Economists’ Tea Leaves Point to Recession David Leonhart, New York Times. Given the accuracy of economic forecasting, this may actually be a bullish signal. Credit Crunch and Asset Deflation Recession Max Fraad Wolff, Huffington Post Citigroup Will Support Six SIVs on Its Books Wall Street Journal. This development is no surprise; the bank will provide […]
Read more...Adam Levitin at Credit Slips has been looking at bankruptcy fillings lately, and they confirm his worst suspicions about the credit card industry: I’ve seen a bunch of cases with upwards of $60,000 of debt for a single debtor, a few with over $100,000, and the current record holder is $175,862.27. Yes, that’s right, $175,862.27. […]
Read more...John Kay in the Financial Times offers a theory as to how seemingly intelligent people could design and peddle products that would come back to haunt them via massive writedowns and badly dented reputations: it’s the conformity, stupid. A lot of readers would probably differ; incentives like performance pressure and annual bonus schemes would seem […]
Read more...We are late to the big news du jour, namely Warren Buffett’s proposal to rescue the muni bond business of MBIA and Ambac. The market staged a peppy rally on the announcement, no doubt due to a resumption of bullish optimism and a lack of understanding of the implications of the deal (the brush-off of […]
Read more...The Financial Times has an interesting piece today by Chris Giles and Gillian Tett, “Lessons of the credit crunch.” The world’s top central bankers have learned that their traditional policy tools haven’t worked as well as they would have liked. So how to judge the job they have done? The FT story fails to address […]
Read more...One robin does not make a spring, but this front page Wall Street Journal article, “High-Interest Lenders Tap Elderly, Disabled,” is a real surprise. It’s not at all the sort of story one expects to see in the Journal, and comes one day after a very favorable piece on Michelle Obama. Is Murdoch having a […]
Read more...These days, showing a profit in the securities industry puts one in exclusive company. The Zurich-bank’s writedowns of $1.2 billion, which would be a shocker in any other era, are a cause for cheer now. However, the earnings came in somewhat short of estimates. From Bloomberg: Credit Suisse Group, Switzerland’s second-biggest bank, said fourth-quarter profit […]
Read more...Rare white stag sighted BBC Don’t Offend the Chinese, America’s Real Owners International Political Economy Zone Signs of the Time, Part 3 Boom2Bust. Trust me, go read it. China: Preferred location for Research and Development Stormy, Angry Bear Bond Insurance Turns Toxic for Munis as Rates Soar Bloomberg
Read more...We didn’t think much of the New Hope Alliance, the program brokered by the Treasury Department to rescue subprime borrowers facing resets. The program’s criteria targeted those who were already paying fairly high initial interest rates with very little to no equity in their house at the time of closing. In other words, this group […]
Read more...In his latest post, “Forbes Reporting on the Financial Meltdown Scenario,” Nouriel Roubini clarifies his views towards the economy. He recently posted a 12 step meltdown scenario which appears to have focused a few minds. As Roubini elaborates, he thinks a financial train wreck is reasonably likely, but the outcome will be a short, nasty […]
Read more...Sorry for the fact that the blog has been down a couple of times today. For the technically minded, the DNS server has been up and down today. It will go down again briefly to be reset and hopefully will be fine. Since Blackberry had serious outages today, at least I’m in good company.
Read more...We had commented before on the fact that Spanish banks have been going to the ECB for funding because their domestic mortgage securitization market is virtually shut. In December, Spanish banks borrowed €44 billion, more than double the average of the previous 15 months. The Financial Times story notes two troubling elements: first, that the […]
Read more...Some have taken notice that investment banks are much more cavalier with other people’s money that they are with their own dough. We’ve gone further in earlier posts, saying that investment banks shouldn’t be public companies (scroll towards the end). A Bloomberg article points out the obvious: the Street has sustained losses unimaginable in the […]
Read more...Readers may have noticed that this site has gotten what one can most politely call visually busy. I’m not happy with the awkward adolescent ad-cluttered look. That in turn leads to a broader discussion of aesthetics, not just in terms of appearance but also positioning. The visual issue is pretty obvious: I’d like this to […]
Read more...A front-page Wall Street Journal story picks up on an alarm sounded over the weekend by the Financial Times, namely, that the leveraged loan market (the paper used to fund LBO deals) is in serious trouble. Investment banks are sitting on sizable unsold inventories that are declining in value, thus sure to lead to further […]
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