A year ago, I found Gillian Tett, then the Financial Times’ capital markets editor, to be the single most useful financial reporter by a considerable margin. She gave insights into areas that were important but badly neglected elsewhere, such as CDOs, credit default swaps, SIVs, all well before they entered the mainstream lexicon. She was […]
Read more...The ECB has uncovered gambling in Casablanca. The central bank is shocked to learn that banks appear to be originating crappy assets solely for the purpose of dumping them in a liquidity facility intended to help them through a rough patch, not to provide an ongoing subsidy. Regulators should know better. Indulgent parents generally wind […]
Read more...I’m sure readers know of other super turkeys, but Floyd Norris in the New York Times did find a prime example of crappy paper. Note that he limited himself to securities, so CDOs were not candidates for this Hall of Shame award. The Merrill deal was a pool of seconds (“piggybacks”). Moody’s noted that this […]
Read more...Global food prices fall in April BBC. A robin does not make a spring; this is the first decline in 15 months. But any reversion is good news. Taking your laptop into the US? Be sure to hide all your data first Guardian Recession Proof: Not Tax Preparation Services Bill Conerly Merrill Lynch, Morgan Stanley […]
Read more...Blackstone President Tony James said it may be premature to label the credit crisis over, although he did point to improving conditions in the market for LBO-related debt. However, one also has to wonder whether this call is to lower expectations for Blackstone’s performance, given the firm’s dreadful first quarter results. Oddly, Bloomberg reports the […]
Read more...Willem Buiter argues that the focus on oil and food price shocks, which economists view as relative price changes rather than inflation, is muddying the discussion about inflation. He sees considerable evidence of widespread inflation and it’s central bankers’ fault. From Buiter: Inflation is rising just about everywhere. Why is this and what can be […]
Read more...One of the reasons for Bank of America to walk from the Countrywide deal is the rising tide of legal costs and potential for sizeable damages. Admittedly, at this juncture the prevailing view is that the Charlotte bank would renegotiate the acquisition rather than abandon it (particularly since it should be able to limit liability […]
Read more...One of the views widely bandied about is that a weak dollar helps exports, which means primarily manufacturing. Narrowly speaking, thats’ true, but in some respects there is less there than meets the eye. One element we have mentioned is that there are limits near term to how much the US can gain, in terms […]
Read more...In keeping with Bernanke’s cautionary remarks about the unsettled state of the markets, some debt market participants worry that the recovery will prove short lived. While few are forecasting a return to the near paralysis of early in the year, the combination of continued caution among lenders and a deteriorating economy could make debt dearer […]
Read more...Vacation for less this summer MarketWatch. A sign of the times. Is Congress the Problem With Health Care? Ezra Klein, American Prospect Beijing reins in coverage of quake Financial Times Paulson Should Act to Stop Dollar Slump, Americans Say in Poll Bloomberg Collateral Foreclosure Damage for Condo Owners New York Times Köhler attacks markets ‘monster’ […]
Read more...Former Fed Chair Paul Volcker reiterated some of his concerns about the Fed’s recent moves and the evolution of the financial system in prepared remarks before the Joint Economic Committee of Congress. From the WSJEconomicsBlog: “Whatever claims might be made about the uniqueness of current circumstances, it seems inevitable that the nature of the Fed’s […]
Read more...There are some interesting cross currents in the day’s offerings on oil. What a difference a year makes. Not so long ago, the peak oil crowd was seen in much the same light as the discredited Club of Rome: worrywarts about a bad future that would probably take a long time to arrive. Now everyone […]
Read more...Reader AK sent me a bit of Christmas in May: three hot-off-the presses reports, one from Morgan Stanley on the credit standing of US and European broker dealers, a Moody’s report on RMBS, and a UBS report on the subprime crisis. The Morgan Stanley report, although the shortest, was in some ways the most informative, […]
Read more...I am leery of featuring one writer too often in succession (Martin Wolf is a notworthy exception). However, Ambrose Evans-Pritchard presents a thesis that I thought would lead to some informative reader comments. In “The crisis rotates from America to Europe, and Asia,” Evans-Prichard argues that many of the world’s other large economies will start […]
Read more...Jim Hamilton must feel like a Cassandra. Last August, he warned that the GSEs were in danger of having the ambiguous status of their implied guarantee tested. That came in January, and was finessed with various new Fed facilities. Hamilton has also warned repeatedly that the Fed needs to consider institutional reform, not merely bailing […]
Read more...