In a post at the Telegraph, Ambrose Evans-Pritchard reviews the case for why the credit markets might be on the mend and finds it wanting. While some of his arguments are familiar, the part I found interesting was his belief (contrary to Wolfgang Munchau at the Financial Times’ piece “Pessimism about the eurozone is misplaced”) […]
Read more...As the housing/mortgage crisis has progressed, homeowner advocates and legislator have to get mortgage servicers to offer more loan modifications to struggling borrowers. Even though this housing recession has a far higher proportion of borrowers seriously underwater than past downturns, the logic of loss mitigation is still valid. It’s still better for the bank to […]
Read more...Despite the cheery tone in the press of late and the claims by quite a few senior banking executives that the credit crisis is on the mend, the money markets remain unconvinced. As we pointed out in a post yesterday, the results of the Fed’s latest Term Auction Facility auction were disappointing, leading the writer, […]
Read more...Human brain appears ‘hard-wired’ for hierarchy PhysOrg Green reaper’s grave new world Sydney Morning Herald Mortgage approvals slump nearly 50% to decade low Times Online Debt Collection Done From India Appeals to U.S. Agencies New York Times Sam’s Club, Costco Ration Rice Amid Hoarding Worries Wall Street Journal Dirty Economic Indicator of the Month Barry […]
Read more...Bloomberg reports that the rating agency Fitch predicts that recoveries on corporate bonds that default will be far lower than in previous downturns, due to the deterioration in lending standards. The estimate is grim; Rather than receiving the historical average recovery of 42 cents on the dollar in a default, owners of a third of […]
Read more...In a bit of synchronicity, two items, focusing on different aspects of our continuing credit woes, illustrate how the Fed is acting like the drunk looking under a streetlamp for his keys, because the light is good there, rather than where he lost them. The central bank’s version of this behavior is to continue to […]
Read more...Alliance: When two thieves have their hands so deeply plunged into each others’ pockets that they cannot separately plunder a third party. Ambrose Bierce, The Devil’s Dictionary The US and China bicker like an unhappily married couple, but Brad Setser warns us that the squabbling is getting nastier. And worse, both parties seem to fail […]
Read more...We’ve said before that the US is in the same position as Thailand and Indonesia circa 1996, except we have the reserve currency and nukes. Some prominent commentators are making more polite observations along these lines. An article, “A rising euro threatens US dominance” in the Financial Times, by Benn Steil, director of international economics […]
Read more...Regulators Back Away From Changes to Commodity Hedging New York Times. The CFTC held off on easing rules to help specualtors. Commodities and the Fed: answering the skeptics James Hamilton, Econbrowser Appeals court upholds search of laptop at LAX Daily Breeze U.S. to Insist That Travel Industry Get Fingerprints Washington Post. Airlines are supposed to […]
Read more...What a difference five weeks makes. Around the ides of March, we had the mind-focusing spectacle of the possible implosion of Bear Stearns, which was feared to take down a lot of the financial system. But Fed and JP Morgan to the rescue, Lehman presents earnings that depend entirely on accounting rather than business activity, […]
Read more...A good piece in the New York Times today, “Price Volatility Adds to Worry on U.S. Farms,” describes how the runup in agricultural crop prices is making life harder for farmers. The recent upswing, and the entry of speculative capital, has led to a sharp increase in volatility (note that that’s the reverse of what […]
Read more...The numbers keep getting bigger and bigger, first of bank losses, then of capital raises to try to get things back on a semblance of an even keel. Even so, the $24 billion (£12 billion) raise is nevertheless a stunner, hugely dilutive to existing shareholders. And note this comes in addition to a dividend cut […]
Read more...A MarketWatch story “Home prices aren’t tanking everywhere,” has the all the earmarks of being a National Association of Realtors plant. Note that it’s even told from the perspective of supposedly well-meaning (as opposed to commission-motivated) brokers trying to educate clients that the press is wrong, things really aren’t that bad. Here’s the gist of […]
Read more...Europe’s bear rally is over Financial Times Australia extends rights over sea BBC Deutsche Bank crackdown on expenses of elite financiers Times Online Rebuilding Loan Loss Reserves Hurts Bank Profits Dean Baker The Coming Tsunami of Equity Supply Michael Panzner Brain reacts to fairness as it does to money and chocolate EurekaAlert (hat tip Mark […]
Read more...A Washington Post article, “From DNA of Family, a Tool to Make Arrests,” points to the increasing efforts to look for partial matches in DNA databases that might implicate close relatives. This is a disturbing development, since DNA, like other forensic evidence, isn’t as foolproof as its image in the popular imagination indicates. There have […]
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