07
Jan
German Billionaire Kills Self Because of Crisis
FEDERAL RESERVE: US OUTLOOK FOR RECOVERY NOT GOOD
AFP: Fed starts program of purchases of mortgage securities
… troubled mortgage securities through investment managers, kicking off a program expected to spend up to 500 billion dollars to ease a credit crisis. …
DROPPING LIKE FLIES
FT: Billionaire Merckle commits suicide
By James Wilson in Frankfurt
Adolf Merckle, one of Germany’s wealthiest men, has been found dead after weeks
of talks with creditors about a financial crisis in his business empire.
Mr Merckle’s death – said by a spokesperson to be a suicide and partly blamed on
the financial crisis – calls into question the fate of the many companies he controls, including Ratiopharm, the generics drugs maker, and Heidelberger Cement.
The 74-year-old died on Monday evening, apparently hit by a train near his home
in southern Germany.
”The desperate situation of his companies caused by the financial crisis, the
uncertainties of the last few weeks and his powerlessness to act, have broken
the passionate family entrepreneur and he took his own life,” a statement from
his family said.
Mo Sacerby: “Pulling Out All the Stops” to Stave Off Deflation & Save the Economy:
Janet Yellen, the respected San Francisco Fed Governor, uttered these words. This is not the type of open language one usually hears from a US Fed Governor, and when uttered it should be heard as alarm bells heralding an unprecedented threat. The Fed though has already shot most or all of its “silver bullets” to stop deflation. So what more can be done? A “moderate” stimulus might not be adequate to beat deflation but just enough to push the US economy into “stagflation. Read More:
ROUBINI”S RGE MONITOR: THE NEXT BUBBLE?
* In 2008, the Treasury market had its best annual rally in more than 25 years on fears of global credit crisis, recession, deflation. 10yr and 30yr Treasury yields fell to all-time lows and T-bill yields even dipped into negative territory for the first time since the Great Depression. The total return of the 30-year bond was c. 45%, its best year since 1982. Treasuries in general returned 14%, outperforming S&P 500 by 53 percentage points
* In 2009, any signs of a less than dire economic outcome may burst the bubble in Treasuries. With the U.S. government expected to issue between $1.5 trillion to $2 trillion of debt into the $5 trillion Treasury market to finance its rescues of the financial system, the risk of a sudden drop in prices is growing. 10yr and 30yr Treasuries are still yielding between 2-3%, 2yr notes less than 1%, T-bills near zero. The TIPS market is anticipating less than 0.5% annual inflation for the next 10 years (ML)
