An excellent post by Elizabeth Warren at Credit Slips reviews some of the canards that have been successfully presented to promote the interests of various business interests against hapless consumers. The latest involves payday lending. The very fact that the Pentagon has come out against payday lending (they’ve proposed a usury ceiling of 36%) should […]
Read more...Questions We Hear Everyday. TSA. No kidding, the TSA has a blog and is trying to look user-friendly (well, everywhere but in airports). deLong on Marx. Econospeak. For those who enjoy intellectual slugfests. BLS Overstated Job Creation by 14.38% in 2007 The Big Picture Storms suspend China’s fight against inflation MarketWatch
Read more...The Wall Street Journal reports that U.S. attorney in New York’s Eastern District in Brooklyn has launched a preliminary investigation: Federal criminal prosecutors in New York are investigating whether UBS AG misled investors by booking inflated prices of mortgage bonds it held despite knowledge that the valuations had dropped, according to people familiar with the […]
Read more...An alert reader tipped us off to the latest development on the bond insurer front. As Reuters tells us, while XL’s insurance subsidiaries are not bond insurers, the are exposed to bond insurer Security Capital via a reinsurance/investment relationship. XL’s senior debt was downgraded one level to Baa1. From Reuters: Moody’s Investors Service on Friday […]
Read more...Although we have been skeptical of the bond insurer rescue efforts led by New York state insurance superintendent Eric Dinallo, a report today by Bloomberg claimed progress was being made with the monoline insurer deemed most in need of assistance, Ambac. From Bloomberg: New York Insurance Superintendent Eric Dinallo is trying to organize a bank-led […]
Read more...As reported in the Wall Street Journal, and cited on this blog, Merrill reimbursed Springfield, MA for losses on CDOs that were unsuitable investments (the city had made clear it only wanted low-risk products). As Bloomberg tells us, that was not sufficient to halt a suit by the Massachusetts sttorney general’s office which had been […]
Read more...I should never underestimate the relentless optimism of US equity investors (or perhaps the cleverness of MBIA’s flacks picking the middle of the night to release a fourth quarter earnings announcement that fell considerably short of already-low expectations). Thursday we had the remarkable spectacle of MBIA CEO Gary Dunton making statements that can only be […]
Read more...In a succinct and well argued Financial Times comment, Richard Duncan weighs in on the savings glut versus overspending (aka money glut) theories of global imbalances, and concludes it’s the spending, stupid. By way of background, let’s review the two competing notions of the causes of global imbalances, which is shorthand for “nice central banks […]
Read more...Merrill Lynch has been under investigation by the Massachusetts state attorney general’s office over the sales of CDOs to Springfield that had fallen in price by 91%. The issue was that Springfield had made clear that its investment policies were conservative and these instruments were clearly inappropriate. There was further fuel for the fire in […]
Read more...Science in Finance IV: The Feedback Effect Paul Wilmott (hat tip jhttp://www.aleablog.com/links-4/ck). A nice short piece that helps in responding to zero sum arguments (“oh, it really isn’t so bad if prices fall, after all there was someone on the winning side of those trades.” That ignores the fact that those trades at the margin […]
Read more...I am having a Dean Baker moment, although I suspect Baker will have even more fun with the front page New York Times article bearing the headline above. This is how the story starts: China’s latest export is inflation. After falling for years, prices of Chinese goods sold in the United States have risen for […]
Read more...Readers probably know that among the data releases du jour was the Labor Department reporting an increase in unemployment claims to a 27 month high, a level not seen since Hurricane Katrina. Blogger knzn made note of an item mentioned in passing in some news reports, namely a sharp fall in the employment index maintained […]
Read more...The turn of phrase in financial reporting can sometimes be a hair misleading. Today’s Bloomberg story reporting on marked price increases in the credit default swaps market in the wake on news overnight from MBIA and Standars & Poor’s, starts out by saying, “The risk of companies defaulting soared…..” No, the risk of companies defaulting […]
Read more...A comment by Ricardo Hausmann in today’s Financial Times takes US policymakers to task for trying to prop up demand and stave off a recession. We’ve pointed out repeatedly, as have various economists quoted here, that consumption as a percentage of US GDP is unsustainably high and saving correspondingly too low. It can only continue […]
Read more...We had been wondering when subprime-related securities litigation would get going in earnest. New York attorney general, Andrew Cuomo, along with Connecticut attorney general Richard Blumenthal, has been investigating whether underwriters failed to disclose relevant information to investors in subprime deals. The latest development, according to the Wall Street Journal, is that Cuomo has issued […]
Read more...