Friday, October 31, 2008

Roundup: October 31


Barney Frank has warned that banks using funds from TARP for purposes other than lending is illegal. Of course, enforcing this is difficult, as funds can be reallocated in response to excess government inflows, masking abusive behavior.

Bloomberg reviews Volvo's abysmal net European heavy truck orders amidst extraordinarily bad news from the shipping sector, a bellwether for economic health. Meanwhile, Barack Obama says he supports the "overhaul" of the U.S. auto industry, as pressure mounts for the Treasury to find a solution to the GM-Chrysler talks before the election. The NYT editorializes in favor as well, but can't seem to decide how it wants to argue for a bailout.

Almost half of Nevada homeowners hold negative equity in their houses.

The Chicago Purchasing Managers' Index for October came in far below expectations.

A U.S. judge has frozen various Argentine pension assets to satisfy unpaid debt from the funds. As the Argentine government under Ms. Kirchner is trying to seize control of the pension funds, in a move widely seen as a bid to increase government assets to meet debt obligations, this could be a harbinger of yet another Argentine sovereign default.

The Bank of Japan cut its benchmark interest rate from 0.5% to 0.3%, following Wednesday and Thursday's announcement of a $50bn stimulus plan.

Moscow's foreign reserves have fallen under $500bn, dropping by 6% in the past week to $484bn. Only about a third of the fall came in the form of outlays to support the ruble and Russian companies; the remainder was caused by the fall in the pound and euro against the dollar. Russia may be criminalizing nonrepayment of loans.

The Big Picture runs a series of vintage Bush videos in which he talks about homeownership and the American Dream.

FT Alphaville warns that in a low-rate environment the risk of money market funds breaking the buck rises.


General Petraeus today takes over at US CentCom, in charge of all operations in the Middle East and Afghanistan, including the Iraq and Afghanistan wars. We have already seen his influence in the proposals for negotiations with the Taliban under certain conditions and in encouraging cooperation and development in the Pakistani-Afghan border regions.

Russia has insisted that its nuclear arsenal is entirely secure, in response to a speech by Secretary of Defense Robert Gates at the Carnegie Center a few days ago. He described Russia's tactical and strategic weapons as probably safe, but questioned whether uranium and other radioactive materials had gone missing in the 1990s.

It looks as if armed American agents will be sent to Mexico as part of a mission in the war on drugs called "Plan Mexico," judging by statements from Condoleeza Rice.

Thabo Mbeki has declared in a public letter that he has retired entirely from public life, and that he will not seek any office or public influence now that he is no longer president.

Six thousand refugees have crossed the Congo-Uganda border in the wake of the violence in Eastern Congo between government troops and those commanded by renegade general Laurent Nkunda, according to the UN. The Ugandan army has been deployed to protect the border from foreign forces. The Guardian in an editorial attacks the UN force for its failures in Congo despite having the strongest mandate of any peacekeeping force.

Iran's foreign reserves have fallen to at least $25bn, and possible as low as $9bn, because of falling oil prices. Iraq will bust its budget by $13bn in the face of falling oil prices.


Britain will start a feed-in tariff for small (3MW or less) renewable energy generators in 2010. Feed-in tariffs have been effective in Germany and Japan in supporting the development and growth of renewable generation.

BSI British Standards has debuted a standard methodology for carbon footprinting, one of the first in the world, and an important step in developing standard, easily comparable footprint numbers.

RFID chips in U.S. passports could be tampered with or tracked, according to reports.

Aquafornia has collected press reactions to California's water shortage, amid calls for more conservation in a drought that may end in rationing in 2009.

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