Quick updates

Chrysler. Yesterday, Chrysler entered bankruptcy. It will idle most of its US plants during the court proceedings. The government hopes the bankruptcy can be finalised in a “quick visit” of just 30-60 days. But even if this can be achieved, there is little doubt that Chrysler’s suppliers will suffer major write-offs.
Bank ‘stress tests’. Widespread criticism of these as being “meaningless” has led to a tightening. Apparently at least 6 of the 19 banks, including Citi and Bank of America, will now need new capital.
Deflation. The Bank of Japan is now forecasting that prices will fall for the next 2 years, even though it still expects the economy to begin a recovery next year.

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