Top 10 links: F&P's shock warning; a 'financial Stalingrad'; Japanse slump; Worse than terrorism?

Top 10 links: F&P's shock warning; a 'financial Stalingrad'; Japanse slump; Worse than terrorism?

Here's my top 10 links for the last 24 hours or so. I welcome your contributions in the comments below. Here's a good cartoon from Mike Moreu that captures the mood. Hattip to Matt Nolan for this. Mike sometimes misses the mark, but this is a beauty. Almost prescient given the bad Japanese news below and the likely problems our banks will have encouraging Japanese investors to roll over their Uridashi loans to us. Uridashi Tsunami anyone? Holy dishwasher Batman We knew it was bad in the United States and that consumers might shy away from kitchen appliances now they've stoppped buying new houses, but we had no idea it was this bad. Fisher and Paykel Appliances' debts rose an extra NZ$400 million or so in the last 9 months and is now warning of a halving of its profit this year, although a large chunk of this rise was because the debt is in US dollars and is therefore worth more in NZ dollars. It's also making ominous noises about raising fresh capital to reduce its debt. Oh dear. This from NZHerald. Some straight talking Bruce Sheppard writes a clear and hardhitting blog at stuff called stirring the pot, of which he does plenty. This is a thoughtful piece about the independence of independent advisors. His conclusion is that they're often not (independent). Worth a read. The Nationalisation debate Nouriel Roubini and Matthew Richardson from RGE Monitor kick off the debate that needs to be had in the United States over nationalising its essentially insolvent major banks. Here's their piece in the Washington Post. 'Financial Stalingrad' Ambrose Evans Pritchard at the Torygraph pens another bloodcurdling missive. This time it's about Eastern Europe and how a 'financial Stalingrad' of debt in Eastern Europe would hammer European banks. My favorite factoid from this is that 60% of Polish mortgages are denominated in Swiss Francs and the Zloty has halved against the Franc. Blinking heck Stanislav! The Deleveraging Tsunami  Axel Leijonhufvud, the Professor of Monetary Theory and Policy at the University of Trento in Italy, writes an excellent blog article on why this is not an ordinary recession and how the power of de-leveraging by banks will be much more powerful than any fiscal stimuli governments are planning. Also bloodcurdling, but in an academic way.

Credit Crunch is worse than Terrorism Check out this extraordinary warning from the new US director of national intelligence that civil unrest sparked by global economic turmoil was a bigger threat to the United States than terrorism. Probably right, but a little un-nerving. This in the New York Times. A bailout for F&P? Bruce Sheppard is calling on John Key to follow through on his suggestion about bailing out large Kiwi corporates by starting with F&P. Egads. Whatever next? Fonterra? This in Stuff.  Here's a nice comment piece on this from Gareth Vaughan at BusinessDay. Matt Nolan at TVHE reckons F&P shouldn't be bailed out. I agree. Japanese slump Japan's GDP fell at an annualised rate of 12.7%, the fastest slump since the 1974 oil crisis, says Bloomberg. This is a sign of the carnage going on in China, given Japan's largest trader buys many of its components from Japan. This was worse than analyst expectations for an 11.6% fall. Japanese exports fell 13.9%. Not surprisingly, the New Zealand dollar dropped back to 51.8 USc from 52.2 USc because Japanese investors who have plenty of our Uridashi bonds are more likely to repatriate to repair damaged balance sheets. Here's Bloomberg on Yen strength. Lloyds' lardy losses Robert Peston at the BBC summarises the shock and awe behind Lloyds TSB's 10 billion pounds of losses announced late on Friday. We dodged a bullet here. If ANZ hadn't bought the National Bank in 2003 we'd be dragged into this mess. What price now though on HBOS International still being around lending billions to NZ property developers? Not much I would guess.

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