The Financial Times reports that residential real estate prices fell in the third quarter in Manhattan, according to data from a real estate appraisal firm. Getting good data about Manhattan real estate activity can be a tricky affair, since a big chunk of the market is co-operatives (buyers acquire shares in the co-op corporation, which […]
Read more...Reader Michael passed along the Economist review of a new book, Capitalism with Chinese Characteristics: Entrepreneurship and the State by Yasheng Huang, which turns conventional wisdom about China on its head. It contends that, post-Tiananmen Square, new Chinese leadership shifted its approach to economic development to one that had more state direction than before, and […]
Read more...Oh, this could get ugly. The Wall Street Journal reports that Lehman’s unsecured creditors are calling on the bankruptcy court to examine why the investment bank ran out of funds. The suit argues that JP Morgan abused its role as clearing bank, retaining $17 billion of excess collateral which Lehman could have used to stave […]
Read more...As the recession takes hold and increasingly looks to be a nasty affair, analysts are quickly revising forecasts to levels that would have seemed barmy a mere month ago. The latest is a new Merrill call that oil could drop to $50 a barrel, although the report waffles hugely by deeming a global recession “unlikely”. […]
Read more...From the Wall Street Journal: U.S. House of Representatives lawmakers wary of growing signs of the nation’s economic distress voted in favor of a $700 billion Wall Street rescue package on Friday, sending the biggest government intervention in the financial markets since the Great Depression to President George W. Bush for his signature. The vote […]
Read more...Even though the markets are looking for a boost from the expected passage of the bailout bill, which means they have faith in the US government’s ability to pay, that trust does not appear to extend to states and municipalities, who like companies, are having trouble raising money in the credit markets. Some government bodies […]
Read more...Although the housing contraction started later in England than in the US, the credit and real economy contraction has progressed at a quicker clip. The latest sightings are not pretty. The Independent reports that new home construction has plummeted to a 50 year low: New private house-building is at a 50-year low, according to an […]
Read more...We wrote a couple of days ago that one of the reasons for rescuing AIG was that its failure would have had a devastating impact on EU banks. The insurer had entered into credit default swaps that enabled European banks to evade minimum capital requirements. Thus, an AIG failure would have put a considerable number […]
Read more...Best cat evah Larvatus Prodeo Playboy Seeking Wall Street Women Huffington Post Woman Buys House For $1.75 On EBay Consumerist ‘Static’ Blamed for D.C.’s Extra Votes Snafu News8. And the dog ate my homework… Sarah the Soundbyte Palin Diane Francis. The view from Canada. McCain’s Stock Collapses Silicon Alley Insider Paulson-Bernanke Decisions Created `Big Ripples,’ […]
Read more...Traders play to win, and hedge funds are unconstrained by big-firm considerations, like turning your clients into your next meal is probably not a good strategy for long-term survival. But even then, brokers are widely believed to play dirty. Hedge funds avoid revealing their positions to their prime brokers (funds of any size have two […]
Read more...Yet another subject of worry is whether the global financial crisis will fracture the EU fatally. While the ECB coordinated rescue of Fortis was a positive sign, Ireland’s move to guarantee all bank deposits was a blow, since it is drawing funds from EU institutions to Irish ones. French president Sarkozy had proposed a 300 […]
Read more...Even though the deeply flawed bailout bill appears to be moving relentlessly towards passage by the House, it hasn’t deterred pundits and experts from coming up with better alternatives. Since the smart money expects this so-called “Mother of All Bailouts” to be another chapter in a series, it’s worth keeping tabs on these ideas, since […]
Read more...Most observers have taken as a given that the increased disinclination of banks to lend to each other is counterparty risk, that is, the fear the money they lend out won’t come back, or at least on the initially promised timetable (bankruptcy proceedings take time and usually lead to losses by unsecured creditors). Some wags […]
Read more...Oh boy, this is badly timed. The run on money market funds appears to have abated, thanks to the insurance plan implemented by Treasury, but the commercial paper market, important for day-to-day business funding is still under big-time stress because the amount of money committed to short-term, non-government holdings has contracted. The new bit of […]
Read more...In the last few days, virtually all mainstream financial media outlets have taken up the banner for the passage of the deeply flawed bailout bill. A bit late in the game, BreakingViews, which is insightful but hardly extreme in any of its positions, argues that the Paulson plan directs capital to where it will not […]
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