Now some of the same legal questions raised in AIG's case might also be applied to Lehman Brothers, the people said.Read the rest of this post...
Speaking to reporters on Wednesday, Cuomo suggested his office would investigate similar payments at other companies, although he declined to identify companies or individuals.
"It is not just compensation but incentives, perverse incentive for executives to produce short-term profit rather than long-term growth,'' Cuomo said.
Cuomo's office declined further comment, citing its policy surrounding ongoing investigations. A Lehman spokeswoman also declined to comment.
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Thursday, October 23, 2008
Cuomo now looking into Lehman compensation
Hint, hint. Anyone in Congress paying attention here? How many people really think American taxpayers are going to angry about investigating the massive bonuses paid out on Wall Street during this crisis period? Socialism for CEOs is hardly popular outside of Wall Street. Let's see how Lehman explains away a few billion in bonuses amongst friends, even after bankruptcy.
Senior McCain aides are shopping around their resumés
Wow. Yet another devastating story for the McCain campaign. (Joe calls this story "luscious.") Politico writes about the GOP "circular firing squad" that's begun over who lost the election for John McCain. Here are a few excerpts - but please read the entire story, it's a doozy. Seriously, this story will put such a smile on your face, you'll thank me:
With despair rising even among many of John McCain’s own advisors, influential Republicans inside and outside his campaign are engaged in an intense round of blame-casting and rear-covering—-much of it virtually conceding that an Election Day rout is likely.Read the rest of this post...
The candidate’s strategists in recent days have become increasingly vocal in interviews and conference calls about what they call unfair news media coverage and Barack Obama’s wide financial advantage — both complaints laying down a post-election storyline for why their own efforts proved ineffectual.
These public comments offer a whiff of an increasingly acrid behind-the-scenes GOP meltdown—a blame game played out through not-for-attribution comments to reporters that operatives know will find their way into circulation....
At his Northern Virginia headquarters, some McCain aides are already speaking of the campaign in the past tense. Morale, even among some of the heartiest and most loyal staffers, has plummeted. And many past and current McCain advisors are warring with each other over who led the candidate astray.
One well-connected Republican in the private sector was shocked to get calls and resumes in the past few days from what he said were senior McCain aides – a breach of custom for even the worst-off campaigns.
“It’s not an extraordinarily happy place to be right now,” said one senior McCain aide. “I’m not gonna lie. It’s just unfortunate.”
“If you really want to see what ‘going negative’ is in politics, just watch the back-stabbing and blame game that we’re starting to see,” said Mark McKinnon, the ad man who left the campaign after McCain wrapped up the GOP primary....
Offered a chance to respond to the suggestion that the McCain campaign is awash in defeatism, a McCain official delivered a decidedly measured appraisal: “We have a real chance in Pennsylvania. We are in trouble in Colorado, Nevada and Virginia. We have lost Iowa and New Mexico. We are OK in Missouri, Ohio and Florida. Our voter intensity is good and we can match their buy dollar for dollar starting today till the election. It’s a long shot but it’s worth fighting for.”
....A New York Times Sunday magazine piece chronicling McCain’s campaign featured numerous not-for-attribution McCain staffers participating in what amounted to a campaign autopsy.
McCain concedes
That's Markos' headline, and he's right. I posted earlier about McCain announcing that he is not attending his own election night party because of "space limitations" (I guess he can't get a ticket). Markos notes, correctly, that this is basically a concession of defeat. It's also a big slap in the face to McCain's own supporters:
McCain knows he's going down, we get that. But there are supporters of his that are still busting their ass, and he's basically telling them that he doesn't give a flying f*ck. It's a breathtaking insult to his staff, to his volunteers, to his party, and even to America. It doesn't matter if the bulk of his audience will be watching him on the television, he owes his people (and even the nation), one last rally.Read the rest of this post...
So this is how the cowardly McCain wishes to go out -- not with a bang, but with a whimper.
Indiana election official calls Obama "black Hitler"
Indiana is a key swing state. Her job is overseeing vote counts. This woman needs to lose her job, now. More from AP:
A Republican county election clerk distributed copies of an apparent chain letter referring to Democratic presidential nominee Barack Obama as a "young, black Adolf Hitler" to two employees but later told police she intended it to be a joke....Even the Republicans agree that this woman is now tainted. She needs to be fired NOW. Read the rest of this post...
Doug Lechner, Republican Party chairman in the county just south of Indianapolis, said the letter was unacceptable and taints Jackson's ability to appear unbiased in administering this year's election. County clerks are responsible for training poll workers, providing all voters an opportunity to cast their ballot without influence, and overseeing vote counts.
BREAKING: Former WH press secretary, Scott McClellan, voting for Obama
It ain't Elizabeth Hasselback (or whatever her name is) appearing with Sarah Palin, but in my corner of the universe this is news. The dams are breaking.
Scott McClellan, the former White House press secretary who sharply criticized President Bush in his memoir last spring, told CNN Thursday he's voting for Barack Obama.All of these big-name Republican endorsements have got to hurt. They add to a sense of inevitability, and of despair. It makes it harder to get volunteers for McCain's campaign, and even harder to drum up any last-minute donors - after 40% of your life savings gets wiped out on the stock market, do you really want to invest in another sure loser? This is all very bad. And thus very good. Read the rest of this post...
"From the very beginning I have said I am going to support the candidate that has the best chance for changing the way Washington works and getting things done and I will be voting for Barack Obama and clapping," McClellan told new CNN Host D.L. Hughley.
McCain may skip his own election night party
Mccain isn't attending the party "due to space limitations." What, did Sarah Palin invite all of her dresses? Talk about wrong message to send your supporters. It looks like he's just given up.
Read the rest of this post...
McCain thinks New Yorkers and Pentagon employees who died on September 11 are fake Americans
They're from the DC area and New York City, and according to McCain today, all of us who live in the DC area and New York City are elitists who go to cocktail parties and turn our noses up at "real Americans" - that is, when we're not being attacked by Al Qaeda. What a desperate, hateful, arrogant, shell of a real man McCain has turned into. (Not to mention, it's still funny as hell that McCain, with 12 homes, 13 cars, a wife worth $100m, and a running mate who just went out and bought $150,000 in clothing, has the nerve to accuse anyone of being an elitist. I guess you're an elitist in the McCain family when you hit your 13th home and your second $100m.)Funny, McCain had no problem using footage of New Yorkers dying in the World Trade Center on September 11 during his own convention. That was a first for US politics, using 9/11 for political gain (well, okay, not a first as George Bush has been doing it for years). But oh how quickly John McCain tires of New Yorkers. Are they patriots or elitists? Does McCain include New York firefighters when he brands all New Yorkers as fake, elitists who aren't real Americans? He just did. And the former mayor of New York City is doing robo-calls for McCain now - are those elitist un-American robo-calls? What does Giuliani have to say about this smear of our dead and our heros?
Now watch an adult explain that we are all Americans:
Read the rest of this post...
In Montana, Obama is up by 4; In Georgia, Obama is down by 2
This morning, we looked at some traditional battleground state polls, which were all very good for Obama. This afternoon, let's look at some hard core red state polls, which are also amazingly good for Obama.
Via Atrios, Obama is leading in Montana: 44% - 40%.
Via Political Wire, Obama is trailing in Georgia: 46% - 44%. Read the rest of this post...
Via Atrios, Obama is leading in Montana: 44% - 40%.
Via Political Wire, Obama is trailing in Georgia: 46% - 44%. Read the rest of this post...
Join in the Netroots Nation auction
Good cause, and it actually looks kind of fun:
The Netroots Nation auction is now open for bidding!At least go to the site and check it out, it does look fun. Read the rest of this post...
Bidding will be open until October 23, 2008, with proceeds going to support that fabulous annual mecca for bloggers, Netroots Nation. We've got some amazing things planned for August 13 - 16, 2009 in Pittsburgh, PA, but in order to make them happen, YOUR ASSISTANCE IS REQUIRED!
Auction items range from once in a lifetime opportunities like lunch with Lawrence Lessig or coffee wtih General Wesley Clark, to OrangeClouds115's famous Cookies of Mass Destruction. We have booty like an autographed Dwight Schrute bobblehead doll as well as super cool sustenance items like Kobe beef offered by NE Senatorial candidate Scott Kleeb and his fabulous wife, Jane! And, at the risk of sounding trite, we have SO MUCH MORE!
So, tell your friends, family, community. Let the bidding begin!
Greenspan joins Palin on idiot list
What can you even say about this rubbish?
Former Federal Reserve Chairman Alan Greenspan told Congress on Thursday he is "shocked" at the breakdown in U.S. credit markets and that he sees more layoffs and a jump in unemployment ahead.Read the rest of this post...
In prepared testimony, Greenspan said the current global financial crisis is a "once in a century credit tsunami" that policymakers did not anticipate.
Greenspan was to be the leadoff witness at a House hearing lawmakers called to question past key financial players about what they felt caused the most grave financial crisis since the 1930s.
The witnesses were also expected to be asked how they thought the government would deliver the nation from the economic turmoil.
Greenspan was the chairman of the Federal Reserve for 18 1/2 years. In testimony prepared for the House Government Oversight and Reform Committee, he voiced shock over the present turn of events and called conditions deplorable.
He said that he and others who believed lending institutions would do a good job of protecting their shareholders are in a "state of shocked disbelief." And Greenspan also blamed the problems on heavy demand for securities backed by subprime mortgages by investors who did not worry that the boom in home prices might come to a crashing halt.
Huff Post = Politico + Drudge
Some amazing new Web traffic numbers for blogs and political sites. In a nutshell, if you add up the traffic of Drudge and the Politico, who do you get? The Huffington Post.
The release also points out that a number of political sites saw massive gains in traffic over the past year. Our figures show the same (again, per Google Analytics):
So, anyone who's thinking of advertising on the blogs, now is the time. All of us, collectively, have never seen traffic like we're seeing in this pre-election period. If you want to get your brand out to a huge, progressive, well-educated, and well-off audience, now is the time and here is the place. You can buy ads directly via our site in the next column, to the right. (Look for the "How to advertise in this spot" link.) And to advertise in other choice spots on the blog, like the top banner, or in the box between posts, contact me directly:
americablog@starpower.net
And PS, we're days away from having our 100,000,000th visitor to AMERICAblog. Very cool timing. Read the rest of this post...
HuffingtonPost.com led among a group of selected stand-alone political blogs and news sites with 4.5 million visitors in September, up 472 percent versus year ago, while Politico.com attracted 2.4 million visitors (up 344 percent) and DrudgeReport.com saw 2.1 million visitors (up 70 percent).Now, the numbers aren't entirely correct. Huff Post gets far more traffic than the 4.5m visitors, and we're even listed in the story, with a claim that we had 100,000 unique visitors last month - in fact, per Google Analytics, we had 863,000 unique visitors last month. But still, the numbers are illustrative in a relative sense, comparing the various sites. And Huff Post clearly beats the bejeesus out of Drudge.
The release also points out that a number of political sites saw massive gains in traffic over the past year. Our figures show the same (again, per Google Analytics):
AMERICAblogWe saw our blog traffic nearly trip the night of the 2006 election, to over 100,000 unique visitors that evening. I'm expecting a lot more with a presidential election on the line, and due to the fact that we already had 120,000 uniques in one day earlier this month - just my guesstimate, but I'm counting on 200,000 uniques that night (no promises, but we'll see).
SEP 08: 863,254 uniques
SEP 07: 330,780 uniques
260% increase in traffic
So, anyone who's thinking of advertising on the blogs, now is the time. All of us, collectively, have never seen traffic like we're seeing in this pre-election period. If you want to get your brand out to a huge, progressive, well-educated, and well-off audience, now is the time and here is the place. You can buy ads directly via our site in the next column, to the right. (Look for the "How to advertise in this spot" link.) And to advertise in other choice spots on the blog, like the top banner, or in the box between posts, contact me directly:
americablog@starpower.net
And PS, we're days away from having our 100,000,000th visitor to AMERICAblog. Very cool timing. Read the rest of this post...
Serial homophobia is a hell of a way for Mormons to seek respect
For years now, the Mormon Church has gone out of its way to gay-bash. They get involved in gay-bashing efforts far beyond Utah -- gay-bashing efforts that have no impact on their church -- dumping millions of dollars to help take away the rights of gays and lesbians in states across America. And they're doing it again in California this year. The Mormon Church has given $8.4 million to the anti-gay proposition in California - the one that would revoke the already-existing marriages of gay couples, instantly turning their children into bastards. And in fact, other estimates show the Mormons giving as much as $17.67 million to the California gay-bashing effort - a full 77% of the homophobes' budget.
Why are the Mormons getting involved? Not because they have an interest in what happens in California - there are only 770,000 Mormons in California, a state of 38 million people. That's only 2% of the population. The real reason may be that the Mormons don't feel accepted as a "real" religion by other major faiths:
"For whatever reason, they're trying to get some respect from other religions," he told The Advocate Tuesday. "They've always been looked down upon by the Christians, the Catholics, and evangelicals."So, the argument goes, the Mormons regularly get involved in legislative gay-bashing, in states that aren't Utah, in order to curry favor with the gay-hating religious right.
The thing is, what about the rest of us?
I don't know much about the Mormon faith. I do know that, as a Christian myself, I find some of their beliefs a bit, well, different (such as the belief that Jesus and the devil were brothers). What I do know about Mormons are three things:
1. Donny and Marie.
2. The choir.
3. Their church really seems to hate gays, a lot.
Put aside the fact, for a moment, that a people who were persecuted, and run out of their homes, for being different really ought not be doing the same to another persecuted people. (And really put aside the fact that one of the reasons Mormons were persecuted was because of their beliefs on marriage.) If the Mormon Church is so concerned about being a part of the mainstream religious club, about being loved by other faiths across America, then why are they saddling up to one of the most reviled groups of bigots in America?
Hell of a well to win friends and influence people. Read the rest of this post...
Darcy Burner moves into the lead, gets hit with misleading (wrong) article in local paper
Yesterday, via Matt Stoller at OpenLeft, we learned that the Seattle Times ran an factually-wrong hit piece on Democratic candidate Darcy Burner, who is running in Washington's Eighth Congressional District. Matt single-handedly debunked the premise of the piece, which claimed Darcy didn't have a degree in economics from Harvard -- in fact, she does. (And, after Matt's criticism, the paper has already changed its headline.)A fake last-minute story to bring down the Democratic candidate is no surprise, The Seattle Times is the conservative paper in that city. Coincidentally (or not), a SurveyUSA poll yesterday showed Darcy had moved into the lead in this very hard fought race by 50% - 46% margin. Over the past month, Darcy reversed a 10-point lead by her opponent.
Darcy Burner is a true progressive. She'll be an even better Democrat. And, the Republicans are unloading on this race. If you can help her fight back -- and win -- we've got an ActBlue page for Darcy, please donate. 100% of your donation goes to Darcy and it's 100% secure. Read the rest of this post...
New states polls: "Obama is clearly winning the Big Ten battleground"
A new round of state polls from a faculty at "Big Ten" universities shows significant movement and now solid leads for Obama in key states including Pennsylvania, Ohio and Indiana:
The map now:
The map in September:
Read the rest of this post...
Those states were key battlegrounds in the 2004 election, and last month the Big Ten Battleground Poll showed a tight race in all of those states but Illinois, which Obama represents in the U.S. Senate. The first poll was taken just as the U.S. financial crisis first intensified and before the massive decline in the stock market, when McCain was enjoying his highest poll numbers of the campaign in the Big Ten and nationally.
“In September, we saw virtually the entire Big Ten as a battleground,” said Franklin, co-developer of Pollster.com. “Now Obama is clearly winning the Big Ten battleground. The dominance of the economy as a top issue for voters is the overwhelming story.”
The new Big Ten poll shows Obama ahead in every Big Ten state, including Indiana, where McCain held a slight edge in September, and Ohio and Pennsylvania, where last month’s poll results showed the two candidates in a dead heat.
The map now:
The map in September:
Read the rest of this post...
On FOX, $150,000 for clothes isn't news, but a $400 haircut created a frenzy
This is a great compilation from Jed. There's no hypocrisy at FOX. None.
And here's the first couple paragraphs from the front page article in today's New York Times:
And here's the first couple paragraphs from the front page article in today's New York Times:
Sarah Palin’s wardrobe joined the ranks of symbolic political excess on Wednesday, alongside John McCain’s multiple houses and John Edwards’s $400 haircut, as Republicans expressed fear that weeks of tailoring Ms. Palin as an average “hockey mom” would fray amid revelations that the Republican Party outfitted her with expensive clothing from high-end stores.Read the rest of this post...
Cable television, talk radio and even shows like “Access Hollywood” seemed gripped with sartorial fever after campaign finance reports confirmed that the Republican National Committee spent $75,062 at Neiman Marcus and $49,425 at Saks Fifth Avenue in September for Ms. Palin and her family.
Thursday Morning Open Thread
Good morning.
12 days.
NBC's David Gregory just did a piece on George Bush. McCain keeps telling people he's not George Bush. It has become a standard line in his stump speech. If McCain has to keep invoking Bush to say he's not Bush, then he's just reminding everyone about Bush. Last March, when Bush endorsed McCain, McCain wanted Bush's help:
Also want to give a shout out to the amazing Van Jones. His book, The Green Collar Economy, has hit the New York Times best seller list. Nice job and it is a very timely book.
12 days to change the world. Read the rest of this post...
12 days.
NBC's David Gregory just did a piece on George Bush. McCain keeps telling people he's not George Bush. It has become a standard line in his stump speech. If McCain has to keep invoking Bush to say he's not Bush, then he's just reminding everyone about Bush. Last March, when Bush endorsed McCain, McCain wanted Bush's help:
Q Senator McCain, given President Bush's low approval ratings, will this be a negative or a positive for you? And how much do you hope he'll campaign for you on the trail?And don't forget what McCain said of Bush, "I did everything I could to get him elected and re-elected"
SENATOR McCAIN: I hope that he will campaign for me as much as is keeping with his busy schedule. I'll be pleased to have him with me both from raising money and the much needed finances for the campaign, and addressing the challenging issues that face this country. I'm pleased to have him as is -- as it fits into his busy schedule.
Also want to give a shout out to the amazing Van Jones. His book, The Green Collar Economy, has hit the New York Times best seller list. Nice job and it is a very timely book.
12 days to change the world. Read the rest of this post...
1 in 3 delaying health care needs but Wall Street gets $70 billion in bonuses
Sure, sounds pretty fair. We wouldn't want Wall Street to be held accountable for their global failure because then they might get mad. It's much better for average Americans and the poor to do without medical care and die because they're simply not as productive as Wall Street. The sooner everyone comes to appreciate how irrelevant they are compared to Wall Street and their friends in Congress who ignore the $70 billion bonus pool the better. It's better to have TV drama for the nightly news than actual accountability.
The ailing economy is leading many Americans to skip doctor visits, skimp on their medicine, and put off mammograms, Pap smears and other tests. And physicians worry the result will be sicker patients who need even more costly treatment in the long run.Read the rest of this post...
"I have to pretty much be very ill to go to the doctor," said Julie Shelley, a 49-year-old office manager and mother of three from West Milton, Ohio. "I'm probably at the age where I should have a checkup or physical. I'm not going to do it. I am last on the list."
In Lombard, Ill., Donald Hendricks lost his job over the summer at an event-planning company. When two of his six children came down with a fever and sore throat several weeks ago, he could not afford the gas money to drive them to the doctor. He gave them soup and soda instead, and they got better.
Democrats push banks to keep lending system moving
Clearly it's a delicate balance, as the US is already in deep trouble due to lax lending standards. The problem today is that the banks now have the cash - they have also been receiving cut rate loans from the government for months as well - but they are still reluctant to loan. The longer the banks hold off lending the deeper the real estate problem will become. Senator Schumer is right to push back on the banks, though I really, really, really would like to see him step up on the compensation problem. There is no way $70 billion in bonuses should be handed out on Wall Street in this climate. No way at all.
The U.S. government in recent days has laid out a plan to inject $250 billion of capital into U.S. banks in exchange for preferred shares and some restrictions on executive pay. The program is part of a broader $700 billion market rescue plan Congress passed earlier this month.On a related note, I followed a conversation recently (in the US) where someone insisted that loans were still being made, but people had to arrive with a lot of cash. How was was a lot? Twenty percent. France had loosened up some of it's lending standards but in general the bulk of real estate loans require closer to 30% or 40% cash with 10-12 year terms. Others exist but they were still conservative by US standards and are now gone. The French bank loan system is hardly perfect or better, but what a difference. Even with the differences, loans in France have also locked up though I hear if you come with 99% cash, they will be happy to lend. Read the rest of this post...
Nine of the largest U.S. banks were essentially arm-twisted last week into signing on for the first $125 billion in capital infusions. The Treasury has set a deadline of Nov. 14 for other firms to apply and has said it has enough capital allocated for all qualifying firms to participate.
"This plan will only be effective if these funds are used to increase lending by banks, and it is Treasury's obligation to ensure that," said Schumer, who chairs the Joint Economic Committee. "The last thing these banks should be doing is stuffing this money under the proverbial mattress."
UN warns of mass starvation in North Korea
It will be a good day when the North Korean people can move on beyond this constant cycle of misery for the pleasure of one person.
The U.N. food agency has warned that millions of North Koreans could face starvation, but a South Korean official said Thursday that Seoul has not decided whether to respond to a request for food aid to the communist country.Read the rest of this post...
Around 2.7 million people on North Korea's west coast will run out of food in October, the World Food Program said in a report released on Tuesday.
North Korea has relied on aid to help feed its 23 million people since natural disasters and mismanagement devastated its centrally controlled economy in the mid-1990s. Famine is believed to have killed 2 million people. The country's food shortage has worsened this year following devastating floods in 2007.
The WFP also said the food shortages have especially affected urban households in areas with low industrial activity due to higher food prices, reductions in public food rations and lower employment.
The food shortage warning comes as the North has ratcheted up its hostile rhetoric against South Korea and its president amid fraying ties.
Palin amended govt expense reports after McCain picked her for VP
That's a bit disturbing:
Another thing, apparently 7 year old Piper Palin conducts official state business in Alaska. She must be one heck of a kid.
After Republican presidential nominee Sen. John McCain chose Palin his running mate and reporters asked for the records, Palin ordered changes to previously filed expense reports for her daughters' travel.So much for McCain being Mr. Ethics. But I'm guessing most people realize that McCain gave up any sense of honor months ago.
In the amended reports, Palin added phrases such as "First Family attending" and "First Family invited" to explain the girls' attendance.
Another thing, apparently 7 year old Piper Palin conducts official state business in Alaska. She must be one heck of a kid.
Palin has charged the state $21,012 for her three daughters' 64 one-way and 12 round-trip commercial flights since she took office in December 2006. In some other cases, she has charged the state for hotel rooms for the girls.Read the rest of this post...
Alaska law does not specifically address expenses for a governor's children. The law allows for payment of expenses for anyone conducting official state business.
As governor, Palin justified having the state pay for the travel of her daughters — Bristol, 17; Willow, 14; and Piper, 7 — by noting on travel forms that the girls had been invited to attend or participate in events on the governor's schedule.
So when is Sarah Palin paying $50,000 in taxes on the $150,000 in clothes the RNC gave her?
As you know, the Republicans bought Sarah Palin $150,000 in clothes last month - that's more than the average American household spends on clothes in 80 years. That's also a gift. And it's a taxable gift. It doesn't matter if it's for work. And it doesn't matter if the Republicans now say they're going to donate the clothes to charity after it's over.
Sarah Palin can't accept $150,000 dollars in goods, use them, then later give them away to charity and not pay taxes on the gift she received. By the time she gives them away to charity, they're used clothes - and worth about 1/3 of their original value. So, sure, she can take a tax deduction on the $50,000 in clothes she's giving away (a savings of perhaps $15k or so), but she still has to pay $50k or so in taxes on the $150,000 gift she received in the first place. That means Palin will owe $35,000 net in taxes due to her big shopping spree at Neiman Marcus and Saks. And the Republicans can't help her pay for it, or she'll be paying taxes on their help as well.
Of course, Palin is no stranger to failing to report her taxable income - she did the same thing while serving as governor of Alaska. Read the rest of this post...
Sarah Palin can't accept $150,000 dollars in goods, use them, then later give them away to charity and not pay taxes on the gift she received. By the time she gives them away to charity, they're used clothes - and worth about 1/3 of their original value. So, sure, she can take a tax deduction on the $50,000 in clothes she's giving away (a savings of perhaps $15k or so), but she still has to pay $50k or so in taxes on the $150,000 gift she received in the first place. That means Palin will owe $35,000 net in taxes due to her big shopping spree at Neiman Marcus and Saks. And the Republicans can't help her pay for it, or she'll be paying taxes on their help as well.
Of course, Palin is no stranger to failing to report her taxable income - she did the same thing while serving as governor of Alaska. Read the rest of this post...
Asia could see widespread credit defaults soon
Anyone still want to buy the "de-coupling" economic theory? China is still growing but that number is slowing and the rest of Asia has been closely tied with that incredible growth in recent years. Bubbles do not have soft landings. They tend to crash and burn regardless of what Wall Street or their lapdog media friends say.
A big wave of defaults could be forming among small and medium-sized companies in Asia, raising the spectre of a pile of bad loans at the region's banks and a further plunge in investor trust.Read the rest of this post...
Troubling signs are already popping up. Several Hong Kong companies have shuttered factories in China, including home appliance maker BEP International and toy maker Smart Union Group.
They may not be the only ones. Exporters, property, shipping and retail companies could be hit because they racked up debt and expanded aggressively in the boom times, leaving them ill equipped for the bust being seen across Asia, analysts said.
Slowing economies are crimping cash flow and profits in the region, while access to capital has been severely constrained as the global financial crisis sparks widespread risk aversion, choking off lending for smaller companies which are in most need of funds.
"It's inevitable that default rates will rise in Asia as these companies are now struggling to obtain new debt capital or simply to roll-over their repayment obligations," said Scott Bennett, a Singapore-based fixed income fund manager for Aberdeen Asset Management.
"SMEs have less access to capital, both debt and equity, and they don't have large, untapped credit lines or the sizeable cash reserves that larger and more mature corporates have."
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