The Dog Ate My Homework

Today's post will be brief, as an unreliable internet connection last evening thwarted nearly every attempt to peruse the latest news and perform the sparse, nearly non-existent amount of research required before offering opinions here.

The trade deficit posted today - Calculated Risk has a write-up already with updated charts (look at those red bars hanging down):

The Commerce Department reported Thursday that the deficit jumped to $66.1 billion in September, 11.2 percent higher than the $59.3 billion imbalance recorded in August. It was a far bigger increase than analysts had been expecting and reflected in part a record $23.8 billion in oil purchases as the price skyrocketed, reflecting widespread shutdowns of production facilities following hurricanes Katrina and Rita.

So far this year, the deficit is running at an annual rate of $706.4 billion. This puts the country on track to far surpass the old deficit record of $617.6 billion set last year and gives critics ammunition to argue that President Bush's trade policies are not working.

GM is in the news again - what's going to happen if Ditech.com starts having problems?

General Motors Corp. shares, already at 13-year lows, fell another 3 percent Thursday in premarket trading after the world's largest automaker said it would restate its earnings for 2001 because an accounting error led it to overstate its 2001 profit by up to $400 million.

The announcement in a filing late Wednesday with the Securities and Exchange Commission comes as the company faces a continuing regulatory investigation of its accounting practices. It has reported huge losses for the first nine months of the year, its auto sales are being pressured by competition from foreign manufacturers and it faces rising health benefit and pension obligations.

Also on Wednesday, the credit ratings agency Fitch Ratings lowered GM's debt deeper into "junk" status.

More restatements from Fannie Mae? Is this ever going to stop? Are they ever going to file a financial statement? This is starting to sound like software bugs, where the incoming rate of bugs is higher than the rate at which they can be fixed, so, at some point management just says, "Cancel the project" - Microsoft has done this a time or two.

Mortgage finance giant Fannie Mae, under investigation for massive accounting problems, on Thursday said it named as chief financial officer the executive who helped rebuild MCI Inc.'s accounting department after the WorldCom bankruptcy.

Fannie said Robert Blakely would join the company as CFO after Verizon Inc.'s (NYSE:VZ - News) purchase of MCI closes in late 2005 or early 2006.

He will take overall responsibility for the profit restatement, which may total as much as $11 billion based on accounting errors identified so far.
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The company said it does not expect to file restated results for 2004 before the second half of 2006.

And the Avian flu story continues - if you are looking for timely information about the Avian Flu, go to this blog (started by Tyler Cowen of Marginal Revolution fame). The part about the fake bird flu vaccine sounds pretty ominous.

Authorities in China said Thursday they have quarantined 116 people in northeastern Liaoning province after two new outbreaks of bird flu there. The province has now suffered three outbreaks in less than three weeks despite a massive campaign to contain the virus.

And, finally, on the Asia/Flu theme is Andy Xie's commentary yesterday on the impact that this may have on the Asian economy:

Fear of a bird flu pandemic is building around the world, especially in Asia – a region traumatized by the SARS outbreak in 2003. The fear factor has become a significant economic force in its own right. It may have already increased the risk premium on financial assets in Asia. If human-to-human transmission is confirmed, the fear factor is likely to exaggerate the economic impact significantly, making an Asian recession almost inevitable and a global recession quite likely.