Reader Baruch sent us this tidbit from Reuters: Bank Hapoalim, the second largest bank in Israel, sold its entire portfolio of MBS to Pimco for 75 cents on an already-written-dollar (or in this case, shekel). Note that the previous writedowns were at least $90 million on an portfolio valued before the sale at $3.42 billion. […]
Read more...The headline above is perhaps the most important message contained in the front page Wall Street Journal article, “Energy Watchdog Warns Of Oil-Production Crunch.” Well, in fairness, it may rank as important as the thrust of the article, which is that the IEA, which recently had predicted that oil supplies would be able to more […]
Read more...Reader Richard Kline is providing a mini-series that was prompted by an anonymous reader who had observed that a complex systems theory view might raise doubts about regulatory policy. Financial overseers believe that liquidity is always and ever good, but that view may be naive: Perhaps a lesson to be learned here is that liquidity […]
Read more...It’s hard to read the tea leaves of the European Union at such a remove, but a public show of disagreement, even if done politely, is not an everyday spectacle. Frances’ finance minister Christine Lagarde urged central bankers to alleviate currency misalignment. This is mainly code for “do something about the pricey euro” but is […]
Read more...Ken Funnell at Bank Lawyer’s Blog tells us that Ohio is about to put legislation into effect that will kill payday lending: The new Ohio law would limit borrowers to four short-term loans a year and cap annual interest rates at 28 percent. The bill also would limit loan amounts to $500 per loan, or […]
Read more...Let me make a wee confession: I tend not to follow money supply figures closely, in part because I am not a fund manager (there are only so many things you can watch on the side) and in part because we are missing some key underpinnings that might help make it a useful metric. In […]
Read more...Just when the world at large has become inured to the stories of the role of rating agency incompetence and complicity in our credit mess comes a bit of news that catches the attention of even the jaded. Moody’s had a bug in a program used to rate complex debt securities (constant proportional debt obligations, […]
Read more...Tasmanian tiger DNA ‘resurrected‘ BBC Free-trader fear mongering Dani Rodrik China’s Recovery From Quake to Take 10 Years, World Vision Says Bloomberg The Cure for America’s Chronic Recession Robert Reich A Diploma’s Worth? Ask Her David Leohardt, New York Times Berserkers Funds in Commodities Russ Winter How Safe are the GSEs? Accrued Interest 35 Hour […]
Read more...I’m just a wee observer of skeptical temperament. A move of this magnitude based on one analyst’s reading seems a bit disproportionate. Even Abby Joseph Cohen and Mary Meeker didn’t have this sort of sway in their heyday. However, contracts that far out are thinly traded, so it doesn’t take much of a change in […]
Read more...A story on Bloomberg this morning uncharacteristically lacks a news hook but gives a good deal of color on counterparty risk in the credit default swaps market. The story argues that the other shoe may finally drop in the $62 trillion CDS market due to rising junk bond defaults. We’ve long seen that market as […]
Read more...Just as we pointed out yesterday that different markets had differing implicit forecasts of inflation, not surprisingly, so too do analysts. What makes the outlook for inflation a legitimately a difficult call is not merely weighing the inflationary and deflationary factors, but also considering how the various actors might respond. The focus has been on […]
Read more...The strong continued rise in commodities, particularly the recovery in gold, suggests not only worries about inflation, but the dollar as well. And a dollar reversion appears to be underway. For the last year, if not longer, rallies in the yen have been a sign of investors shedding risk and unwinding carry trades. Yet the […]
Read more...‘Big Brother’ database for phones and e-mails Times Online Reconciling Estimates: Biofuels and Food Prices Menzie Chinn, Econbrowser The Real Source of Gladiator Politics Robert Reich’s Blog Some Closing Comments Across the Curve. This stood out: One salesman reported to me an example of irrational exuberance in the corporate bond market. It seems that on […]
Read more...The warning from the ECB’s chief Jean-Claude Trichet. that the worst of the credit crunch may lie ahead, deserves to be taken far more seriously than other cautionary warnings. First, he has a reasonably good reading on what is happening with European banks (and our sources with inside connections have maintained for some time that […]
Read more...Perhaps I suffer from knowing a bit too much about the financial services industry in general and credit cards in particular due to my consulting work, but I’m amazed at the eagerness of investors to go bottom fishing there. Granted, card players like Discover weren’t making subprime loans, but with prospects for the economy at […]
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