Top 10 at 10: Fed may print more; Westpac's bungle; Roubini profile; Geithner disaster zone
21st May 09, 10:03am
Here's my top 10 links at 10 am. I welcome your comments and suggestions in the comments below. Dilbert is on a roll with his MBA series. I'd just like to say that some of my best friends have MBAs... 1. It emerged today that Westpac had accidentally deposited NZ$10 million into the account of a Rotorua couple who owned a service station and now the couple had fled the country with some of the money. NZPA reported on NZHerald.co.nz that Westpac had launched court action to recover the money. 2. The US Federal Reserve is considering increasing the size of its government bond purchases (money printing). The minutes of its last rate setting meeting show the issue was talked about, Bloomberg reports. Meanwhile the Fed has downgraded its forecasts for the economy and upgraded its forecasts for unemployment to almost 10%. 3. Japan's economy contracted at an annualised rate of 15.2% in the March quarter, on top of an annualised fall of 14.4% the previous quarter, Bloomberg reported. This was marginally better than expectations, but is going to hurt the world's second largest economy and the third largest buyer of New Zealand's exports. 4. Bank of America has raised US$13.5 billion through a share issue as it scrambles to raise US$33.9 billion to meet the demands of US regulators after its stress tests. America's biggest bank plans to raise the rest through asset sales and profit generation, Bloomberg reported 5. Here's an excellent profile of NYU Professor (Dr Doom) Nouriel Roubini (left) in the The New Republic that asks the question: Is Roubini lucky or just good. HT FTAlphaville. 6. The Washington Post paints a devastating picture of what's really going on inside Tim Geithner's Treasury. He can't make decisions, he hasn't appointed his staff, he is being bossed around by the White House and Larry Summers, and all the major bailout programmes are months overdue. He's out of his depth and obviously needs to be sacked. I'm willing to bet he is gone by Christmas. 7. Now is the time to buy if you want a new car and you live in the United States. Chrysler is forcing 789 dealerships with 44,000 cars on their forecourts to close, while GM is forcing 1,100 dealers with 65,000 cars to close. Those 109,000 cars will have to be sold in firesales in weeks, the Chicago Tribune reported.
"It's not a matter of 'if.' We will sell them all," one exiting car dealer in Arkansas said. "It's not a bad idea to go in there with a lowball price," he said.8. This is an essential read for anyone trying to get inside the heads of even the sophisticated Americans that geared themselves up with too much mortgage debt. An economics correspondent for the New York Times, Edmund Andrews, lays his financial soul bare in this riveting piece. The chilling final note is that he has defaulted on his mortgage for 8 months and no one at the bank has contacted him to foreclose and sell the house from under him. His bank is just too overworked dealing with all the other defaulters. 9. Barry Ritholz at the Big Picture points out that former presidential candidate and congressman Ron Paul is calling for a full audit of the US Federal Reserve. His bill now has 165 co-sponsors. 10. Mish points out some excellent comments on the need for massive US deleveraging from the San Francisco Federal Reserve. Worth a look for some great charts.