As we have mentioned before, one of the dirty secrets of the bond insurance business was that the original product, municipal bond insurance, was as close as you could get to free money. States and municipalities never defaulted on principal, so the most an insurer would pay would be a few interest payments. That turned […]
Read more...Readers may recall that a row between the US and Antigua over online gambling threatening to pull the WTO house down. By way of background, the US had lost a WTO case on online betting , and the Bush Administration acted under a WTO stipulation that allows it to set its own trade rules. But […]
Read more...A solid, well argued case against further central bank accommodation by Charles Wyplosz, professor of economics at the Graduate Institute of International Studies in Geneva, in the Financial Times. The centerpiece of his argument is that by providing ample liquidity and low interest rates, monetary authorities are delaying the very steps necessary for banks to […]
Read more...Spy planes to recharge by clinging to power lines New ScientistTech SunTrust Bails Out 2 Funds New York Times. The bank has reserved $400 million to rescue two money market funds. Isn’t the WTO just so amazing? Dani Rodrik Deal volumes suffer sharp fall Financial Times. Duh. US Navy To Halt Hunting of Japanese Whaling […]
Read more...UBS is getting heat on multiple front on the planned investment of $11.5 billion, the bulk of which comes from the Singapore Investment Corporation, and the remainder from a secretive Middle Eastern investor. Initially, this development seemed like a coup, for the Swiss bank announced further writeoffs seen as deep enough to take it through […]
Read more...The Wall Street Journal has broken this story: “Merrill May Get Capital Infusion.” Hhhm. $5 billion seems to be the magic number, since it happens to be the size of the planned investment in Morgan Stanley by a Chinese investment fund. It may be another coincidence, but is also seems brokerage firms are keen to […]
Read more...The Wall Street Journal has a page one story, “Fraud Seen as a Driver In Wave of Foreclosures,” which probes the role of mortgage scams. I’m sure Tanta will wax eloquent on this article, but let me hazard a couple of observations. First, the article seeks to describe the fraud problem, citing the widely-touted Mortgage […]
Read more...I’m a bit late to the somewhat sensationalistic piece, “Fatwa Against the Dollar” by Ambrose Evans-Pritchard at the Telegraph. The reason I say “somewhat” is that the underlying issue that Evans-Pritchard points to, namely, dollar-peg-induced inflation in our trading partners, is real and becoming more acute. And Evans-Pritchard emphasizes an aspect that gets insufficient play […]
Read more...MarketWatch, Bloomberg, and Reuters, among others, reported on the disclosure by the largest bond guarantor, MBIA, of its exposure to $30.6 billion in “complex mortgage securities.” What was particularly worrisome was that in the total is $8.1 billion of collateralized debt obligations of the particularly risky “CDO squareds” variety, or CDOs of CDOs. Bear in […]
Read more...The State of the US Economy Lawrence Summers, The Brookings Institution. Summers draws a distinction between recessions caused by central banks putting on the brakes to slow inflation, versus ones created by stress in the credit markets due to overextension during asset bubbles. The latter take longer to resolve and are more difficult to treat. […]
Read more...On top of Bear’s subprime losses, hedge fund woes, and pending lawsuits and investigations, what else could go wrong? Answer: one of its big earnings engines seizes up. The Financial Times reports that Bear Stearns will announce that it has lost market share in prime brokerage. Prime brokerage is something of a misnomer; hedge funds […]
Read more...Remember, you skeptics live outside Silicon Valley, even an old warhorse like Oracle is humming along,posting a 35% increase in net income. From the Richter Scales:
Read more...I usually rely on public information, but I’ve had two not-so-public (well, one is public but second-hand) data points converge, and they are consistent with the MSM information on the matter at hand, namely, how Morgan Stanley came to post a $9.4 billion loss on the actions of one trading desk, which in turn led […]
Read more...Actually, this blog was a year old yesterday too, but we didn’t get around to telling you then. I know many of you are getting Christmas cards with inserts extolling company, or worse, family accomplishments. So I’ll keep it brief. It’s hard to know for sure how one’s blog is doing, since different services come […]
Read more...There was some hope that bond insurers might be able to shore up their balance sheets via reinsurance and/or capital infusions, to avert a downgrade. The pending $1 billion investment by Warburg Pincus in MBIA, the largest monoline insurer, seemed a promising sign for the sector. The rating agencies are keeping the heat on. Standard […]
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