One of the most troubling aspects of the credit crunch is that even large companies are now seeing its effects. By way of background, the commercial paper is a significant source of short-term funding for big companies and financial firms. Commercial paper is unsecured IOUs (there is another type of commercial paper, “asset backed commercial […]
Read more...We have been asserting for many moons that despite having lower incidence of US style, “another quarter, another writedown” behavior, European banks are actually in weaker condition than their US counterparts. That’s based on the view of a buddy who has top level regulatory connections here and in Europe, and it seems plausible given the […]
Read more...Dutch city awards credit points to well-behaved street prostitutes BBC. I am surprised at this sort of program. The street hookers in Kings Cross in Sydney are uniformly, shall was say, professional. But maybe it is a function of supply and demand. There are probably proportionately fewer girls on the street in Sydney than in […]
Read more...Columbia professor and Nobel prize winner Edmund Phelps writes in a Wall Street Journal op-ed, “We Need to Recapitalize the Banks,” an article appears not to have garnered the attention it warrants in the blogosphere. Phelps comments approvingly on Sweden’s approach to handling its financial crisis, which had as its cornerstone reducing the size of […]
Read more...We have noted several times in the last few weeks that hedge fund redemptions were likely to produce another ratchet-up of intensity of the financial crisis. Nouriel Roubini has also called it as the next domino to fall. Hedge fund have had not-so-hot returns so far this year, on average delivering losses despite promises to […]
Read more...Reader FairEconomist left a short comment on an earlier post which we hoisted along with some other material, on why the bailout bill could make the illiquidity in money markets worse. He left a longer comment j that sets forth the issues, as he sees them, in more detail. I hope readers do not mind […]
Read more...Imitation is the sincerest form of flattery. The bailout bill discussions in the US have apparently emboldened politicians on the other side of the pond to suggest massive rescue efforts. As we have said, one of our colleagues who has high level regulatory contacts in the US and Europe has been telling us for quite […]
Read more...Boy, I wish I had thought of this, and why no one else save some smart readers have focused on the mechanics of the Paulson plan operations is beyond me. This bill is moving ahead like the Titanic…..with high odds of similar outcomes. Hoisted from comments, we turn the mike over to reader Don: The […]
Read more...More detail on all the lovely goodies larded in via Karim Bardeesy at The Big Money (both someone at TBM and reader Jennifer pointed out the piece). Note that this is a partial list: DIVISION C-TAX EXTENDERS AND ALTERNATIVE MINIMUM TAX RELIEF SEC. 308. INCREASE IN LIMIT ON COVER OVER OF RUM EXCISE TAX TO […]
Read more...Here’s a clip: Boy, do I need to get better at looking at the lens. FWIW, this is all done with a computer camera (unlike videotaping or TV) so you only have a teeny light to look at, and you clearly need to keep your eyes locked on it not to look peculiar. Better luck […]
Read more...This comes from an e-mail titled, “It’s worse than I thought,” from a reader with a good deal of inside-the-Beltway experience: It’s Christmas…This has NOTHING TO DO WITH THE ORIGINAL CONCEPT. In fact very little has really been changed with respect to the original Paulson plan…The new PIG has everything to do with Senate Finance. […]
Read more...Bloomberg did not report this story in enough detail to be certain, but as it reads, the EU will be imposing rules on member banks that will require them to hold more capital now. That’s a good thing, right? Banks need more capital, after all. Not exactly, When banks are imperiled, the first priority is […]
Read more...We have a certain fondness for Marc Faber: he knows financial history, he is refreshingly direct, not attached to conventional thinking, and has a record of generally good investment calls (and admits to his mistakes). Reader Dean provided us his latest newsletter, plus a story covering recent interviews (no, Dean is not his PR agent, […]
Read more...Given how overextended consumers are, and how banks have been cutting back on the cheapest piggybank, home equity loans, by slashing those credit lines, and the reports of rising delinquencies from even conservative lenders like American Express, one would think we’d also be hearing more about serious increased in credit card losses. But under the […]
Read more...Demand for gold continues to increase as the rich start to accumulate the metal itself. Nevertheless, the problem with gold as a store of value is twofold. First, for Americans, the US required citizens to turn in gold (presumably coins and bars) in 1933, and they were given paper money at a not-great exchange rate. […]
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