We’ve cribbed the title of a provocative post by Satyajit Das at Eurointelligence. He argues that the US’s days of continuing to borrow abroad with little worry as to the consequences may be nearing an end. A good companion piece is Menzie Chinn’s Implications of adjustment to riskier dollar assets in a portfolio balance framework, […]
Read more...I must be missing something here. Not too long ago, Goldman was wiling to act as a principal in LBO financings for deals the firm did and would then syndicate the deal. Now admittedly that was the sign of a bull market peak, that an investment bank would take that sort of risk, but bear […]
Read more...Big state budget shortfalls are an inevitable side effect of a weak economy. The Wall Street Journal reports that the decline is projected to leave states with an aggregate deficit three times the level last year, and suggest that the economy may be weaker than the GDP stats suggest. FYI, I was just on a […]
Read more...James Bianco, a respected fixed income analyst at Arbor Research, was so kind as to pass along his observations about the retreat in oil prices from his morning research note. “Is This Why Crude Oil Is Getting Slammed?”: The Financial Times – Oil trading company files for bankruptcy Access SemGroup, the US physical oil trader, […]
Read more...Yet another sign of deplorable practice in action. Regulators are urging all banks to increase their capital bases. Bank of America bought Countrywide, which lost $2.33 billion last quarter, but management maintains will be profitable by year end (perhaps if they engage in the tactic forewarned by Institutional Risk Analytics, of putting Countrywide in Chapter […]
Read more...Readers may have seen that we cast aspersions on the CBO’s estimate that the Fannie and Freddie rescue program would “probably” cost taxpayers $25 billion. We had noted that the estimate was only through 2009 because that’s how far the authorization extends, but there is no way that Fannie and Freddie will ever be cut […]
Read more...This comment by Paul De Grauwe in the Financial Times, deserves more discussion that I can provide at this juncture (I am about to do a face plant), but I trust readers will find it a worthy offering. De Grauwe focuses on sacred cows that have been gored in the credit crunch. He has written […]
Read more...New white whale spotted BBC Will the dollar lose its throne? Economic fundamentals vs network effects Marc Flandreau, VoxEU Report: Deal Reached on Housing Legislation Calculated Risk. CR highlights that the rescue would be constrained by the federal budget ceiling. That was one of the options that had been discussed. What is new, however, is […]
Read more...Nouriel Roubini and Brad Setser appear to have called this one correctly. Simply staggering amounts of hot money have been flowing into China, betting on faster appreciation of the yuan. or better yet, a significant revaluation. In fact, this level of weight of money would normally be a self-fulfilling prophecy. Hot money is highly stimulative, […]
Read more...One of the perverse side effects of the size and scale of the leading investment and universal banks is that it seems they are largely immune to the traditionally-crippling effects of a serious lawsuit or regulatory failing. Salomon Brothers, a Wall Street powerhouse in the 1980s was seriously wounded in its Treasury bond scandal and […]
Read more...And subprime was contained…… I am curious: what expertise does the CBO have in developing an independent view of the two GSE’s exposures? The CBO was no doubt dependent on the GSEs and/or the Treasury for key elements of the analysis. Moreover, if you connect the dots suggested in the Bloomberg story, the analysis was […]
Read more...The US has managed to get itself in a no-win situation on many fronts. Try the usual trick of fiscal stimulus to combat a downturn, and our friendly foreign funding sources are likely to take a dimmer view of Treasuries. Higher interest rates (in a worst case scenario, a dollar crisis) could easily counter any […]
Read more...A dash of lime — a new twist that may cut CO2 levels back to pre-industrial levels PhysOrg Ken Wilson: The Goldman Sachs Man Behind Your Bailouts Deal Journal, Wall Street Journal. A surprisingly thin bio of Wilson, who started out at Salomon Brothers and was partner with Lew Ranieri in the appropriately named Ranieri, […]
Read more...The political theater continues. The New York Times reports in “Bush Prods Congress, as Financiers Are Inspected,” that the Fed and the OCC are giving Fannie and Freddie the once-over: Bank examiners from the Federal Reserve and the Comptroller of the Currency are inspecting the books of the nation’s two largest mortgage finance companies, Fannie […]
Read more...Faithful readers (and promiscuous ones too): I am going to San Francisco tomorrow to appear on a panel at the Inman Real Estate conference, returning Thursday. I hope to keep up with a more or less normal volume of posts, but my own commentary may be a bit thin. You probably notice we have been […]
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