When Merrill announced its surprise writedown of super senior CDOs yesterday, all eyes turned to Citigroup, another large holder. Analysts started sharpening their pencils and have offered updated estimates. From Bloomberg: Citigroup Inc. probably will write down the value of collateralized debt obligations by $8 billion in the third quarter based on Merrill Lynch & […]
Read more...It would be nice if Fannie and Freddie would have the good taste to stay out of the spotlight, particularly since bad news is a sign of higher odds that Things Are Not Going Well, Especially for Bagholders Taxpayers. However, it looks like we may not be so lucky. Bloomberg’s Jonathan Weil did some digging […]
Read more...Many readers over the weekend commented on National Australia Bank’s stunning writedown of A$830 in “super senior” CDOs, which resulting in a valuation of ten cents on the dollar, and speculated that this move had implications for US banks. Then Merrill announces a surprise writedown, out of sync with its reporting cycle. Could the two […]
Read more...This topic is and yet isn’t a bit afield from the normal beat of this blog. A reader sent links to some recent posts at Bronte Capital, a blog by John Hempton, which is reportedly read by top financial executives in Sweden and has a following among some of the more savvy analysts in London. […]
Read more...Alaska Opts for Underground Energy The Future of Things Friday’s remote solar eclipse will be on Internet PhysOrg Australia abandons asylum policy BBC A Touch of Crash: Depression Era Chic New York Post (hat tip Michael Panzner). Does that mean my old WASP propensity to wear things until they are on the verge of falling […]
Read more...Even though the Fannie and Freddie near crisis, which produced a few days of panic in the credit markets, now seems to have abated, money market investors are still on edge. The Financial Times warns that various risk measures remain at elevated levels: Libor, the measure of inter-bank interest rates that is a key barometer […]
Read more...From the New York Times today: The covered bond markets in some European countries have suffered to some extent from house price declines, but the markets have not closed down as the private-label securitization market has in this country. From the Financial Times last November: Volatility is virtually unknown in the near 240-year-old market for […]
Read more...Wow, Merrill is raising cash like there is no tomorrow. Which of course makes one wonder what they know that the rest of us don’t yet know. From Bloomberg: Merrill Lynch & Co. said it will record $5.7 billion of pretax writedowns in the third quarter because of additional losses on the sale of collateralized […]
Read more...It no doubt seems absurd to question the idea that deleveraging in underway. We’ve had three heroic central bank interventions, starting in August 2007, to reverse seize-ups in the money markets. The asset backed commercial paper market has been almost in run-off mode. Leveraged buyout loans have been scarce to non-existent. Banks have cut home […]
Read more...Japanese sushi rage threatens iconic Mediterranean tuna PhysOrg Nukes Are Not the Best Way to Stop an Asteroid Wired. In case you wondered. Ben Stein Watch: July 27, 2008 Felix Salmon Agency Subpoenas Focus on 4 Rumors That Hit Lehman Wall Street Journal As Doctors Cater to Looks, Skin Patients Wait New York Times Mortgage […]
Read more...There have been quite a few anecdotes about a new tough-mindedness among banks, and it is finally showing up in the data. From the New York Times: Two vital forms of credit used by companies — commercial and industrial loans from banks, and short-term “commercial paper” not backed by collateral — collectively dropped almost 3 […]
Read more...From the New York Times: “I cannot find a single convincing argument that tells me that astrologers won’t do better than economists,” Mr. [Nassim Nicholas] Taleb said last week by telephone from Lebanon, where he was mountain hiking. “The problem is the arrogance of these economists,” he said. “They’re making people rely on theories that […]
Read more...You simply cannot make this stuff up. Reader Steve pointed us to a HousingWire post, which says that mortgage servicers may too come knocking on the Fed’s window for financial support, thanks to the housing bill just passed by Congress. Now we’ve been told by mortgage counsellors involved in the Hope Now Alliance that servicers […]
Read more...Former regional Fed president William Poole argues forcefully in a New York Times op-ed today that Fannie Mae and Freddie Mac are not only unnecessary but also distort the financial markets and should be wound down. This program would also be consistent with a strategy of minimizing risk and cost to taxpayers. Probably due to […]
Read more...Uncertain future for elephants of Thailand PhysOrg BP’s Russian boss goes into hiding Times Online and Russians claim control of TNK-BP as court battle looms Guardian Can Hank Paulson Defuse This Crisis? New York Times. Ooof, this piece is positive about Paulson in an understated way, and stresses that he has a lot of clout […]
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