The yen is up again, and superficially, it looks like a repeat of a predictable sequence: risk perceptions rise, investors start to shed risk, carry trades unwind, yen rallies, everyone calms down, the yen falls and the carry trade resumes. Since the Japanese love a cheap yen and domestic investors are well conditioned to buy […]
Read more...How the Pentagon planted a false story Asia Times Giant self-destructing palm tree BBC Cholesterol as a Danger Has Skeptics New York Times. This has been a hobbyhorse of mine for years, and I finally see conventional wisdom coming around to my point of view. Antidepressants Under Scrutiny Over Efficacy Wall Street Journal. We are […]
Read more...Bloomberg reports that Standard & Poor’s has announced that it will review bond insurers’ ratings a mere month after reaffirming the scores of MBIA and Ambac, due to subprime losses exceeding the rating agency’s assumptions. Note this move was anticipated, but the statement suggests the fate of the bond guarantors has elevated priority and the […]
Read more...MBIA’s already richly priced bonds declined 12% in the first week after issuance The issue had been priced as if MBIA were a distressed credit, even though it still has an AAA rating. How long can the rating agencies keep this charade going? Per the decline, a reader who saw this before I did aptly […]
Read more...Martin Wolf’s current comment is great fun. He makes a recommendation which is logical and well argued but so contrary to the prevailing orthodoxy that it is sure to elicit a lot of ire. And I guarantee it will be misconstrued as well. Wolf notes that banks (and we can include investment banks) have succeeded […]
Read more...The UK housing market (and indeed the UK economy) seem to be proceeding on the sorry path that we are on. However, forecasts are far from dire, pointing to a softening rather than a sharp fall. But gee, didn’t we see that movie here? Update: Reader vlade chided me for perhaps creating the impression that […]
Read more...There has been an enormous amount of fulminating about rating agencies, yet they solider on, their status still secure even if their reputations are considerably tarnished. John Dizard in today’s Financial Times adds some grist that is likely new to many readers. He discusses how the rating agencies operated before the SEC created the “Nationally […]
Read more...Never ones to miss an opportunity to lose money, the top Japanese banks, finally having recovered from lending against wildly overvalued collateral, and then suffering nearly two decades of working out zombie loans (or more accurately, being insolvent but being allowed to operate anyhow, since reviving the crappy banking sector one has is easier than […]
Read more...Particularly good stuff today… How Wall Street Broke the So-Called ‘Free Market‘ Andrew Leonard, Salon (hat tip Dave Iverson) The Kucinich court decision and “judicial activism” Glenn Greenwald, Salon (hat tip Lune). Salon is on a run… Coca-Cola Urged to Close an Indian Plant to Save Water New York Times. A harbinger of things to […]
Read more...If there was any pretense that this country was anything other than a plutocracy, today’s Supreme Court decision should have dispelled that illusion. Banks and other vendors, meaning folks like auditors, now can operate more confidently in serving corporations at the expense of investors thanks to today’s ruling. To give you an idea of how […]
Read more...After bond fund giant Pimco’s Bill Gross gave a back-of-the-envelope estimate of a possible $250 billion in losses resulting from the impact of deteriorating corporate credit and bond defaults on the $45 trillion (notional amount) credit default swaps market, other commentators have been making improved (but still quick and dirty) calculations. One interesting effort appears […]
Read more...While there is some debate about whether and how much fiscal stimulus is warranted to combat a likely recession (yours truly thinks that we are in a no-win situation, with side effects likely to be as bad as the disease), some sort of program seems inevitable, particularly since this is an election year. So then […]
Read more...Ooh, I am ill. The Financial Times seems to have scooped this story (I don’t see it on Bloomberg). In keeping with Greenspan’s tutelage at the knee of Ayn Rand, he has exercised his right not to be constrained by propriety or other rules that govern little men and has gone and sold himself to […]
Read more...Legal mist stokes US-Iran tensions in strait Asia Times. Very interesting reading on the incident (or not) in the Straits of Hormuz. Turns out our right to have surveillance ships there is (to put the kindest possible spin on it) far from clear. Baltimore Finds Subprime Crisis Snags Women New York Times. Sad but not […]
Read more...The ratings agencies are newly emboldened, or perhaps feel the need to look tough where they can to make up for their tattered reputations elsewhere. The latest salvo: Moody’s has announced that it will take a haircut to the debt ratings of companies owned by buyout firms that engage in “aggressive” financial strategies. The more […]
Read more...