Yet another saved by the bail out bell as the bubble pops story is emerging, this time Dubai World.
Abu Dhabi’s government provided $10 billion for Dubai’s financial support fund to help repay obligations, including the $4.1 billion needed for Nakheel PJSC’s Islamic bond maturing today.
You can bet stocks are going to take off like a rocket tomorrow.
Dubai is also quickly throwing together a comprehensive restructuring law, following international standards for transparency and creditor protection (for us Western folk, read corporate bankruptcy), and issued this statement:
This law will be available should Dubai World and its subsidiaries be unable to achieve an acceptable restructuring its remaining obligations.
Leading Greek economists and bankers yesterday warned George Papandreou, prime minister, that he had to announce bold initiatives to rescue the country's collapsing bond market and avert the possibility of defaulting on a rising public debt.
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The mayor of Kabul was back at his desk the day after was sentenced to four years for corruption. Afghanistan is awash in only one kind of money these days - drug money.
One of the poorest nations on Earth exports $10 million every day in drug money, most of it right out of Kabul airport, and the world's bankers are hooked on it like junkies. In fact, this drug money probably did more to save the world's banking system than all the government bailouts.
Drugs money worth billions of dollars kept the financial system afloat at the height of the global crisis, the United Nations' drugs and crime tsar has told the Observer.
The Wall Street Journal has an investigative piece outlining how Goldman Sachs Fueled AIG Gambles. It appears Goldman Sachs acted as a middleman for even more CDSes from other banks.
Goldman originated or bought protection from AIG on about $33 billion of the $80 billion of U.S. mortgage assets that AIG insured during the housing boom. That is roughly twice as much as Société Générale and Merrill Lynch, the banks with the biggest exposure to AIG after Goldman.
In Goldman's biggest deal, it acted as a middleman between AIG and banks, taking on the risk of as much as $14 billion of mortgage-related investments. Then Goldman insured that risk with one trading partner—AIG, according to the Journal's analysis and people familiar with the trades.
The Godfather of Economics, Paul A. Samuelson has died. He was 94.
Not only did he write the economics textbook that I have worn to shreds and is the standard undergraduate text, he also didn't claim fiction on trade:
The Stolper-Samuelson Theorem
Mr. Samuelson provided a mathematical structure to study the impact of trade on different groups of consumers and workers. In a famous theorem, known as Stolper-Samuelson, he and a co-author showed that competition from imports of clothes and similar goods from underdeveloped countries, where producers rely on unskilled workers, could drive down the wages of low-paid workers in industrialized countries.
During an auction of Iraq’s best undeveloped oil fields that concluded Saturday, Baghdad awarded international companies development rights to seven fields that within a few years could nearly double the country’s oil production.
It's very unclear who got what, but considering the billions the U.S. has poured into Iraq, one would think we would at least get the oil. We spend trillions in Iraq so China can develop the oil?
The corporations that won represented a diverse group of nations, including Angola, Malaysia, Turkey and China. They were vying for 20-year service contracts that will pay them a fee for each barrel they produce above a government-set baseline.
On The Economic Populist you might have noticed the middle column. We try to list other sites and blogs who have exceptional insight and writing on what is happening in the U.S. economy.
Sometimes though, one cannot say it better but miss those who did.
Must Read #1
In reference to this WaPo Bio on Neel Kashkari, the London Times pulls out some nice little tidbits. The $700 Billion number to ask Congress for, later known as TARP, was literally made out of thin air. They had no idea in reality how much money they needed.
One must conclude Paul Volcker is so dismayed with what is going on under the guise of financial reform, he's giving speeches to seemingly almost anyone who will listen and print it up.
The “safety net” provided by the U.S. government “should not be extended beyond the core commercial-banking business. hey can do trading and do anything they want, but then they shouldn’t have access to the safety net.
It's Friday Night! Party Time! Time to relax, put your feet up on the couch, lay back, and watch some detailed videos on economic policy!
Taking a break from the never ending frustration of corruption in U.S. politics and obtaining real financial reform, let's move to a currently low demand commodity, oil. This CBC documentary, from 2007, explores China's new high oil demand. China's economy and especially it's industrial output surged 19.2% yr/yr, so one can be rest assured oil soaring prices and global demand eventually will return.
It's Friday Night! Party Time! Time to relax, put your feet up on the couch, lay back, and watch some detailed videos on economic policy!
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