Stressed plants ‘produce aspirin’ BBC Do squirrels really know how to avoid cancer? Roland Piquepaille The 10 most bungled robberies ever Times Onlne Harnessing New Technology To Keep Older People Behind The Wheel For Longer Science News Calling Paulson’s Bluff Robert Knutter, Huffington Post Barack Obama: Principles for the Nationalization of Mortgage Finance Brad DeLong […]
Read more...With banks still holding LBO loan inventory that they’d like to be rid of, and recent sales requiring seller financing, it’s no surprise that loan prices continue to decay. From the Financial Times: The value of leveraged loans fell to record lows during the past week, creating further potential mark-to-market losses for both investors and […]
Read more...The latest “Let’s do something, anything” move to rescue the financial system is yet another example of expediency trumping sound long-term measures. The motivation for making Goldman and Morgan Stanley banks seems obvious: the powers that be seem determined to prevent either firm from going under. Being banks gives the firms access to a expanded […]
Read more...Paulson has tweaked the language of the bailout bill, with the Freudian-slip acronym TARP (“Troubled Asset Relief Program”) to make some additions that in theory make it more sweeping but in practice, with no review or oversight, the Treasury can do what it bloody pleases; the rest of the language of the bill, besides the […]
Read more...Our mantra of late has been that the serial bailout plans from the Treasury and Fed will undermine the US’s AAA rating and exact a considerable toll on the dollar. Indeed, Liam Halligan tells us in the Telegraph today that “Default by the US government is no longer unthinkable.” Bloomberg reports that this view is […]
Read more...A mere two weeks ago, the Fannie/Freddie rescue was called “the mother of all bailouts” by some commentators. If the plans of the Administration come to fruition, it will shortly be surpassed by the $700 billion mortgage rescue plan proposed by Hank Paulson late last week. The increase of the request from the initial $500 […]
Read more...Taxes will soar in credit crisis Times Online Weekend Special: Financial Poetry by Popular Demand Macro Man Potentially more toxic than sub-prime: the £6.6bn of ‘Alt-A’ that spooked HBOS investors Independent The housing meltdown: Why did it happen in the US? Menzie Chinn Oppose The Treasury’s Bailout Plan David Merkel Ambac Setback Scurvon Investing. In […]
Read more...For those who thought outsized pay for investment bankers and traders was a thing of the past, think again. Ditto with the idea that having been a key actor in a financial failure dims one’s employment prospects. The poster child is John Meriwether, the head of hedge fund Long Term Capital Management, whose collapse in […]
Read more...‘Tent cities’ of homeless on the rise across the US Telegraph Hank Paulson’s legacy will be very dull financial institutions Damian Reece Telegraph Some Observations on the Ongoing Crisis: Causes and Opportunity Cost Again Menzie Chinn, Econbrowser Antidote du jour:
Read more...Repeat after me: bye bye the US’s AAA rating and the dollar. Although the Paulson’s plan is only sketchy, on the surface, it is utterly ridiculous. The authorities propose to save the economy by buying mortgage paper at market prices. Why do we need the government to create a massive and costly effort to buy […]
Read more...As we noted in a post yesterday, the assault on the evil shorts may wind up being a case of unintended consequences, since the investors targeted, mainly hedge funds, often use leverage supplied by their friendly prime broker (Goldman and Morgan Stanley are far and away the biggest in that business). If funds take big […]
Read more...New measures to shore up the markets are coming so fast and furious that it is becoming hard to keep track of them. What most people do not realize is that they produced some not-very-pretty unintended consequences. As we discussed (courtesy reader Lune) at the time: 1) Congress raises conforming limits on Fannie/Freddie to help […]
Read more...Oh boy, bye bye the US AAA rating (at some point, not due specifically to this move, but from the philosophy it represents) and the dollar. The financial markets are simply too large for the US taxpayer to stand behind them all, but that isn’t going to prevent the authorities from trying. And like the […]
Read more...I try to avoid quoting post in full, but this one is important, it’s been up long enough that I don’t imagine I am siphoning off any traffic, and the folks at FT Alphaville seem to be good sports. As they reported yesterday in “Truth, the flexibility of facts, and market panics“: Phone rings… FT […]
Read more...Staring in March, I’ve gotten an increasing number of “what should I do with my money>” and the not-uncommon “what should I do about my bank?” None of these were “how do I get make money?” questions. They were all oriented towards safety and showed a high degree of concern. I took these to be […]
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