Tuesday, September 30, 2008

Roundup: September 30


Obama and McCain are shilling for the bailout plan, and making silly proposals about increasing the limit on FDIC insured accounts to $250k, ostensibly to help small businesses.

Interfluidity is pitching a modified debt-for-equity bailout that would partially preserve bank creditors. Credit Slips says the executive compensation limits in the bailout bill that failed to pass yesterday were a "fraud". Buiter says Congress is cutting off our collective noses to spite our faces. Lo and behold, members of Congress who voted for the bailout got more campaign contributions from banks than those who voted against.

Murder on the dance floor, erm, in the money markets. Overnight dollar Libor was fixed at 6.875% yesterday in advance of the quarter (and, for some, fiscal year) end. No interbank lending.

Ireland has guaranteed EUR400bn of liabilities at six banks in order to ease short-term funding pressures. Fitch put Citibank’s AA- rating on negative watch.

Calculated Risk has a great graph breaking down the Case-Shiller house price index declines from the peak by city, and graphs the indices from 1987 to date. Rough estimates of the number of households with negative equity give an estimate of total mortgage losses for lenders between $800bn and $1.3tr.

Steven Davidoff looks at the provisions of the AIG bailout -- structured to avoid any meaningful shareholder say on the fate of the company.

Bain Capital and Hellman & Friedman are buying Lehman's asset manager, Neuberger Berman, for $2.15bn. Lehman was expecting to get $8bn for the unit in the week before its collapse..

Taiwan has banned short-selling of all equities until October 14.

The UK economy did not grow in Q2. Real consumer spending in the US fell 2.7% in Q3.


Ha'aretz comments that Ehud Olmert's interview yesterday, in which he said Israel must withdraw from the occupied territories, is too little and comes too late to make a difference.

Mullah Mohammad Omar has urged US and NATO troops to leave Afghanistan before they face the fate of the Soviet occupation.

There is hope the new administration in Zimbabwe will allow a more sane AIDS policy as NGOs are allowed to resume work. Morgan Tsvangirai has warned that if a government is not established soon the country faces the risk of famine. The CFR has notes on "Planning for a post-Mugabe Zimbabwe."

Mikhail Gorbachev and Alexander Lebedev are forming an independent political party in Russia.


Germany is lobbying for certain heavy industries to be exempt from the new auction format for the European ETS. Partial free allocation of permits threatens to undermine the entire reform of the ETS framework, as national lobbying is the dominant force in strangling EU policy.

The Los Angeles Times publishes an important editorial on the "bursting of the green bubble," which, though misguided in its approach, illustrates the danger that the current economic crisis poses for carbon regulation.

A simple and cheap device can increase the fuel efficiency of diesel engines by as much as 10% and reduce their particulate emissions by as much as 90% by reducing the viscosity of fuel before it is injected.

The Oil Drum runs a good overview of methane capture from coal seams, a practice that reduces greenhouse gases and produces a substantial amount of energy.

The Economist is running a (slightly stacked) debate on water pricing.

It may be snowing on Mars.

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