Monthly Archives: April 2009

Musings on Credit Default Swaps

As readers may know, I view the credit default swaps market with more than a bit of skepticism. I can point to cases where it has caused harm: 1. Bagholders. Dealers claim that CDS are really not bad at all because they haven’t been taking risk, oh no, they hedge their position with offsetting swaps. […]

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Citi and Bank of America "Encouraged" to Get More Capital as Result of Stress Tests

Ah, in Lake Woebegone, all the women are beautiful and all the children are above average. And in the stress tests, no one fails, they just need to get more equity, preferably not from Uncle Sam, but he is always there to help his best bankster buddies. Recall many observers, including yours truly, deemed the […]

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Links 4/27/09

Sorry this went up so late! And some links got lost too. Grr! Where have all the butterflies gone? Guardian Mexico flu: Your experiences BBC (hat tip reader Dwight), These reports suggest the flu started earlier and has produced more fatalities than the official reports suggest. Fed study puts ideal US interest rate at -5% […]

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Are the Knives Coming Out for Geithner?

The clout of the press has decayed enormously over the last 40 years. The fourth estate was feared, resented, and begrudgingly respected in the corridors of power. But rule by beancounters, savvy media spin, and access journalism (journalists who write pointed stories get frozen out) have largely leashed and collared the press. Indeed, a friend […]

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Guest Post: The horrible self-dealing of Ken Lewis and the principal-agent problem

Submitted by Edward Harrison of the site Credit Writedowns I don’t much like Ken Lewis. It should be fairly obvious to everyone that he is a man who has only his own interests at heart. But, his revelation that BofA bought Merrill Lynch for the agreed-upon September price, despite Merrill’s having an additional $7 billion […]

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Links 4/26/09

‘Space blob’ baffles astronomers BBC Face Mining: Finding Who and When in Video PittPatt. Uses the original Star Trek as test case. Appeals court rules Gitmo detainees are not ‘persons‘ Raw Story Better Than Expected Economic Data? Dean Baker OPEC, Asia Ministers Call for Oil-Market Oversight Bloomberg Goldman’s Hypocrisy Never Ends Independent Accountant Jumping The […]

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On Pelosi’s Duplicity and Apparent Sandbagging of Elizabeth Warren

Despite her longevity as a California pol, house speaker Nancy Pelosi is looking like every bit as much of a dyed-in-the-wool financial services industry backer as the Congressmen on the New York-Boston corridor. As readers will know, this blog does not dwell much on the inside baseball of politics. But once in a while things […]

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Musings on Structural Challenges to the Financial System

One thing that has me troubled about the financial mess is the degree to which the powers that be are wedded to a system that it clearly broken. In part, that results from financial capture of the government apparatus by the banking industry. But an equally sticky problem is the attachment to a rather recent […]

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Guest Post: The Pension Killer?

Submitted by Leo Kolivakis, publisher of Pension Pulse. Writing in the Financial Post, Stephen Donald, a consulting actuary with Buck Consultants, reports on the pension killer: When I started my career in 1973, the economy promptly went into a recession. The S&P 500 fell 48% and took four years to get back to break-even. At […]

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Links Anzac Day

Cure For Honey Bee Colony Collapse? Science News The Unloved Guardian. I find Samantha Morton to be a brilliant actress, and had no idea of her horrific history, which she used as the basis for a film. Information and the illegal market mechanism Trevon D. Logan Manisha Shah, VoxEU. Information asymmetry and male sex workers. […]

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Markets Cheer Stress Test Double Speak

Forgive me for sounding even crankier than usual, but the reason deception sells is that so many people line up for it. The release claiming to describe how the stress tests were conducted in fact provided no new information. Some analysts were more than a tad dismissive: The central bank released a so-called white paper […]

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Guest Post: Handicapping the Stress Test, TCE data @ 3/31

Submitted by Rolfe Winkler, publisher of OptionARMageddon Ahead of official announcements regarding stress test results, OA thought we’d publish our latest update for banks’ tangible common equity, a metric that is likely to figure prominently in the results. A recent Reuters report said “U.S. regulators want the top 19 banks being stress-tested to have at […]

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Links 4/24/09

“Catastrophic to Awful!” – The Banking Spin Cycle Satyajit Das, Eurointelligence Pound Weakens on Speculation U.K. May Lose AAA Credit Rating Bloomberg (hat tip reader Dwight) European Manufacturing Crash – February EconomPic Data Summers Caught a-Snoozin’ The Caucus, New York Times (hat tip reader Steve A). The topic was credit cards. However, it appears the […]

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