Thursday, May 7, 2009

Links 05/07/2009

Preliminary Stress Test Results – Mish

Weekly Unemployment Claims Decline – Calculated Risk

Wall Street Brokers Seek Out Greener Pastures – Minyanville

This isn't just some transitory shift away from risk that will swing back as soon as the economy gives the all-clear (as if such a definitive message even exists). Americans' education on the perils of too much risk-taking without enough reward is ongoing, and those that believe we're at the bottom of this economic cycle have a fundamental misunderstanding of how we arrived at this juncture in the first place.

Decades of easy money and a government complicit in bailing out the most reckless risk-takers fostered a generation of economic actors with no frame of reference for truly challenging economic times. This mindset -- the entrenched belief that "what goes down must then go up" -- is still pervasive. It's changing, to be sure, but these are time-intensive structural shifts that can't be measured in tweets.

Five Things for Thursday – Minyanville

Manhattan Financial District Condos Get Deepest Cuts – Bloomberg

The Financial District suffered the deepest price cuts in Manhattan in the first quarter as securities firms shed more than 180,000 jobs in the Americas. Manhattan apartment sales fell 48 percent from a year earlier, real-estate appraiser Miller Samuel Inc. said. Sellers lowered prices on almost a third of condo or co-op listings by an average of 11 percent in the Financial District, according to Streeteasy.

Downtown has been “disproportionately impacted by the layoffs and contraction of the financial-services sector,” said Jonathan Miller, president of New York-based Miller Samuel.

Cisco Says The Worst Is Over – Clusterstock

Global Crisis ‘Vastly Worse’ Than 1930s, Taleb Says – Bloomberg

“This is the most difficult period of humanity that we’re going through today because governments have no control,” Taleb, 49, told a conference in Singapore today. “Navigating the world is much harder than in the 1930s.”

Mean Street: Obama’s Fuzzy Detroit Math – The Wall Street Journal

Here’s the truth: The U.S. government had already forked over $4 billion in loans to Chrysler, which it was now writing off. The White House press release never mentions that money. Nor does it mention, the $500 million in Chrysler working capital or the $1.5 billion of loans to Chrysler Financial.

The release does, however, disclose that the U.S. government was now promising another $8 billion plus $280 million in warranty support financing.

Of the $8 billion, $3.3 billion was billed as debtor-in-possession financing “to support Chrysler through an expedited Chapter 11” proceeding. Sounds like temporary financing for the bankruptcy, right?

Wrong. $2 billion of the $3.3 billion was a cash payout to Chrysler’s senior secured lenders. The remaining $1.3 was actual DIP financing.

UN 'stunned' by scale of bail-out – BBC News

"We waited perhaps a decade to get $5bn ($3.3bn) to accelerate development of renewable energy," he said.

We now see $20bn (£13.3bn) paid [to] a car company simply to keep it alive."

California had most subprime loans, study says – The San Francisco Chronicle

The study published Wednesday on the Center for Public Integrity's Web site analyzed government data on $1.38 trillion worth of subprime mortgages made from 2005 to 2007.

The analysis found that about 56 percent of those loans were originated by 15 lenders from California.

China fears bond crisis as it slams quantitative easing – Ambrose Evans-Pritchard

"There is a significant shift taking place in China. They are concerned about the stability of the global financial system so they are not going to sell US bonds they already have. But they are still accumulating $40bn of fresh reserves each month, and they are going to be much more careful where they invest it," he said.

Slashed Ticket Prices Allow Lesser Nobility To Attend Yankees Games – The Onion

NEW YORK—Dukes, barons, viscounts, and earls are applauding the Yankees' recent decision to cut prices on dugout and foul-line field-level seats in half, from as much as $2,500 per game down to an amount the minor houses consider far more reasonable.