By happenstance, three articles in the Financial Times provide useful, if disheartening, triangulation on the credit crisis. In sum, the markets are a mess, policymakers don’t agree on what to do, and there may be nothing they can do except make matters worse. Last week was by any standards a bad week, with the Fed’s […]
Read more...All About Alpha, which is a fine site for all things hedge fund related, has an excellent piece today by Dr. William Shadwick of Omega Analysis. Shadwick has the unusual distinction of being a serious mathematician (he established Fields Institute for Research in Mathematical Sciences) who writes well. He also entered the finance industry relatively […]
Read more...Lessons of 1000 years of trade and war VoxEU The Face Slap Theory Paul Krugman, New York Times. Signs Of The Time Part 5 Boom2Bust. Lawyer sues casino for failing to recognize compulsion and stop her. Auction-rate warnings fell on deaf ears MarketWatch Is McCain Telling Me That There’s Lots of Bombing in Manhattan? PGL, […]
Read more...An article in Business Week, and a related discussion on the blog Credit Slips, highlight a new and nasty trend: banks are refusing to give overstretched borrowers who negotiate repayment plans through credit counselors the interest rate breaks they once did. In the old days, banks would reduce interest rates on balances due, sometimes to […]
Read more...The Financial Times reports today that New York governor Eliot Spitzer, hardly a well-liked figure on Wall Street, did serious arm-twisting to get banks to support Ambac’s fundraising: Eliot Spitzer, governor of New York, played a critical behind-the-scenes role in the rescue of Ambac, frequently calling senior bankers to press for a deal to be […]
Read more...Paul Krugman usually has enough important topics to occupy himself, like the sorry state of health care, income inequality, tax policy, Bush Administration offenses du jour, that he rarely gets around to matters financial. But stress in the markets has again come to the fore, so Krugman is taking a serious look. Not surprisingly, he […]
Read more...Even as recently as, say, last December, worrying about the the safety of Fannie Mae and Freddie Mac’s guarantees was seen as a sign of a being overly preoccupied with remote risks (in fairness, Nouriel Roubini did consider this possibility in the summer of 2006 and Michael Panzner did in his book Financial Armageddon, but […]
Read more...I nearly fell off my chair. Ben Stein’s column this week, “What McCain Could Do About Taxes,” is sensible and vastly more tightly written and argued than his previous work. No free association or gratuitous name-dropping, no leaps of logic, no wishful thinking. More shocking, not only does he take issue with the Republican party […]
Read more...Nonsensical arguments against capital controls Dani Rodrik Bullying more harmful than sexual harassment on the job, say researchers PhysOrg MPs back artificial sperm for childless Guardian Just an FYI…8 Mega Themes for the Future Roger Ehrenberg Three Pictures from the Labor Market Menzie Chinn, Econbrowser Whatever happened to inflation targeting? Greg Mankiw Antidote du jour:
Read more...One of the upsides of blogging is sometimes other inquiring minds get to the bottom of matters that have been nagging at you. We had warned a couple of months ago that a colleague with serious connections into the Treasury and Fed told us they were working on plans for a quasi-nationalization of the banking […]
Read more...Jim Hamilton must feel like a Cassandra. At the Fed’s Jackson Hole conference last August, Hamilton gave a presentation that warned that the pricing of Fannie’s and Freddie’s debt was unwarranted given their highly leveraged balance sheets unless you believed that they really were full faith and credit obligations. He warned that assumption would be […]
Read more...An article in today’s Financial Times is useful, albeit sobering, for attempting to give more of a calibration of the negative sentiment sweeping credit markets. Pretty it isn’t. Note also that the FT isn’t big on stories with emotional content. From the Financial Times: A palpable sense of crisis pervades global trading floors. Not since […]
Read more...Further confirmation of the lack of integrity in the markets comes via the desperate and pathetic measures of the monoline insurers. First, a Bloomberg story tells us that MBIA has asked Fitch to quit rating some of its insurance units because it thinks its grading scale is too harsh. Gee, the whole point of a […]
Read more...Jail for Australian kiss killers BBC After the Ratings Agencies John Quiggin What is to be done? Paul Krugman Fedspeak Highlights: Mishkin on Dollar Depreciation Economics Blog, Wall Street Journal. “Frederic Mishkin says dollar depreciation has had “modest” impact on inflation.” Mishkin is not one of my favorites. Judge: Flat-Fee Arrangements in Foreclosures, Bankruptcies “Corrosive” […]
Read more...Courtesy the Cleveland Fed. Note that this is as of time, the Fed fund futures market says there is zero probability of a 25 basis point reduction. A 50 basis point cut has 50% odds. Note this chart is dated March 6. and therefore does not reflect the impact of the announcement of the increase […]
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