Links 2/6/09

Rules and pecking orders at Davos BBC (hat tip reader Tim C)

Little prospect of East-West accommodation W Joseph Stroupe, Asia Times. Challenges conventional wisdom.

Stampede by banks to beat bonus crackdown Times Online (hat tip reader carlos g)

Insuring Bankers’ Bonuses The Baseline Scenario (hat tip reader Tim)

A “New” Bailout Plan? Hardly Roger Ehrenberg. I’m already developing plan fatigue. A well-done, colorful shredding of the leak du jour..

China outraged after India bans all toy imports Telegraph

New York City Datapoint of the Day Felix Salmon

Hooray! China has bottomed out Michael Pettis (hat tip reader Michael).

More to worry about … the US downturn looks to be getting worse when it should be getting better Brad Setser

Antidote du jour (hat tip reader Diane) A polar bear attack in Manitoba:

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  1. DoctoRx

    Re Brad Setser’s support of big-time stimulus, I would humbly proffer two questions to him:

    1. Is not this Keynesian “stimulus” bill basically a hair-of-the-dog stuff, since the Tower of Debt crashing down is the main cause of the crisis, and all the projected stimulus is debt-financed (or else they print money)?


    2. Given the still-unknown costs of fixing the financial system, does the Federal Govt really and truly have the borrowing capacity for this bill? (There really are massive unfunded liabilities for Soc Security and Medicare coming-really!)

    Finally- I read last night that the CBO scored the stimulus bill (?House version) as mildly NEGATIVE to growth over a 10 year period. Does anyone know if that is indeed its projection?

  2. ruetheday

    The latest from the WSJ on the bank bailout plan:

    Here’s the part I don’t get:

    “The Obama administration is discussing expanding the TALF to provide financing for other older assets, such as mortgage-backed securities.”

    When the Fed announced the creation of the TALF on November 25, they ALSO announced a separate program to buy $500 billion in MBS and $100 billion in agency debt. Have they hit that limit already or something?

    And maybe I’m being naive, but when did it become acceptable for the administration to take a hand in crafting Fed policy programs? I realize we’ve all gotten used to seeing the “dynamic duo” of the Fed Chairman and Treasury Secretary working hand in hand over the past few months, but the blatant nature of matter of factly stating that the Obama administration is discussing how to expand some Fed programs with the Fed seems a little over the op to me.

  3. lucifer

    Has anyone noticed that the NSA unemployed number has gone from 10.999 (almost 11 million) in Dec 2008 to 13.009 (13 million) in Jan 2009.

    We lost almost 2 million jobs in from the end of dec 08 to jan 09?

  4. ruetheday

    How can Ken Lewis buy millions of dollars worth of BAC shares and then go on CNBC and announce that BAC “categorically will not ask for more government capital” and watch the stock jump 23%? How is that not insider trading?

    If those clowns ask for $1 more of government funds, it should be denied on the spot, BAC should be nationalized, all of executive management and the board fired, and Lewis arrested on the spot.

  5. Anonymous

    To the question about the Fed Reserve and the Executive branch…..the currently elected President promised to do something regarding ‘change’ so it looks like Government is going to try to interfere with the business cycle via getting consumers to spend, getting banks to lend, redistributing the wealth to somehow create jobs when companies are laying off and trying to attract RE/housing loans.

    I don’t believe the Executive branch has any basis to enlarge government with advisers and new offices to carryout these plans. Of course you can’t tell them that.

    If Congress was told that any bailout money would come out of their salaries to say….prop up banks, you know what they would say in response: “Fuk’em, let’em go belly up.” But of course it’s taxpayers footing the bill so it okay to spend other people’s money.

    You’ll just have to accept things the way they are (corrupt) and work around them. I can’t even show their intentions are well meaning just false hope.

    The only change you get will be that things will get worse with government getting bigger.

  6. JP

    I think that might actually be a polar bear attack in Berlin.

    OMG, they’re everywhere. Nowhere is safe!

    Yves, you have a great eye for choosing animal photos.

  7. Yves Smith

    Anon of 5:49,

    The Pettis piece pretty clearly does debunk its headline. He may have simply not written the best headline (happens to all of us sometimes) or may have chosen not to annoy the officialdom (remember, he posts from China, and they could block his site).

  8. Andrew Bissell

    Marc Faber had an excellent interview on Bloomberg today. They discussed Bill Gross's "stimulate-or-die" thesis a bit.

    (Hope that link works.)

    Some money quotes:

    "The current crisis, the economic and financial crisis, is a direct consequence of U.S. government intervention into the economy through fiscal & monetary policies that have been designed to 'combat' recession."

    "It is not a failure of the free market that brought about the crisis. It is continuous intervention by the government, with fiscal and especially monetary measures, that have brought the crisis about. And now the same people that brought the crisis about want to solve it with more interventions."

  9. Merry-will-go-round

    Rage is an appropriate response to the violence done against the majority of the American populace since October 2008 and continuing. The Congress and Executive Branch have plotted behind closed doors and bullied the American public into relinquishing informed choice and angry protests for false and fleeting comfort from the authorities.

    The elite of this country have acted to reap enormous profits for themselves and their corporate cronies. These parasites plan to suck out the last few drops of blood from their hosts — ordinary Americans. With the American Recovery & Reinvestment Act, these malignant cancers on the American body have finalized the socializing of the enormous costs of several humongous, failed Ponzi schemes executed by the FIRE (financial/accounting, insurance, and real estate) sector in cahoots with our politicians.

    Can most Americans see the pattern yet? This shock-and-awe capitalism? From Iraq and Afghanistan to Afghanistan and Pakistan; from Economic Stimulus circa October 2008, to more TARP for the New Year, to the new-and-improved Drama Obama who threatens CATASTROPHE (less than a month in office) if the centralized government does not get to spend billions of future taxpayer monies immediately!

    On the bright side, I'm sure the "green energy" components of HR1 will offset any environmental degradation sure to emanate from whatever increases in resource consumption and waste production our government can stimulate through the rest of HR1 spending components.

  10. Uncle Billy, Mental Widget

    Yves and anonymous:

    Are you guys serious? I read the Pettis headline as another in the long line of sarcastic bottom calls.

    Maybe he should have included a: :p

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