Contrary to usual form, I’m putting the latest update first, but Bloomberg claims that the Senate Republicans and Democrats have reached a compromise on the auto bailout bill. However, the Detroit Free Press, in a story posted at almost the same time, say the Democrats say there is a deal, while the Republicans beg to […]
Read more...The Wall Street Journal story on GM engaging a team of bankruptcy advisors stresses that this move is in part political, to underscore that the top US automaker really is at the end of its rope. Most observers assume that if Congress failed to authorize a rescue bill, that the Treasury would uses it TARP […]
Read more...We appear to be at an impasse, Senate Republicans are unhappy with the provisions of the auto industry rescue bill that passed the House last night. While they are signalling that they would back legislation with a stronger role for the “car czar” and some also want a bondholder and UAW pension cram-down, the House […]
Read more...This blog, over the last couple of months, has intermittently pointed to the difficulties of obtaining trade finance (particularly letters of credit) as playing a role in the fall in international trade. Because L/Cs are a profitable backwater at most banks, serving smaller/midsized customers (big ones are more likely to deal with existing supply chains […]
Read more...After months of negotiations, Congress appears close to a deal on the bailout of the Big Three. While the final bill has not yet been formally introduced and made available for public inspection, major elements are emerging. Roll Call (subscription required), the New York Times, and Bloomberg are reporting the following details: 1. Size of […]
Read more...Conventional wisdom is that the plunge in commodities was due in part to the deflating of a speculative bubble, the balance the result of the nasty contraction now in full force. Once things recover, basic materials should enjoy a strong rebound as China and other emerging markets get back on the growth path. Comparisons to […]
Read more...Further signs that the Chinese economy is in the throes of a serious downturn. From Bloomberg: China’s exports shrank last month and industrial-production growth cooled, Fan Gang, an adviser to the People’s Bank of China, said today. “Things are not so good,” Fan said at a forum in Beijing. “November figures will come out soon, […]
Read more...The Nikkei and Topix are marginally in positive territory as of this writing (the Nikkei up a bare five points) retracing earlier gains. The proximate cause appears to be a downbeat revised GDP report. Stocks initially appeared to shrug off the bad news, taking momentum from the Euro/US rally, but upon reflection, have (for the […]
Read more...Be careful what you wish for. Even a successful auto industry restructuring will involve substantial headcount cuts, deepening the recession underway. A Bloomberg story tallies the likely damage; While the loans may spare General Motors Corp., Ford Motor Co. and Chrysler LLC from collapse, shrinking their workforces would sap an already weak economy, said Paul […]
Read more...One thing I have found troubling is the near-unanimity in the US that we must Do Something about the burgeoning economic crisis, and that Something is big time monetary and fiscal stimulus. Near unanimity is almost never a good thing in the political and policy realm, since conditions and options are sufficiently complicated so as […]
Read more...One of the arguments made by bottom-fishers is that not only are stocks “oversold” (a technical notion that reflects recent trading activity, such as trading volumes, price in relationship to various moving day averages) but are also cheap based on fundamental notions of value. We have been somewhat leery of any long-term valuation notions given […]
Read more...A brief and grim interview with Paul Krugman on CNBC (hat tip reader Dwight). Some key points: The indicators are worse than any point during Japan’s contraction Spending is in free fall Unemployment could exceed 10%, meaningful employment recovery may not occur before 2011 Click here to view.
Read more...In the early days of this blog, I’d regularly compare the Wall Street Journal’s reporting of a news story with that of the Financial Times, because in the vast majority of cases, the Journal had either gotten it badly wrong or was putting a very positive spin on a less obviously cheery fact set. That […]
Read more...Even though the markets took cheer from China’s rate cut today, the move appears to be in response to an intensification of its economic woes. From Bloomberg: Some economic indicators in China showed a “faster decline” in November, the nation’s top economic planner said, underlining the urgency of government measures to support growth and employment. […]
Read more...Although the press has started paying attention to the slowdown in growth in China, the focus has mainly been on Pearl River area, which is light manufacturing, primarily textiles, low capital intensity. But as the New York Times reports, the contraction is also hitting sectors where China has made substantial capital investment. The reason this […]
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