Tuesday, November 18, 2008

Roundup: November 18


"There is no playbook for responding to turmoil we have never faced," Hank Paulson writes in an editorial in the NYT defending his actions so far. He and Bernanke testified today before Congress. Steven Davidoff takes a skeptical look at the first draft of an auto bailout bill.

China Eastern Airlines and China Southern Airlines, two of the country's three largest state-run carriers, have applied for emergency government subsidies. Bank of America will exercise its option to buy another 8.35% of China Construction Bank. GM is to sell its 3% stake in Suzuki in order to raise cash for operations; Ford is to sell its stake in Mazda. Russian steelmaker Severstal has suspended an $8bn capex program. Home Depot says it may see sales down 8% for the year. Lowe’s, the second largest US home improvement retailer, reported Q3 earnings down 24%. Target reported Q3 earnings down 24 and said the profitability of its credit card business fell 83% on bad debt charges.

Trading was halted again today on the RTS. The Telegraph comments that ordinary Russians are still almost completely unaware of the economic troubles the country faces.

Goldman is forecasting that US GDP could drop as much as 7.8% in Q4 in a worst case. UK rents fell in Q3.

UBS is following in Goldman's steps, and will not pay bonuses to 12 top executives this year. The Swiss bank is also considering both clawing back bonuses already paid in past years to executives and making future bonus payments conditional on the long-term performance of the bank.

Economix punts a new Gallup survey measuring perceptions that companies are hiring and firing. And separately, asks how many jobs would actually be lost if the Big Three were allowed to fail.

Dylan Ratigan says put limits on the maximum size of corporations and encourage short-selling in order to prevent another crisis like this one.

Chuck Grassley is asking the inspector-general of the Treasury to look into the possibility that former Goldman employees at Treasury have enacted policies that preferentially benefit their friends.

Home sales in Southern California were at their highs of the year in October, buoyed by sales in foreclosure. The homebuilders' confidence index is at a record low.


The NYT looks at the decisions over domestic spying which Obama must make in the first months of his presidency, a key test of positions he held as a Senator.

A WSJ Europe editorial foots the idea of international trusteeship for Abkhazia as a way out of the Georgia morass that doesn't reward Russian military action. Amnesty International says both sides to the Georgia conflict are obstructing the investigation of war crimes allegations and international monitors need to be allowed into the border region.

As the incredible record of corruption under US occupation comes to light, the Iraqi government of Nouri al-Maliki is quietly firing oversight officers. Ali Larijani, the speaker of the Iranian Majlis, has urged Iraqi politicians to oppose the agreement on the state of US forces in Iraq.

Martin Fletcher writes in the Times on how misguided US policy paradoxically strengthened and radicalized Islamists in Somalia and has helped lead to today's lawlessness.

Colombia has declared a state of emergency after riots broke out over large-scale Ponzi schemes.

The criminal trial in the murder of Anna Politkovskaya will be open to the public -- for whatever that's worth.


President-elect Barack Obama gave a surprise video presentation at the Global Climate Summit; his remarks anticipate the passage of a U.S. cap-and-trade scheme and a large U.S. role at the Posnan talks for a successor to the Kyoto Protocol. These are hopeful signs for the future of U.S. and world climate policy.

California Governor Schwarzenegger issued an executive order raising the goal for California's Renewable Portfolio Standard (RPS) to 33% by 2020. The RPS refers to the percentage of the energy mix for electricity generation that comes from renewables. Green Car Congress has the details.

The Oil Drum continues its fascinating in-depth study of the 2008 International Energy Agency World Energy Outlook by looking at the analysis of Saudi Arabia's hydrocarbon resources. Assumptions within the report are questionable, and some of the supporting research has been shown to be false. The take-home lesson is this: Be skeptical of reported results in the energy and climate fields unless you have done or read a detailed analysis of the methodology, data, and assumptions.

GE shipped its 10,000th 1.5MW wind turbine yesterday, a milestone for a company that only entered the wind turbine market six years ago. EcoGeek has an interesting and worthwhile interview with the VP of Renewables at GE that goes through some of their experience and plans in the wind turbine market in the last six years.

Robert Amsterdam says Europe may be less dependent on Russian gas than the conventional wisdom has it.

As much as 1/3 of Mars's surface area may have once been underwater.

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