Watching Ben Bernanke talk about stimulus packages rather than a new bailout today was sort of a pleasant relief. We may be in a severe slowdown in the economy and massive government spending programs, but at least nothing new is collapsing at the moment (although the day is only half over). Markets are up a bit, and there are encouraging signs that credit markets are finally improving.
If those trends continue, we'll be fortunate enough to spend the next few weeks watching for signs of where damage from tight credit, falling share prices, and a slower global economy is appearing. Not the best of all possible worlds, I know, but a nice breather from white-knuckled fear.
DealBook has the decline and fall of a buyout attempt of Landry's Restaurants by its CEO, Tilman Fertitta. The deal bounced around for months while Landry's shares suffered. The deal closed at a price 36 percent lower than when the deal was announced in June. General Motors is exploring a buyout of Chrysler, but getting financing together may prove difficult.
From China, the government there has gone from doing everything possible to slow economic growth 18 months ago to worrying whether its economy will slow too much. A severe slowdown in China is becoming a larger worry for the global economy and would be just the sort of thing that makes a worldwide recovery more difficult. Plus, some of those pools of Chinese cash are making bad bets of their own. China's Citic Pacific, one of those foreign entities lots of folks were watching as a candidate to swoop in and invest in troubled U.S. banks, must have been listening to all the bad news in America. It lost $1.89 billion betting against the dollar. The Netherlands:
ING Groep NV, the Dutch financial services giant, got $13.4 billion from the government and sold its Taiwan unit. This kind of news isn't the sort of precrisis report we've been getting for the past month. Instead, it's a sign of things to come. ING is a big, well-capitalized bank and has been forced to take government cash at a costly rate—just the sort of thing that makes a bank less attractive to shareholders (for example, extra payments to the government if it decides to pay a dividend, according to breakingviews.com).