Tuesday, October 14, 2008

Roundup: October 14


The US government will buy up to $250bn of nonvoting senior preferred shares (pari passu with existing preferred) from US banks, paying 5% for five years and then 9% -- so far, Treasury will buy $25bn each from Bank of America/Merrill, Citigroup, JPMorgan, and Wells Fargo, $10bn from Goldman and Morgan, $3bn from BNY Mellon (also appointed the custodian for the TARP), and $2bn from State Street. As Kashkari told everyone last week, executive compensation limits shouldn't pose much of an obstacle The FDIC will also temporarily guarantee new senior debt of institutions it insures (!). Treasury is also developing a program for systemically significant failing institutions. For those keeping track at home, the Big Picture has assembled some of Paulson's recent remarks.

Libor fell yesterday, indicating easing of pressures in the interbank funding market.

Paul Volcker warns of a "considerable recession" in the US. Willem Buiter says the state needs to plan its exit strategy or risk all the pitfalls of "peoples' banking."

Icelandic stocks fell more than 70% after markets there were reopened.

Pepsico warned on profits and is firing 3300 workers.

UK consumer price inflation rose to 5.2% in September.

Obama has proposed a plan to address the economic crisis -- 401k withdrawals without tax penalties and more money for car companies that should go out of business.


Thabo Mbeki says he is confident he will be able to salvage power-sharing talks between MDC and ZANU-PF as the fragile agreement is on the verge of collapse. Meanwhile, in South Africa, the ANC has suspended Mosiuoa Lekota, who was threatening last week to lead a breakaway faction.

Pakistan's Asif Ali Zardari is going hat in hand to Beijing.

Kadima and Labor have signed a draft coalition agreement, bringing Tzipi Livni closer to being able to form a government in Israel.

Militias raised by Brazilian landlords are clashing with peasants in Paraguay.

Mohammed Khatami may be eying a challenge to Ahmadinejad in next year's Iranian elections.

Gazprom is in talks with Alaskan government officials and ConocoPhillips about increasing natural gas supply to North America. That would be Putin, rearing his head.

What are China's "black jails," where migrant workers without permits are interned, really like?

An agreement on troop deployment between the US and Iraq remains deadlocked.

Christopher Hitchens endorses Obama: "Palin is simply a disgrace."


Many states' Attorneys General have called on baby product manufacturers to remove BPA from their products voluntarily, after the FDA failed to take action this summer.

The torrential rains last summer in England came close to overwhelming a storage facility for nuclear material, which would have resulted ina massive release of radioactive water. Furthermore, various alarms and safeguards around the facility were out of commission for significant periods of time.

The NYT discusses and overstates the obstacles to the implementation of the newly signed MARPOL Annex VI, the new International Maritime Organization treaty regarding emissions from ships.

The IHT reports on efforts by companies such as Shell to mitigate the environmental damage their projects do by supporting compensatory efforts elsewhere.

The carbon markets are exhibiting a shift from over-the-counter deals to exchange-based deals over fears of counterparty risks, in an interesting side effect of the credit crisis.

Coastal wetlands may reduce the risks and damages of storm surges less than had been previously thought, because of methodology errors.

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