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Monday, January 26, 2009

Great Recession Roundup — January 26, 2009

Items of Interest:

Bennet Sedacca / Minyanville:
Welcome to the Depression -- I actually hoped the unprecedented credit unwind would end up in a nasty recession; but I fear a depression is either upon us or will soon be upon us. To be truthful is essential in markets and life: To face head-on the bad news which isn't at all fun or exciting to face.

I hate to say this, as unpopular as it may be: Welcome to the depression. For my reasoning, please read on...

Brad Setser / Council on Foreign Relations:
A truly global slump. Do not look to the emerging economies for good news …

Eliezer Yudkowsky / Overcoming Bias
Investing for the Long Slump
Odds of a Depression -- Cumulative Decline in US GDP over Four Quarters to be -10.0% or worse -- Annualized quarterly Real GDP figures for 4 consecutive quarters sum to worse than -10% (i.e -10.1%)

Annualized quarterly Real GDP figures for 4 consecutive quarters sum to worse than -10%----
John Kerry & Kent Conrad / Wall Street Journal Op-Ed:
Congress Needs to Help the Economy Fast -- Let's not debate another rescue bill in a few months.

The historic inauguration of President Barack Obama went a long way toward renewing American hopes for a better future. But our nation's economy remains on shaky ground. We must act immediately to solidify our economy by addressing weaknesses in our financial and housing industries, while at the same time kick-starting job creation with our national economic stimulus plan.

Our country faces an economic crisis not seen since the Great Depression. The housing collapse caused a crisis in our financial institutions, triggering a broader economic slide that is eliminating jobs, shredding retirement accounts, and wiping out household wealth at a breathtaking pace...
Housing Wire:
Existing Home Sales Rise as Prices Plummet -- Existing-home sales jumped 6.5 percent in December to a seasonally adjusted annualized rate of 4.74 million, led by a surge of sales in the West, the National Association of Realtors reported Monday...

Single-family home sales rose 7 percent to a seasonally adjusted annual rate of 4.26 million in December, while condo sales increased 2.1 percent to 480,000. For all of 2008, single-family sales fell nearly 12 percent to 4.35 million, while condo sales dropped 21 percent to 563,000.

For 2008 as a whole, sales fell 13.1 percent to 4.91 million, NAR said. November and December were the weakest sales months of the year on a seasonally adjusted basis...
Seeking Alpha: Still Blowing Sunshine... But Not Quite as Much
Fareed Zakaria / Newsweek:
There's More To Fear Than Fear — No, we haven't turned the corner on the banking crisis—we can't even see the corner. What's needed is a bold, massive jolt to the system. … From the magazine issue dated Feb 2, 2009 — Franklin Delano Roosevelt's first inaugural address is now known …
Michael Goldfarb / Weekly Standard: Fareedonomics — From Zakaria's latest column...
David E. Sanger / New York Times:
Nationalization Gets a New, Serious Look -- Only five days into the Obama presidency, members of the new administration and Democratic leaders in Congress are already dancing around one of the most politically delicate questions about the financial bailout: Is the president prepared to nationalize a huge swath of the nation’s banking system? ...
David Enrich / Wall Street Journal:
Lending Drops at Big U.S. Banks -- Lending at many of the nation's largest banks fell in recent months, even after they received $148 billion in taxpayer capital that was intended to help the economy by making loans more readily available.

Ten of the 13 big beneficiaries of the Treasury Department's Troubled Asset Relief Program, or TARP, saw their outstanding loan balances decline by a total of about $46 billion, or 1.4%, between the third and fourth quarters of 2008, according to a Wall Street Journal analysis of banks that recently announced their quarterly results...
Mary Kane / The Washington Independent: The Ultimate Bailout Failure: Banks Decrease Lending Under TARP
CitiBank buys Dassault_Falcon 7XNew York Post:
JUST PLANE DESPICABLE — ‘RESCUED’ CITI BUYING $50M JET — Beleaguered Citigroup is upgrading its mile-high club with a brand-new $50 million corporate jet - only this time, it's the taxpayers who are getting screwed.

Even though the bank's stock is as cheap as a gallon of gas and it's burning through a $45 billion taxpayer-funded rescue, the airhead execs pushed through the purchase of a new Dassault Falcon 7X, according to a source familiar with the deal …
Latest Ponzi Scheme To Unravel

Cosmo, Alleged Ponzi Scheme Operator, Surrenders -- A New York businessman sought by U.S. authorities in connection with an alleged $380 million Ponzi scheme was arrested and charged with one count of mail fraud. Nicholas Cosmo, founder of Agape World Inc. in Hauppauge, New York, surrendered at the Long Island Railroad train station in Hicksville, New York. He is suspected of defrauding thousands of investors through his firm, which purports to provide bridge loans, said a person who wasn’t authorized to speak about the case. He was brought in handcuffs to the U.S. Postal Inspection Service in Hicksville at about 7:30 p.m ...
The Definitive Craigslist Guide for the Recession -- To paraphrase one shopping expert, nearly everyone wants better deals on everything these days. Craigslist is a great place to get those deals, and you don't have to be a jerk to get them....
But Craigslist Buyer Beware....

Seattle King5.com:
Armored truck robber uses Craigslist to make getaway -- the robber had planned ahead. In case anyone was hot on his trail, he had at least a dozen unsuspecting decoys waiting nearby, which he recruited on Craigslist...
Paul Krugman / New York Times:
Bad Faith Economics — As the debate over President Obama's economic stimulus plan gets under way, one thing is certain: many of the plan's opponents aren't arguing in good faith. Conservatives really, really don't want to see a second New Deal, and they certainly don't want to see government activism vindicated...

Calculated Risk

MishTalk - Mike Shedlock

Paul Krugman - NY Times

The Big Picture - Barry Ritholtz

naked capitalism - Yves Smith

Pragmatic Capitalism

Washington's Blog

Safe Haven

Paper Economy

The Daily Reckoning - Australia