We have been less than enthusiastic about the choice of Timothy Geithner to be the next Treasury Secretary. Granted, the idea that we will have someone who is intelligent, knows a thing or two about the markets, and is not from Goldman Sachs makes him a big improvement over the Bush incumbents. However, competence should […]
Read more...Remember how, post 9/11, President Bush urged patriotic Americans to go to the mall? It appears the officialdom is fond of time-tested remedies. Bloomberg tells us that the Fed and Treasury have a plan,, using TARP funds, to get consumers to spend again by supporting consumer lending. There are a few problems with this approach: […]
Read more...Even with strong signs that global economic weakness will persist through 2009, investors in energy share hope for an oil price rebound sooner rather than later, and energy stocks staged an even bigger move than the overall market in the last two rallies But the fixation on oil tends to obscure the prospects for the […]
Read more...One topic we’ve mentioned from time to time is the near disappearance of the debtor in possession financing market and why that is a more serious matter than its dry name might suggest. When large companies seek to use Chapter 11, typically they are broke (duh) as in out of cash. Chapter 11 takes time, […]
Read more...As correspondents and readers have pointed out, Fed chairman Ben Bernanke and the rest of DC is increasingly resorting to the playbook he suggested in various papers on Japan’s deflation. The Federal government has said that it is willing to lend or backstop up to $7.4 trillion to get the credit markets moving again. This […]
Read more...The eco machine that can magic water out of thin air Guardian Americans’ ’Hypocrisy’ in Auto Rescue Spurs Me-Too Trading Ire Bloomberg. An auto industry rescue may run afoul of WTO rules. Charming. A reassuring figure for Treasury Economist. On why Geithner is a good pick for Treasury. The problem is that the Bush Administration […]
Read more...A nice article in the Financial Times by Wolfgang Munchau, “Double jeopardy for financial policymakers,” discusses the Federal Reserve’s move to quantitative easing. There has been some mention of this in the media, as a Bloomberg story from last week indicates, but it hasn’t gotten the attention it deserves. The use of quantitative easing is […]
Read more...Ah, the US keeps inching its way into the behaviors of post-bubble Japan. The latest pending regulatory move it to reduce failures to deliver securities in the Treasury repo market, a vital source of short-term financing for banks and broker dealers. But the remedy under consideration would lead to negative rates on some repos. a […]
Read more...Oddly, I saw this comparatively late (about an hour), and no notice Bloomberg, which is perfectly willing to pick up news reports by competitors with attribution, and Asian markets ex Japan (closed today) were still in negative territory, although slightly less so. Note key element of the deal is that the Federal government will guarantee […]
Read more...Why are we in the mess we are in? There are lots of proximate causes: overleverage, global imbalances, bad financial technology that lead to widespread underestimation of risk. Readers can no doubt improve on that list. But these still are all symptoms. Until we isolate and tackle fundamental causes, we will fail to extirpate the […]
Read more...Well, this is starting to get the feel of a bad soap opera, which is not helpful to Citi (never a good sign when I leave my computer on a Sunday afternoon and find multiple news updates when I return. This may not be full crisis mode, but it is certainly not a good sign). […]
Read more...Meredith Whitney, the most accurate of the banking analysts (and even she has said she was too conservative on how bad the losses would be) has deemed Citi to be beyond redemption. From an interview in the New York Post (hat tip reader Dwight): “Pandit and his executives are completely naive if they think the […]
Read more...Live worm removed from woman’s brain BBC. Eeew! And this took place in the US. Where a baby girl is a mother’s awful shame Guardian That Money Isn’t Leaving the Vault Gretchen Morgenson, New York Times (hat tip reader Dwight) In Housing Slump, Elderly Forgo Assisted Living New York Times AIG to sell plane lessor […]
Read more...In case you are starting to look to past crises for clues as to how our financial mess might play out, here is a Great Depression factoid. From Levy Forecast, November 2008 (hat tip reader Scott, no online source): Note that the report itself argues that the US will have a “contained” depression, with deep […]
Read more...The New York Times has a solid bit of reporting tonight by Eric Dash and Julie Creshwell, “Citigroup Pays for a Rush to Risk,” that seeks to explain why the giant bank got itself in so much trouble. The piece points to the usual culprit, too much risk taking, but the particular Citi flavor was […]
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