This is on top of the $330 billion increase in dollar swap lines we mentioned this morning. From Bloomberg: The Federal Reserve will pump an additional $630 billion into the global financial system, flooding banks with cash to alleviate the worst banking crisis since the Great Depression. The Fed increased its existing currency swaps with […]
Read more...Consumers, whose spending had been THE driver of this economy, shut their wallets in August. From Reuters (hat tip reader Brian): Consumers facing rising unemployment kept their spending unchanged in August even though incomes rose, according to a government report Monday that showed optimism about the economy’s direction was fading. The Commerce Department said consumer […]
Read more...I’m actually quite surprised. The stock market in a panic. I wonder whether Paulson and Bernanke have a Plan B. Jamie Galbraith outlined a good interim idea (needs tweaking but has merit) in the Washington Post last week. Hope someone paid attention. From Bloomberg: U.S. stocks plunged and the Standard & Poor’s 500 Index tumbled […]
Read more...The numbers attached to various emergency interventions just keep getting bigger and bigger. From Blooomberg: The Federal Reserve increased the size of previously arranged currency swaps with foreign central banks to $620 billion from $290 billion to make more dollars available to banks worldwide. Banks and brokers have slowed lending as they struggle to restore […]
Read more...We had grumbled last week that the Treasury had left its money market guarnatee program in the never-never land of “we’ll get back to you with details. The program is now in effect on a short-term basis. One hang up with any program of this sort is that the powers that be do not want […]
Read more...Note that unlike the FDIC’s resolution of WaMu, senior and secured debtors are preserved, but the FDIC may wind up absorbing some losses on a pool of Wachovia loans. But the agency also will take upside stake in Citi. From the Financial Times: Citigroup on Monday said it would acquire the banking operations of Wachovia, […]
Read more...An excellent comment in the Financial Times by Wolfgang Munchau discusses how the gold standard for handling banking crises, the Swedish model, would take even more discipline to implement in the US and how we are dong the reverse of what is needed.It is a levelheaded analysis which stands in stunning contrast with a bit […]
Read more...Reader a pointed us to an article in the Financial Times which we missed over the weekend, and a quick survey of blogs suggests we weren’t alone in overlooking it. The article addresses an issue that has not gotten much airing, namely that Libor, which is currently at elevated levels thanks to the credit crisis, […]
Read more...Did we say really? Even by the normal standards of Roubini’s tendency to hyperventilate state his case forcefully, the good professor rises to levels of choler heretofore unseen. Roubini focuses on many of the issues we have discussed in our earlier posts (most notably this one) but he teases out some of the issues in […]
Read more...Private equity boss kills himself Times Online Analyzing The Bailout: What’s In It, Anyway? Clusterstock. A good, pointed summary. The NYT Wants the Government to Support the Price of Pets.com Dean Baker. Lehman’s Demise Triggered Cash Crunch Around Globe Wall Street Journal. A weird piece. It focuses mostly on the history of Lehman’s unraveling, and […]
Read more...For a quick, one-stop synopsis of the Mother of All Bailouts (as of this month), see this readable version at Clusterstock (we’ve become a recent convert to this site). Reader and sometimes contributor Lune, who was once a Congressional staffer and still subscribes to the the inside-the-Beltway press, provided a wrap of their coverage of […]
Read more...The Baltic Dry Index, which measures international shipping rates, is seen as a rough proxy for global growth. But like a negative yield curve, falls in the Baltic Dry Index have as often as not proven to be false positives. However, the BDI has taken a dramatic turn south, and in combination with weakening economic […]
Read more...Various readers wrote us, and it was confirmed by a detailed report on the call at DealBreaker, that the Treasury Department held a conference call this evening for analysts on the bailout bill. A memo was evidently sent to SIFMA members; others may have been contacted by other means. But the report I got from […]
Read more...The prospect of an almost-as-big-as-Lehman bankruptcy evidently focused the mind of the officialdom. The providers are private firms, but one imagines, a la the LTCM rescue, that they were given a big prod by regulators It appears the amount of the facility is sufficient to refund maturing paper, but likely falls short of the end […]
Read more...Banks are falling over like kingpins. Not good at all. First, on the Fortis salvage operation: Belgium, The Netherlands and Luxembourg invested 11.2 billion euros ($16.3 billion) in Fortis, Belgium’s biggest financial-services firm, to restore confidence in the bank after shares fell 35 percent last week. Belgium will buy a 49 percent stake in Fortis’s […]
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