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Links 3/31/08

Maine weather wreaking havoc on deer PhysOrg

Clueless Guys Can’t Read Women LiveScience, In particular, men interpret friendliness as a sexual overture and vice-versa.

Ben Stein Watch: March 30, 2008 Felix Salmon. Thank God someone did the work….

Bagehot, central banking, and the financial crisis Xavier Vives. Vox EU

The Sting of Poverty Drake Bennett, Boston Globe (hat tip Mark Thoma)

Credit Card Fair Fee Act Adam Levitin Credit Slips

Post Subprime: A Bloodbath in Trader Bonuses International Political Economy Zone

The Dilbert Strategy Paul Krugman

Dith Pran, Journalist Portrayed In ‘The Killing Fields,’ Dies at 65 Associated Press

I do not consider it the place of this blog to urge political action. On the other hand, it is just about impossible not to notice that many readers are intensely unhappy about the conduct of the Fed and Treasury of late.

Congressional hearings on the Bear bailout are scheduled for this week, for April 3. This is an opportune time to call or e-mail your Senator and Congressman and express your views (I have a sneaking suspicion that calling has slightly more impact simply because so many organizations orchestrate e-mail petitions. But those with more informed views on how best to proceed are encouraged to speak up).

Antidote du jour:

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3 comments

  1. doc

    Yves,

    Check this out in regard to the circus this week between Paulson/Bush & Dodd/Senate/Congress and powers of The Fed and Treasury!! Very important week!!!

    http:// http://www.cascadiaprospectus.or…national_in.php

    “That’s why a March 11 hearing by the Senate Committee on Banking, Housing and Urban Affairs took on special significance. The hearing focused on a bill sponsored by Senate Banking Committee Chairman Christopher Dodd (D-CT) and Sen. Chuck Hagel (R-NE) to create a National Infrastructure Bank (S. 1926).

    Described by Sen Dodd as a “unique and powerful public-private partnership,” the proposed Bank could potentially offer a fresh solution to the challenge of infrastructure financing.

    The bill proposes to create an independent national bank financed with a $60 billion bond issue. Using the bonds to leverage private capital, the bank would supplement public spending and finance large capacity-building infrastructure projects “of substantial regional and national significance.””

    But the idea of a national capital budget is not without its critics. The Treasury Department might be opposed to the bonds if they became a new encumbrance on the U.S. treasury. The congressional appropriators might object to the Bank as usurping their prerogative to be the sole dispensers of the federal largesse. There might also be objections from those who believe that the answer lies in relying more heavily on market forces to direct private investment into the needed infrastructure rather than creating a new centrally directed bureaucracy.

  2. Anonymous

    Sorry, OT:

    Yves,

    could there be more significance in this small Japanese Cerberus story ?
    From FT:
    Japanese regulators are examining the relationship between Cerberus Capital Management and Aozora Bank, in which the US financial firm is the largest shareholder.

    The Financial Supervisory Agency is concerned that the two entities have not kept at arm’s length and that Cerberus may have put pressure on the Japanese bank to finance its deals, according to people familiar with the probe.

    If the FSA finds irregularities, it could fine the bank or demand management changes. Aozora was not available for comment.

    The FSA investigation marks the latest example of tension between foreign financial investors and Tokyo authorities.

    People familiar with the US company dismissed regulatory concerns and insisted that Cerberus did not need to tap the bank’s capital. It had adequate resources of its own, estimated at $7bn of cash and $4bn undrawn capital from its own investors. It also had the goodwill of key investors.

    “They have the resources to make it all come right,” said an investor with one of the most widely respected funds in the Middle East.

    Cerberus recently announced its intention to spend about $400m to increase its Aozora stake to about 46 per cent from 37 per cent, taking advantage of the fact that the Japanese bank’s shares are trading below book value.

    The Japanese probe comes as several Cerberus investments in the US have gone sour, notably in Chrysler, the carmaker, and financial services group GMAC. The spotlight has shifted to the US firm’s relationship with Aozora, which itself has a $500m investment in GMAC.

    Cerberus could raise fresh funds by selling its stake in Aozora, but the chances of such a sale look remote. While Aozora is officially not for sale, private equity firms, including the investment arm of Goldman Sachs and TPG, looked at the bank but decided against making an offer.

  3. Yves Smith

    Anon of 3:52 Am,

    Not sure but it would seem to suggest Cerberus is a tad desperate for funds or colossally stupid. You do not mess with Japanese regulators, They give no quarter.

    I’ll see if I can get some G2 from my Japanese contacts.

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