Daily Digest

Daily Digest - Apr 24

Friday, April 24, 2009, 9:19 AM
  • Economics Is Interesting if You Understand it, Otherwise It Is a Snore! (Photo)
  • DON CORLEONE He will get in touch with you through someone you absolutely trust. That person will arrange a meeting, guarantee your safety…and at that meeting you will be assassinated.
  • Sources: GM to shut most US plants up to 9 weeks
  • Fewer in U.S. Move as Economy Falters (Mainstream article)
  • Housing Bust and Geographical Mobility (Blog article with chart on page)
  • Financial Pugilism and Offbeat Analysis
  • New York Times: Total Revenue Down 18.6 Percent; Debt at $1.3 Billion
  • GE exec says economic crisis resetting capitalism
  • Carbon Derivatives to Become World’s Largest Derivatives Market? (Video)
  • Max Keiser on Corruption, Derivatives, and Copyright Laws…(Video)
  • More on seeds that Max Keiser talks about (Video Scroll to 2hr&46 min point )
  • HR875 Ag. control for small farmers (Video, H/T RowMat)
  • Portfolio Cover Story on Timothy Geithner
  • Delinquencies Rising at Fannie & Freddie (Good Chart on Page)
  • Wells Fargo Made Billions On Mark-To-Market Change
  • Lewis Testified Treasury and Fed Pressed for Silence on Merrill Woes 

Economy

Economics Is Interesting if You Understand it, Otherwise It Is a Snore! (Photo, H/T Jason)

DON CORLEONE He will get in touch with you through someone you absolutely trust. That person will arrange a meeting, guarantee your safety…and at that meeting you will be assassinated.

CHARLOTTE, North Carolina (AP) — New York’s attorney general says government officials pressured Bank of America’s CEO Ken Lewis to complete the bank’s purchase of Merrill Lynch and threatened his job security. A letter from New York Attorney General Andrew Cuomo’s office released Thursday said Lewis testified in February that former Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke threatened to oust Bank of America’s management if the bank tried to back out of buying the investment bank. The government helped orchestrate the acquisition of Merrill by Bank of America over the same weekend in September that another investment bank, Lehman Brothers, went under, setting off one of the most intense periods of the financial crisis. Bank of America acquired New York-based Merrill Jan. 1.

Sources: GM to shut most US plants up to 9 weeks

Nearly all automakers with U.S. factories have closed plants or cut production to deal with the auto sales slump. Earlier this year, GM temporarily closed 20 factories across North America due to weak sales, some for the entire month of January. Chrysler LLC, also subsisting on government loans, closed all 30 of its manufacturing plants for a month in January to counter the auto sales downturn.

Ford Motor Co. also shut down 10 North American assembly plants for an extra week in January, and both Toyota Motor Corp. and Honda Motor Co. have cut production.

AP Auto Writer Kimberly S. Johnson contributed to this report.

 Fewer in U.S. Move as Economy Falters 

"We are normally thought of as a country on the move, but now all levels of migration have almost come to standstill," said William Frey, a demographer at the Brookings Institution, a Washington think tank. "People are just staying put."

 Housing Bust and Geographical Mobility (Blog article with chart on page)

From the Census Bureau: Residential Mover Rate in U.S. is Lowest Since Census Bureau Began Tracking in 1948.

The U.S. Census Bureau announced today that the national mover rate declined from 13.2 percent in 2007 to 11.9 percent in 2008 — the lowest rate since the bureau began tracking these data in 1948.

In 2008, 35.2 million people 1 year and older changed residences in the U.S. within the past year, representing a decrease from 38.7 million in 2007 and the smallest number of residents to move since 1962.

The recent collapse is probably related to the housing bust. It is very difficult for homeowners with negative equity to move.

 Financial Pugilism and Offbeat Analysis

Proinsias O’Mahony: 

“Blogs have gone from being eccentric postings to become essential financial reading:

SOME OF the savviest and most in-depth analysis of the global banking crisis has come from the financial blogosphere. Luminaries like Nouriel Roubini, Nobel economist Paul Krugman and former IMF chief economist Simon Johnson are all active bloggers while equally valuable material is penned by less well-known financial experts.

Their growing influence and popularity is evidenced by the US Treasury’s recent decision to hold a conference call discussing the latest bank rescue plan with high-profile financial bloggers. Here’s a taste of some of the very best financial blogs.”

Another nice mention of TBP in (of all places Irish Times):

“Second only to Calculated Risk in terms of monthly web traffic, it’s not hard to understand the popularity of Barry Ritholtz’s blog. A market strategist and frequent commentator on CNBC and Bloomberg, Ritholtz’s informality and no-holds barred style is made for blogging.

Prescient in his predictions of large-scale financial meltdown, Ritholtz has also made a number of timely calls on the bullish side, correctly predicting a big rally at the beginning of March.”

 New York Times: Total Revenue Down 18.6 Percent; Debt at $1.3 Billion 

One day after The New York Times received five Pulitzer Prizes, The New York Times Company said in its 2009 First-Quarter conference call that total revenue had declined 18.6 percent. The company's debt at the end of the quarter totaled $1.3 billion. 

According to the Times Company's press release this morning, the company suffered an "operating loss of $61.6 million compared with operating profit of $6.2 million in the first quarter of 2008."

In the release, Ms. Robinson conceded that, "The effect of the global economic downturn, coupled with the secular changes affecting newspapers, resulted in significant declines in revenues. Advertisers pulled back on print placements in all categories – national, retail and especially classified. Digital revenues also declined, although modestly, as a result of the weakening economy."

 GE exec says economic crisis resetting capitalism 

The top executive of General Electric Co. said Wednesday he couldn't predict when the recession would end or how bad it will be, but said the global economic crisis has "fundamentally reset" the way companies do business and capitalism itself.

 Carbon Derivatives to Become World’s Largest Derivatives Market? (Video)

Max Keiser on Corruption, Derivatives, and Copyright Laws…(Video)

More on seeds that Max Keiser talks about (Video Scroll to 2hr&46 min point )

HR875 Ag. control for small farmers (Video, H/T RowMat)

http://www.youtube.com/watch?v=LGZL6q-3LOw&feature=player_embedded 

Portfolio Cover Story on Timothy Geithner 

The more I see and hear Secretary Geithner speak on financial services policy, the more I am convinced that this man has not a clue what he is doing and must therefore be acting at the instruction of others — Bob Rubin, Larry Summers and the folks at GS — IMHO.

 Delinquencies Rising at Fannie & Freddie (Good Chart on Page)

Wells Fargo Made Billions On Mark-To-Market Change 

Thanks Mr. Government for continuing to create a massive Ponzi scheme!

 Lewis Testified Treasury and Fed Pressed for Silence on Merrill Woes 

The Journal tells us that Bank of America CEO Ken Lewis told the New York attorney general's office in February that he had been told by Hank Paulson and Ben Bernanke to keep quiet about deteriorating conditions at Merrill Lynch.

 This story strikes me as more than a little weird.

5 Comments

Davos's picture
Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: Daily Digest - Apr 24

And there, second to Jim C., is my favorite moron - sound asleep. No one else looks bored.

But, as much as I gripe I have to be at least a little thankful. Last night Marsh and I had to attend a literacy volunteer fund raiser. A student from Burma spoke. She is happy to be here and not in jail in Burma for for political dissent.

I'm sceptical about BOA and the Godfather. I'm sure it went down that way. I just read (Last storey on blog today) that this might be a "Hey, don't blame me, we'd have made more if the mob didn't hold a gun to my head and make me buy it."

fujisan's picture
fujisan
Status: Gold Member (Offline)
Joined: Nov 5 2008
Posts: 296
Re: Daily Digest - Apr 24

 China's dollar dump plan to be G7 focus - MarketWatch

Quote:

LONDON (MarketWatch) - While foreign exchange is unlikely to be the subject of bold public pronouncements when the world's most powerful finance ministers and central bankers meet Friday in Washington, China's call for the replacement of the U.S. dollar as the world's leading reserve currency is likely to be a hot topic behind closed doors, currency strategists said.

Namely, foreign-exchange traders will be looking for any clues to discussions with Chinese officials as policy makers around the world attempt to piece together the implications of remarks by China central bank governor Zhou Xiauchuan in March for the eventual replacement of the U.S. dollar as the world's main currency with special drawing rights, the quasi-currency issued by the International Monetary fund.

The implication of such a policy would be a weaker dollar, as central banks move to diversify away from the world's largest reserve currency. And that's something that makes a number of policy makers, including officials from the 16-nation euro zone, nervous, analysts said.

The prospect of a substantially weaker dollar is unwelcome to policy makers in the euro zone, Japan or other countries worried about their own exports.

...

ccpetersmd's picture
ccpetersmd
Status: Martenson Brigade Member (Offline)
Joined: Oct 12 2008
Posts: 799
Re: Daily Digest - Apr 24
Davos wrote:

And there, second to Jim C., is my favorite moron - sound asleep. No one else looks bored.

Great, great photo!

SagerXX's picture
SagerXX
Status: Diamond Member (Offline)
Joined: Feb 11 2009
Posts: 2219
Re: Daily Digest - Apr 24
ccpetersmd wrote:
Davos wrote:

 

And there, second to Jim C., is my favorite moron - sound asleep. No one else looks bored.

Great, great photo!

Prez O should give him an autographed copy of that pic when he leaves the administration.  "Heckuva Job!"

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
Re: Daily Digest - Apr 24

Ford posts $US1.4b loss

http://www.abc.net.au/news/stories/2009/04/24/2552376.htm?section=justin


Ford says it has enough cash to keep its plans on track (ABC TV)

Ford Motor has announced it lost $US1.4 billion ($1.9 billion) in the first quarter, and said its restructuring was on track to achieve "break-even or better" results by 2011.

The automaker, the only member of the Detroit Big Three, which includes Chrysler and General Motors, that has not received emergency government aid, said it has enough cash to keep its plans on track.

"Ford finished the first quarter with $US21.3 billion in automotive gross cash and reiterated that based on current planning assumptions it does not expect to seek a bridge loan from the US Government," a company statement said.

"Our results in the first quarter reflected the extremely difficult business environment and weak demand for autos around the world," Ford president and chief executive Alan Mulally said.

"Despite the challenges, Ford made strong progress on our transformation plan by gaining share with strong new products, slowing operating-related cash outflows, reducing outstanding debt, lowering our structural costs and reaching new agreements with the UAW (United Auto Workers)."

Ford said it "remains on track to meet or beat its financial targets based on current planning assumptions, including the target for its overall and North American automotive pre-tax results to be break-even or better in 2011, excluding special items."

For all of 2008, Ford posted a whopping loss of $US14.57 billion, as the auto market collapsed in the latter part of the year.

Ford's loss for the past quarter translated to 75 cents per share, not as bad as feared on Wall Street, where analysts were expecting a deficit of $US1.23 per share.

First quarter revenue, excluding special items, was $US24.8 billion, down sharply from $US39.2 billion a year due to lower sales volume and unfavourable exchange rates.

Ford, which shed its Jaguar and other international nameplates as part of its restructuring, said it has begun "discussions with interested parties regarding the sale of Volvo," the Swedish-based brand.

Ford said Volvo had an operating loss of $US255 million for the first quarter, and that the company would take an "impairment charge" of about $US700 million, reflecting the difference between the book value and estimated fair market value of Volvo.

- AFP

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Login or Register to post comments