Although talk of deep OPEC production cuts and hopes for an auto industry rescue have given oil prices a boost, the fundamentals are far from out of the woods. Indeed, as OPEC bravely claimed demand and supply really weren’t so far out of whack (was that at effort to set the stage for a less-than-hoped […]
Read more...This is seriously not good, particularly since extending unemployment benefits is one of the preferred mechanisms for economic stimulus (unlike other ways of getting money to citizens, this mechanism is likely to lead to pretty much all being spent, which is the object of the exercise). Now some way will be found to make sure […]
Read more...Markets in Asia are staging a peppy rebound rally on the assumption that US rescue of the Big Three is in the cards. No one seems to be taking seriously the possibility that bankruptcy is inevitable for GM and perhaps Chrysler. And were that to take place, opinion is sorely divided as to what that […]
Read more...There is a rather amusing story at the Financial Times tonight, “Credit card reforms ‘to cost banks billions’”. Let’s look at the particulars. The story is based on a study by law firm Morrison & Forester which concluded that banks will suffer a world of hurt if they are forced to give up practices like […]
Read more...Cracks in the crust Economist, On Iceland. The Man Who Is Unwinding Lehman Brothers New York Times. A profile of Harvey Miller, which mentions in passing that he think the firm could have been put into bankruptcy in a way that would have been less disruptive to the markets. How high-risk mortgages crept north Globe […]
Read more...So how did Madoff get away with his $50 billion fraud? Time will tell when and how it started, although I’d hazard the dot com bust. Madoff may have been unwilling to report losses, and assumed (initially) that no one would be hurt if he fibbed if he could eventually trade his way out of […]
Read more...The most accurate banking analyst, Meredith Whitney, has warned that banks are likely to continue to restrict consumer credit, particularly if reforms to end “gotcha” practices, like universal default and double-cycle billing, are implemented. Credit card issuers shifted their model away from one where they earned a reasonable return from all types of customers – […]
Read more...Over a weekend, word leaked out that AIG is paying yet more retention bonuses. This move is making a complete and utter sham of the supposed punitive elements of the rescue. But clearly, there was not enough of an adverse reaction to the earlier announcements of retention bonuses to deter the giant insurer. A few […]
Read more...Waste coffee grounds offer new source of biodiesel fuel EureakAlert It’s Bank Failure Friday again Interest Rate Roundup The Stock Market Still Hopes for a Bailout Jim Surowiecki, New Yorker (hat tip reader Scott) Big 3 Get Lifeline in Bank Rescue Aid Wall Street Journal. Provides useful detail on where the TARP funds stand and […]
Read more...I’m reproducing the bulk of a very good (and possibly final) post by London Banker, a former central banker and securities regulator, that takes issue with some of the conventional wisdom surrounding the efforts to remedy our economic crisis via liberal applications of monetary easing and fiscal stimulus. I happen in general to be sympathetic […]
Read more...In more normal times, when a company faces the risk of bankruptcy but believes it has a viable business, it files for Chapter 11 and works out a deal with its various creditors. To keep functioning (and paying its lawyers) while the court proceedings are in motion, large companies have resorted to debtor-in-possession financing. The […]
Read more...I had wondered whether former Lehman CEO was more than a tad unbalanced. Anyone who can tell a business peer, as he reportedly did to John Thain, that he would reach down the throat and tear out the heart of those who might be disparaging Lehman, at a minimum is wanting in propriety and decorum. […]
Read more...Elephants ‘die earlier in zoos‘ BBC Lost seal rescued from field BBC Energy-Generating Floors to Power Tokyo Subways Inhabitat Somali Pirates to acquire Illinois Senate Seat Rolfe Winkler (hat tip Felix Salmon) Focus switches to ‘Lady Macbeth’ of Illinois Independent Bernie Madoff: The Indictment Clusterstock UK consumers adopt Depression-era mentality, Asda head says FT Alphaville […]
Read more...GM and Chrysler have been stretching payables, which means that many auto parts suppliers are in dire cash flow straits. And if auto parts makers fail, it doesn’t hurt just the Detroit car makers, but the foreign transplants as well. From the New York Times: With Congress failing to agree on a bailout for Detroit, […]
Read more...If $50 billion really went poof in Bernie Madoff’s self-described Ponzi scheme, where did the proceeds go? This has to top what any dictator ever siphoned out of a banana republic. (Note that the Journal suggests that at least $17 billion has disappeared, so inflation adjusted, the Perons may be ahead). The story also suggests […]
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