Bush defended capitalism today in New York ahead of the G20 meeting this weekend. Portfolio calls the speech "a mixture of free-market platitudes, cryptic code, and outright weirdness." The smart money testified in Washington today -- amongst them Simons, Falcone, Griffin, Soros, and John Paulson. Willem Buiter takes a look at the "non-trivial" possibility of a sterling crisis and even of UK government default: today's must read.
Credit Slips says Paulson's proposal to use the TARP to fund the securitization of consumer credit misses the point -- we don't need a recovery predicated on further expansion of household debt. (Even assuming it were possible.) FT Lex says with the demise of the original TARP plan, "ad hoc policymaking is again the order of the day." Cases in point? The FDIC will back $165bn of GE Capital debt. Chris Dodd says the TARP has the authority under existing legislation to help car companies; Barney Frank says it doesn't. And CIT has applied to become a bank holding company in order to be allowed to put its grubby little fingers in the cookie jar. John Carney counts $3tr of bailout so far and EconomPic has a lovely visualization. (And, separately, a beautiful chart of globalization.)
Intel has warned on its earnings estimates. Tata has warned it might need to raise capital. US initial jobless claims jumped to 516k from 484k last week -- we are now well past blaming hurricanes for joblessness. Claims are at their highest level since September 2001. German GDP fell 0.5% in Q3, its second quarterly decline -- the economy is officially in recession. The US trade deficit is declining -- but so are exports, as the world economy sinks into recession.
Moody's has put Poland's banking system on negative outlook, warning banks may be about to tighten forex lending. Meanwhile, the bailout of Iceland has been delayed by negotiations over the compensation of foreign savers with accounts at Icelandic banks. Sebastian Mallaby argues for the IMF as a global lender of last resort.
Brad Setser says that China's new tax rebates on exports are unhelpful and counter to the stated policy aims of the Chinese leadership to shift towards an economy led by domestic demand. There are rumors China is considering a stock stabilization fund to buy up domestic shares. Chinese industrial production growth fell to 8.2% in October. Hong Kong's Citic Pacific will be bailed out by its mainland parent to the tune of $1.5bn.
Australia has drafted stringent new laws making the ban on naked short selling permanent and imposing strict disclosure rules on short positions in equities. Canada's Finance Minister Jim Flaherty is pushing the country's boring but effective approach to regulating the markets. A court order has suspended equity trading in Kuwait until November 17. Russia shut its markets today temporarily amidst trading turmoil, as steep drops followed panic over the falling price of oil and the stability of the ruble -- Reuters reported Russia and China have suspended talks over $25bn of loans to Russian oil companies; Russia denied the report.
What happens at zirp -- zero percent effective interest rates? Gavyn Davies says the UK must start "thinking like South American dictators" and consider printing money to avoid deflation.
North Korea is barring nuclear inspectors from taking soil samples and is confining inspections to Yongbyong. China has stationed more troops on the North Korean border to guard against an influx of refugees in case of instability or regime change.
China Media Project looks at the punishment of ordinary netizens for things they've written on blogs. Hung Huang writes about Chinese outrage over poisoned food for the NYT's Economix. What can we learn from China's Cultural Revolution -- and the "Grand Democracy" it championed?
Shimon Peres has praised King Abdullah's peace plan, which calls for Israel to withdraw from the occupied territories in exchange for recognition by Arab nations.
In an interview with Le Figaro, President Medvedev said that he would end plans to place missiles in Kaliningrad if President-elect Obama would end the missile defense program in Poland, announced in the aftermath of the Georgian war. The General in charge of the Missile Defense Program, unsurprisingly, warns of dire consequences to the US (how, exactly, is unclear) if the plan is scuttled. Separately, export duties on Russian oil have driven the effective price of oil that producers receive down to $10, with dramatic effects on producers' profitability. In response to Europe's strategic vulnerability to the Russian energy sector, the EU will have a summit to discuss issues of energy independence through the so-called Southern route, Uzbekistan, Kazakhstan, and the Caspian. More colorfully, Vladimir Putin reportedly told Sarkozy that "I am going to hang Saakashvili by the balls," when the French president was in Moscow in August to broker a ceasefire in Georgia.
The Economist and the CND - together at last.
Axis Maps offers yet another way to visualize the election results.
The IEA has released its World Energy Outlook 2008 -- nice charts of world energy subsidies. The Oil Drum takes a close look at the IEA's demand model.
Songbirds listen to each others' songs and can detect mistakes.