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Tuesday, May 5, 2009

Great Recession Roundup — May 5, 2009

Items of Interest:

Tiffany Kary / Bloomberg:
Chrysler Dissidents Must Reveal Identity, Judge Says -- Chrysler LLC dissident lenders must reveal their identities by 10:00 a.m. tomorrow, a bankruptcy judge ruled, rejecting claims that their safety was at risk.

U.S. Bankruptcy Judge Arthur Gonzalez in New York forced the group to file a list of its members publicly, denying their request to reveal their identities only to the bankruptcy court. Gonzalez said the lenders have no evidence that keeping their identities private would help protect them. The group seeks to block an auction of most company assets to an entity managed by Fiat SpA, an outcome Chrysler said would force it to liquidate, costing thousands of jobs...

Todd Harrison / Minyanville:
The Lynch Mob -- I've gotta comment on the one liner than came across my Bloomberg at 4:12 EST.


If you thought the backlash against AIG (AIG) or Freddie Mac (FRE) employees was bad, can you imagine how fierce social mood will be against the hedge fund managers whose single biggest crime was exercising their fiduciary responsibility of seeking payment on behalf of their investors?

Talk about moral hazard, Jeez! Releasing these names to the public in a Googleable age is like throwing chicken wings to starving pit bulls. Make no mistake, this was no accident--it is, pure and simple, a strong arm tactic designed to "teach" investors not to mess with the strong arm of the government...

John Carney / Clusterstock:
New Allegations Of White House Threats Over Chrysler
— Creditors to Chrysler describe negotiations with the company and the Obama administration as “a farce,” saying the administration was bent on forcing their hands using hardball tactics and threats...

Ed Morrissey / Hot Air: Audio: Chuck Todd admits the Lauria allegations are serious
Carl / Israel Matzav: As goes Chrysler so goes Israel?
Bruce McQuain / QandO: Thugs In The White House?
Tom Maguire / JustOneMinute: Madman Across The Table
Steve Stanek / Investor's Business Daily:
Don't Demonize Chrysler Debt Holders... -- President Obama last Thursday gave us reason to wonder what he believes is more important: respect for rule of law or his desire for more government control over the economy...
Clifford S. Asness / Clusterstock:
Hedge Funds Outraged At Obama Bullying But Also Cowering In Fear — Cliff Asness, managing partner at AQR Capital Management, distributed the following letter after listening to Obama blast the Chrysler hedge-fund holdouts. We picked the letter up at ZeroHedge. — Unafraid In Greenwich Connecticut ..
Eamon Javers / The Politico:
AIG bonuses four times higher — The 2008 AIG bonus pool just keeps getting larger and larger. — In a response to detailed questions from Rep. Elijah Cummings (D-Md.), the company has offered a third assessment of exactly how much it paid out in bonuses last year...
Michelle Levi / CBS News: AIG Adjusts Bonus Total Again, To $454 Million
NY Times:
Where Home Prices Crashed Early, Signs of a Rebound -- SACRAMENTO — Is this what a bottom looks like?

This city was among the first in the nation to fall victim to the real estate collapse. Now it seems to be in the earliest stages of a recovery, a hopeful sign for an economy mired in trouble and anxiety.

Investors and first-time buyers, the traditional harbingers of a housing rebound, are out in force here, competing for bargain-price foreclosures...
----Guaranty Bank of Austin, Texas, is demolishing 16 houses at a housing development that it acquired through a foreclosure action. The bank figured it was more cost effective to wreck the houses than try to finish and sell them.
NY Times:
No Sale: Bank Wrecks New Houses -- A Texas bank is about done demolishing 16 new and partially built houses acquired in Southern California through foreclosure, figuring it was better to knock them down than to try selling them in the depressed housing market.

Guaranty Bank of Austin is wrecking the structures to provide a "safe environment" for neighbors of the abandoned housing tract in Victorville, a high-desert city about 85 miles northeast of Los Angeles, a bank spokesman said.

Victorville city officials said the bank told them the cost of finishing the development would exceed what they could sell the homes for...
CNBC Realty Check: Are Bulldozers Now The Best Neighbor?

Wall Street Journal:
House-Price Drops Leave More Underwater -- Real-estate Web site Zillow.com said that overall, the number of borrowers who are underwater climbed to 26.9 million at the end of the first quarter from 16.3 million at the end of the fourth quarter.
Moody's Economy.com estimates that of 78.2 million owner-occupied single-family homes, 14.8 million borrowers, or 19%, owed more than their homes were worth at the end of the first quarter, up from 13.6 million at the end of last year...
Calculated Risk:
Homeowners Underwater --There is substantial disagreement on the number of homeowners underwater (they owe more than their homes are worth)...
US offshores 22,000 green jobs to India -- BANGALORE: As the Obama government gets ready to raise a protectionist wall against offshoring, the US firms seem to be shipping more jobs to India.The US firms have offshored 22,000 green technology jobs to India since January 1, 2009, Doug Brown, co-author of the influential 2009 Green Outsourcing Report, informed TNIE.“We see the (green job offshoring) trend increasing as the US and the UK outsourcing buyers are seeking lower cost in labour and energy consumption. There are few suppliers who match credentials and outcomes of Indian firms,” he said.The annual industry study by Brown-Wilson Group, which surveyed 4,000 global firms, was released last week.

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