This Administration is not merely incapable of learning, but seems insistent on doing the wrong thing with a vehemence. The invasion of Iraq was a violation of international law (the fig leaf of UN Resolution 1441 in the run up to the invasion has not impressed the experts), an attack on a country that posed […]
Read more...Memorial for bear that served in WWII BBC Economic stimulus package: criticism grows ataxingmatter The $600 Mortgage Multiplier Marginal Utility. Ken Houghton has found the most ridiculous CEO pronouncement I have seen in a long time. Which Private Equity Firms Create the Weakest Companies? Deal Journal, Wall Street Journal The great fiscal stimulus package … […]
Read more...A reader pointed us to the fact that the State of Massachusetts has issued subpoenas to MBIA and Ambac regarding bond issued by Massachusetts cities and town that they guaranteed from January 1, 2006 onward. According to CNN, the state is investigating whether the insurers made adequate disclosure of their involvement in mortgage-related instruments. Put […]
Read more...Don’t get too excited, this move by New York City and State to sue lead manager Goldman, 25 other underwriters and accounting firms over a Countrwide stock offering is routine securities fraud, in this case making misrepresentations about the company’s prospects. No one has yet to develop a legal theory to go after Goldman for […]
Read more...Willem Buiter’s immediate reaction to the Fed’s emergency rate cut earlier this week was sharply negative, and upon reflection, his view has become even more critical. Buiter sees the reason for the cut as a “knee jerk” response to the prospect of a sharp fall in equity prices. He looks at the proximate causes of […]
Read more...Bad credit-related news continues, and if the Dow is any measure, the stock market response is subdued. Barclays estimates that the losses that banks would take due to bond insurer credit rating downgrades and the impact on the instruments they insured would be $143 billion if they are downgraded to single A (I find that […]
Read more...Despite New York insurance superintendent Eric Dinallo’s desire to move a rescue of bond insurers along with all possible speed, and the very real pressure of an imminent downgrade (note that Security Capital Insurance was downgraded five levels by Fitch yesterday from AAA to A), there was perilous little in the way of progress. Indeed, […]
Read more...Brad Setser has an excellent post, “The PBoC’s dilemmas,” which he later admits is really China’s dilemmas. He focuses on two issues. First is that due to the loosening of the yuan peg against the dollar, the central bank is losing $4 billion a month, mainly on its Treasury holdings (note this is due to […]
Read more...Bill Ackman of hedge fund Pershing Square has gotten a considerable amount of flack for his outspoken, negative views of the bond insurers, particularly MBIA and Ambac, which his firm has shorted. Ackman has been circulating a detailed analysis that estimates that the additional equity needed to maintain an AAA rating at the two biggest […]
Read more...Stimulus Gone Bad Paul Krugman, New York Times. Krugman’s ability to present economic ideas simply without compromising accuracy is a rare skill indeed. The iPhone Meets the Fourth Amendment Adam Gershowitz. Absrtact: Imagine that police arrest an individual for a simple traffic infraction, such as running a stop sign. Under the search incident to arrest […]
Read more...Mortgage servicing, a business about which most people were once blissfully ignorant, is increasingly getting less-than-good press. The latest sighting comes from Katie Porter at Credit Slips, who tells of pending litigation against Fidelity National, a big, behind-the-scenes player in the servicing game. Effectively, Fidelity was taking extra compensation that was unseen by bankruptcy judges […]
Read more...The knives are out on Wall Street,, the cyclical ritual has begun. First the story is that the firms are excising businesses and people who were there only by dint of being in the right place during the frenzied upswing, but truth be told, really aren’t up to the firm’s standards, or so goes the […]
Read more...Ooh, either Wilbur Ross, a savvy investor in distressed assets, has completely lost his judgment with his advancing years, or he has been leaned on by the powers that be to look at this deal in the hopes that it might bring others to the table. But remember, Marty Whitman, another storied distressed investor, owns […]
Read more...I hate to be a nay-sayer, and I want to make it clear that it really would be for the best if New York State insurance superintendent Eric Dinallo could pull off a rescue of the troubled bond insurers. But as we pointed out, this is an uphill battle under the best of circumstances, and […]
Read more...George Magnus, the UBS economist who popularized the concept of a Minsky Moment and has been prescient in his bearish calls on the credit markets, veered today and, in a Financial Times comment, “More is needed to unblock credit arteries,” gave unqualified support for aggressive monetary easing. Put it another way, when mere New York […]
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