From coverage of Congressional hearings in the New York Times (hat tip reader Tom): [Former AIG CEO Martin} Sullivan also came under fire for reassuring shareholders about the health of the company last December, just days after its auditor, Pricewaterhouse Cooper, warned of him that AIG was displaying ”material weakness” in its huge exposure to […]
Read more...Now that the world is in the throes of the mother of all financial messes, economists are scrambling to develop expertise. Carmine Reinhart and Kenneth Rogoff recently had this beat largely to themselves. but in the last two weeks, the IMF came out with a stud of 124 modern banking crises. The latest addition to […]
Read more...Another day, another rescue? Well, at least another rescue petition. From Robert Peston at the BBC: Well last night a trio of the UK’s biggest banks – Royal Bank of Scotland, Barclays, and Lloyds TSB – signalled to Alistair Darling that they’d like to see the colour of taxpayers’ money rather quicker than he might […]
Read more...I must confess a certain fondness for the apocalyptic sort of financial writer, provided they don’t lose anchoring with reality and fall into the tinfoil hat category. Nouriel Roubini is the case example of an economist who favors a baroque, melodramatic style, and despite sounding more than a tad unhinged at points, he has proven […]
Read more...Now we see how the Fed’s toolkit is not well suited to the problem at hand, and its next-best moves are dubious indeed. Acute conditions in the commercial paper market, a vital source of short-term funding for large corporations and banks, threaten to produce a sharp contraction in business activity. Commercial paper defaults have been […]
Read more...Willem Buiter has a penchant for ruffling feathers with his blunt pronouncements. He caused a firestorm at the Fed’s recent Jackson Hole conference by, in his presentation, telling the central bank that it was a victim of “cognitive regulatory capture” and was excessively sensitive to the needs and special pleading of the financial services industry. […]
Read more...Even with Japan’s banks largely on the sidelines in the international housing bubble (US subprime exposure is a mere $8 billion), its money markets are suffering the effects of the flight from risk. Both Japan and Australia pumped more funds into their markets to combat banks’ unwillingness to lend to each other. From Bloomberg: Japan […]
Read more...Mammals facing extinction threat BBC Sumo schoolgirl hopes for glory at world championships Telegraph Australian jet plunge injures 40 BBC. Qantas has never killed anyone, but they seem to be coming increasingly close to doing so. Are Bad Times Healthy? New York Times You’re Owed Euros David Merkel Lehman Said to Cancel Ex-Employees’ Severance After […]
Read more...There was a remote chance of a rebound rally (and I don’t mean anything jazzy) but the news that Bank of America, heretofore regarded as a sound institution (how with its credit card exposures and acquisition of Countrywide is beyond me) will cut its dividend by 50% and raise $10 billion to bolster its balance […]
Read more...Venezuela has lots of oil, but it is heavy and sulphurous, which means it is costly to refine and is not terribly viable uniess oil prices remain high for a sustained period (refinery capacity is now skewed towards the sweet, light grades). That’s why Venezula, along with Iran, is the most aggressive among OPEC members […]
Read more...We noted earlier today that neither the signing of the much-touted bailout bill, nor the dramatic increase in size of the already bulked-up Term Auction Facility (it has been enlarged six-fold in a mere two weeks) has had any impact on conditions the money markets, which are barely functioning. We noted earlier and reiterated that […]
Read more...The increase in the size of the Term Auction Facility, from $150 billion a month ($75 billion per two 28 day auction) as of its last auction to $900 billion today (with an interim plan to go to $450 billion that was blown past in this announcement) is an admission that the banking system is […]
Read more...Wolfgang Munchau, who writes for the Financial Times and the blog EuroIntelligence, argues that the fact that EU member nations managed to survive their first series of bank failures does not mean it can afford to take the risk of defaulting to continued improvisation. Munchau comes out squarely in favor of a coordinated, funded rescue […]
Read more...The specter of six major financial institutions failing in a mere two weeks has confirmed the wisdom of banks’ tendency to hang onto their money and not lend it out to their bretheren. The bailout bill passed last week appears to have made nary a dent in the tightfistedness; it’s an open question as to […]
Read more...Register to vote October 6 is your last chance in a many states. No Naked Black Holes Science News. No crude comments, since it took some effort to restrain myself. Birth of an Ocean: The Evolution of Ethiopia’s Afar Depression Scientific American Starbucks ‘wastes 23 million litres of water a day’ Telegraph Short shrift James […]
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