A short piece in the Financial Times suggests that imbalances in the credit default swaps market are likely to continue, and those problems redound to the cash bond markets, distorting the prices at which companies can raise funds. Admittedly, due to reduced anxiety in the funding markets, credit default swaps prices have generally improved. However, […]
Read more...Still out of town, still behind the eight ball, so forgive the terseness with today’s offerings. Two items provide further evidence that lenders not only have little sense of responsibility for the problem they helped create, but worse, their unwillingness to reform in the face of considerable public pressure. As we noted, with regulators capitulating […]
Read more...Criminals try to ‘copyright’ malware PhysOrg Next decade ‘may see no warming’ BBC Nuclear’s CO2 cost ‘will climb’ BBC Where Are They? Why I hope the search for extraterrestrial life finds nothing MIT Technology Review Pricing power: signal versus noise Tim Price McCain’s Health Care Plan: Why It’s Another Dumb Idea Robert Reich Republicans Plan […]
Read more...When the Fed’s innovation, the Term Auction Facility, which is in effect an improved discount window, was implemented last December, its size was $40 billion, which was considered extraordinary, a sign of how desperation conditions in the money markets were. Now that several increased put the facility is $100 billion, the banking community and the […]
Read more...Last year, we were less than impressed with Bush’s tightly bounded but widely touted plan to use the FHA, a traditional source of financing to low and middle income borrowers, to help salvage homeowners at risk of begin dispossessed. Note we have doubts about “rescue debtor” operations. Iin many cases, these borrowers had little to […]
Read more...In a bit of synchronicity, food worries are getting prominent billing tonight in the media. The Financial Times” Martin Wolf sketches out some dimensions of snowballing agricultural problems and possible solutions. Wolf’s piece endeavors to cover a lot of ground, which means of necessity it gives short shrift to depth. It touches on the central […]
Read more...Dear readers, I will give more measured impressions of the Milken Conference in a day or so, when I it is over (we have another day, but the last day is far thinner in terms of offerings) and have had a day or so to reflect. However, to give a highlight, a subtext was was […]
Read more...Thanks for your patience. Still in LA at the Milken Conference (I feel like I have been parachuted into a Pasadena Republican/Chicago School of Economics parallel universe, although I have managed to find some fellow apostates. If I spent enough time here, I might be brainwashed (social assent is very powerful). Thus I hope you […]
Read more...Barclays estimates that half the 2006 and 2007 subprime loans are in or close to negative equity status, which means this roughly $800 billion of mortgages is at greater risk of default. Note that their analysis used OFHEO data; Case-Shiller estimates of the fall in housing prices exceed those of OFHEO, which means this forecast […]
Read more...By happenstance, there is more than usual Fed-related news this early AM. A few weeks ago, Greg Ip of the Wall Street journal recited what some of the Fed’s options would be if it ran into balance sheet constraints. One was paying interest on bank reserves: The Fed could seek to pay interest on reserves. […]
Read more...Greg Ip of the Wall Street Journal reports on the harsh criticism of the Fed’s role in the Bear deal by Vincent Reinhart, who rcently was the Fed’s most senior staff member. What is ironic about the Fed’s bailout is that it is unpopular on the left and the right. The left does not like […]
Read more...The Financial Times reports that mutual funds got off to a very bad start this year, with 24 of the 25 biggest managers seeing a decline in funds. Note first that the article is not discussing individual funds (e.g. Magellean) but fund families (e.g. Fidelity). Note second that the fall isn’t simply the result of […]
Read more...Larry Summers, in “America needs to make a new case for trade,” worries, as do many others, about rising protectionist sentiments: In a world where Americans can legitimately doubt whether the success of the global economy is good for them, it will be In a world where Americans can legitimately doubt whether the success of […]
Read more...The New York Times, in “Loan Industry Fighting Rules on Mortgages,” tells us that the real estate creditors are fighting tooth and nail to gut new rules that the Fed intends to impose. The Times, apparently reflecting the sentiment of sources in the Fed, Capitol Hill, and consumer advocates, seems surprised at the vehemence of […]
Read more...Reader Benjamin sent me this query, and I thought I’d be so bold as to hazard an answer, and anticipate that others will have valuable perspective to contribute: I read NC on a regular basis, and would like to see some macro advice for your younger readers, like myself. If I’m parsing commentary correctly, I […]
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