chief Executive Vikram Pandit, people familiar with the matter said. The FDIC, under Chairman Sheila Bair, also recently pressed a fellow regulator to lower the government’s confidential ranking of Citi’s health — a change that would let regulators control the firm more tightly.”
- The Bond War – Daniel Gross, Slate
This makes it seem like political debate. I may have more to say on that score later. hat tip Mark Thoma: “The 30-year bond has risen from 2.5 percent last December to about 4.5 percent today. Now factions led by economist Paul Krugman and historian Niall Ferguson are feuding bitterly about the import of these charts.”
- Tony La Russa sues Twitter over alleged fake page
“St. Louis Cardinals manager Tony La Russa is suing the social-networking site Twitter, claiming an unauthorized page that used his name to make light of drunken driving and two Cardinals pitchers who died damaged his reputation and caused emotional distress.”
- Rio’s deal with Chinalco collapses
“One of the most controversial deals ever proposed in the mining sector was buried today as Rio Tinto walked away from a closer financial tie-up with China.”
- UK house prices ‘up 2.6% in May’
This data from the Halifax confirms the Nationwide data from earlier. That is fairly bullish