Boy, that was one of the fastest capitulations on record. Less than thirty-six hours after Barney Frank threatened to intervene and end the disparity between corporate and municipal bond ratings, Moody’s fell into line. That pretty much guarantees the other rating agencies will follow suit. As we noted earlier, the ratings disparity gave the monline […]
Read more...This is such a good story that I decided it deserved its own slot, rather than being featured in links. Dolphins haven’t been studied as intensively as monkeys, but there is ample anecdotal evidence, and some research, suggesting that they approach humans in intelligence (one philosopher, having surveyed the literature, argued that they are “non-human […]
Read more...No, Barney Frank, head of the House Financial Services Committee, did not say in so many words that he wanted to end the municipal bond insurance business. But that’s the implication of the ultimatum. He told the rating agencies and the insurers that they have a month to make the standards applied to the ratings […]
Read more...James Hamilton, in “Asking too much of monetary policy,” is trying to talk sense to a Fed that just doesn’t get it. Hamilton ought to have some cred; he proved to be remarkably prescient when he warned in his presentation at the Fed’s Jackson Hole conference of the danger of the markets playing chicken with […]
Read more...The normally sober and measured Martin Wolf of the Financial Times is getting worn down by reading too many bearish forecasts, particularly those of Nouriel Roubini. And although Wolf would like to dismiss Roubini’s estimates as extreme, his track record in calling this downturn makes him loath to do so. From the Financial Times: What […]
Read more...Pollution ‘alters brain function’ BBC The 100 most beautiful cars of all time Telegraph Stock Volatility Datapoint of the Day, Part 2 Felix Salmon Media Overlook Fed Bailout in Plain View Dean Baker. Baker gets very heated about the Fed’s Treasury for MBS swap facility. Market Recap: Did Fed Induce A Short Squeeze? Minyanville Foreclosure-related […]
Read more...The Wall Street Journal on Monday said US regulators have been urging banks to raise more capital. John Dizard argues in the Financial Times that banks need to do so posthaste: We don’t, however, have a lot of time to avoid the self-reinforcing contraction of the financial system that is the precursor of a depression. […]
Read more...Irrespective of one’s political persuasion (well, almost), this is amusing:
Read more...The Fed’s move today to lend up to $200 billion against mortgage backed securities comes as close as one can without an act of Congress to affirming the implicit Federal guarantee of Freddie Mac and Fannie Mae debt. Its new facility, the Term Securities Lending Facility, will lend to primary dealers through 28 day auctions, […]
Read more...A kind reader Tim e-mailed me this Bloomberg story, which apparently is only up on the professional version (yes, I am a member of the great unwashed who lacks a Bloomberg feed. Now you know what to get me for Christmas). I’ll add a proper link once it migrates over. The rating agencies have taken […]
Read more...Oooh, the week has barely started and we’ve already had an overdose of adrenaline-generating news. Thornburg Mortgage and Carlyle Capital, both twisting in the wind, battered by margin calls, look unlikely to escape bankruptcy (Thornburg has already defaulted on financing agreements; Carlyle is seeking a standstill). Freddie and Fannie took a further beating thanks to […]
Read more...An article in the Financial Times, “Credit crisis lurches from bad numbers to bad writing,” by Arturo Cifuentes, contains a stunning revelation: the deal documents governing CDOs are in many cases so badly written that, for instance, it isn’t clear how to handle a default. To give readers a sense of proportion, the contracts governing […]
Read more...The ratchet down of the credit market Monday due to worries about Bear Stearns’ solvency and Fannie Mae have produced widespread collateral damage (no pun intended). Bloomberg reports that credit default swap prices, which rose sharply for US and European issuers, reflecting heightened worries about credit risks, have also increased for a large range of […]
Read more...Cats Help Shield Owners From Heart Attack US News & World Report Investor group attacks banks over subprime Financial Times Fitch, MBIA fight it out over request to stop ratings MarketWatch. Go Fitch! The Picture Of Emperor Eliot DealBreaker. A nicely done essay on the sudden fall of New York’s Governor. I’m amazed that there […]
Read more...Not only does leverage cut both ways, amplifying returns and losses, but bankers have a nasty habit of imposing tougher borrowing terms at the worst possible time. The hedge fund industry is learning this lesson the hard way, as cash strapped and newly risk averse prime brokers are raising margin requirements across the board, even […]
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