Author Archives: Rolfe Winkler

Guest Post: What De-leveraging?

Submitted by Rolfe Winkler, publisher of OptionARMageddon So much for de-leveraging…The Fed published its latest Flow of Funds report today. One key takeaway: While total debt is growing more slowly, it is still growing. Since Q3 ’08 households have cut their debt (slightly), but the federal government is borrowing so rapidly, overall debt continues to […]

Guest Post: Keynesians, Please Exit Stage Left

Submitted by Rolfe Winkler, publisher of OptionARMageddonBack in February, amidst the neo-Keynesian rage to spend our way out of recession, I argued that stimulus wouldn’t stimulate. Pointing to the graph of the 10-year Treasury vs. 30-year mortgage rates I said that the government wouldn’t be able to flood the market with Treasurys without driving up […]

Guest Post: FDIC Won’t Rule Out Banks as Buyers of Toxic Assets

Submitted by Rolfe Winkler, publisher OptionARMageddon During a press conference today, FDIC Chairwoman Sheila Bair was asked about the Journal’s report that banks are lobbying to buy assets under Geithner’s toxic asset plan, the PPIP. She says banks will not be able to bid on their own assets, but clearly leaves open the possibility that […]

Guest Post: BankUnited’s Sordid History

Submitted by Rolfe Winkler of OptionARMageddon Reader Note: Last fall, I published a detailed (recent) history of BankUnited in the pages of Housing Wire Magazine. With the bank’s future likely to be settled over the next week, I thought NC readers might appreciate a look at the piece. Thanks to HW’s Paul Jackson for allowing […]

Guest Post: Geither admits easy money did us in

Submitted by Rolfe Winkler, publisher of OptionARMageddon In an interview with Charlie Rose on Tuesday, Tim Geithner admitted the bubble was caused by Greenspan’s easy money policy. Unfortunately, Charlie didn’t ask the obvious follow-up: “why will this time be different? Why will Bernanke’s easy money policy lead to different results?” Here was the crucial exchange: […]

Guest Post: Dealing with the Devil?

Submitted by Rolfe Winkler, publisher of OptionARMageddon Much has been said here and elsewhere about the stress test’s lack of credibility, especially after word emerged about “intense bargaining”over the results. Not to belabor the point, but some data may be of use. Of the more promising developments early in the process, the Fed articulated the […]

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 […]

Guest Post: Backdoor Way Investors Can Clear Housing Inventory

Submitted by Rolfe Winkler, publisher of OptionARMageddon A hedge-funder well-known to OA—who wishes to remain anonymous—chimes in with a rather fascinating idea in our humble opinion, one that (at least in the state of Maryland) could take the foreclosure process for many houses/condos out of the hands of banks.* We thought worthy of sharing because […]

Guest Post: 3/5ths of Oversight Panel Favor Japanese Solution

Submitted by Rolfe Winkler, publisher of OptionARMageddon The Congressional Oversight Panel released its latest report yesterday. Luckily news outlets reporting on the release (see Bloomberg and Housing Wire) are skipping Warren’s YouTube and Executive summaries–awkward exercises in establishing consensus both of them. They focus instead on the report’s more provocative suggestion, that liquidating failed banks […]

Guest Post: FDIC’s Insurance Commitments 34% Higher Than Reported

Submitted by Rolfe Winkler, publisher of OptionARMageddon. [Reader note: I thought it useful to add commentary around the FDIC data. Those that would prefer to skip straight to it, see the chart and read paragraphs 4-9]. Conventional wisdom says that financial companies are having trouble borrowing because credit markets are broken. This is dangerously wrong. […]

Guest Post: Big Banks Pull off the Ultimate Bait & Switch

Submitted by Rolfe Winkler, CFA, publisher of OptionARMageddon We’re not quite as healthy as we thought we were. Oops. (WSJ) J.P. Morgan Chase Chief Executive James Dimon said…that March was a little tougher than the first two months of the year….Bank of America…CEO Kenneth Lewis also said that March had been a tougher month for […]

Guest Post: Is Obama Running Interference to Protect Bankers’ Pay?

Submitted by Rolfe Winkler, CFA, publisher of OptionARMageddon.com According to the NYT, the administration is considering all kinds of new rules in the wake of the AIG bonus scandal. These include tougher rules for mortgage lenders, new oversight powers for the Fed, and a new exchange/clearinghouse for derivatives trading. Most interesting in terms of intra-governmental […]

Guest Post: Charlotte Observer pitches softball, Ken Lewis hits homer

Submitted by Rolfe Winkler, CFA, publisher of OptionARMageddon.comThe Charlotte Observer deserves a big fat Bronx Cheer for prostituting its pages. Today the paper published excerpts of an “interview” with hometown CEO Ken Lewis of BofA. The quotes read like the standard puffery one finds in corporate press releases. If the interviewers asked any tough questions, […]

Guest Post: More Debt Won’t Rescue the Great American Ponzi

Submitted by Rolfe Winkler, CFA, publisher of OptionARMageddon.com Policy-makers not only misunderstand the economic crisis, they continue to underestimate it. Consequently, solutions to date have not only failed to “fix” anything, they have made the problem worse. The problem isn’t falling asset prices, it’s not rising foreclosures, it’s too much debt. With an assist from […]