Links 6/11/06

California nears financial ”meltdown” as revs tumble (Can you say “Bankruptcy or Obama?”)
Countrywide Exec Warned The Fed On Toxic Mortgages Tom Lindmark (Apparently, the head of risk at CFC was ignored not only by senior management but by the Fed too. This is Bernanke’s Fed we’re talking about, not Greenspan’s.)

St. Regis resort in Dana Point faces foreclosure sale Los Angeles Times (This is a 5-star mega resort now going toward foreclosure. The leisure sector is getting killed.), Nouriel Roubini – Latvia’s currency crisis is a rerun of Argentina’s (Stop stealing my thunder. The Argentina meme is mine! Seriously, though, Roubini’s editiorial is a must read for anyone who thinks systemic risk is completely gone.)
Beige book: Few signs of economic recovery Izabella Kaminski, FT Alphaville
Antidote du Jour (I love this picture!):

psst…Antidote du Jour 2:

Brainy Echidna Proves Looks Aren’t Everything – NY Times

Yves here. Thanks Ed! Some additions and reader contributions:

Watch Your Back Nature (hat tip Michael T)

US government securities seized from Japanese nationals, not clear whether real or fake Asia Times (hat tip Steve L). The amount at issue is impressive.

The Great Debt Scare: Why Has It Returned? Robert Reich

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About Edward Harrison

I am a banking and finance specialist at the economic consultancy Global Macro Advisors. Previously, I worked at Deutsche Bank, Bain, the Corporate Executive Board and Yahoo. I have a BA in Economics from Dartmouth College and an MBA in Finance from Columbia University. As to ideology, I would call myself a libertarian realist - believer in the primacy of markets over a statist approach. However, I am no ideologue who believes that markets can solve all problems. Having lived in a lot of different places, I tend to take a global approach to economics and politics. I started my career as a diplomat in the foreign service and speak German, Dutch, Swedish, Spanish and French as well as English and can read a number of other European languages. I enjoy a good debate on these issues and I hope you enjoy my blogs. Please do sign up for the Email and RSS feeds on my blog pages. Cheers. Edward


  1. skippy

    Re: Countrywide Exec Warned The Fed On Toxic Mortgages link: Bernanke said home finance innovation did carry risk but provided significant net benefits.

    skippy, total double speak, benefits sure, but to whom and at what cost to the over all financial sector/economy.

    “Borrowers have more choices and greater access to credit; lenders and investors are better able to measure and manage risk; and, because of the dispersion of financial risks to those more willing and able to bear them, the economy and the financial system are more resilient,” Bernanke said, according to a transcript of his speech

    skippy…Which is Bernanke real strength, economics or salesmanship and who else besides me is over this idea that all Americans understand lending law and the finer points of finance in general. Hell most people don't even have a clue to the total pay out cost over the life of the loan.

    Also I for one would like all party's coming before us to bring some form of material to back up their claims, rather than I'll get back to you later, after we have time to bodge up some garbage.

    I can not think of any logical or rational reasoning behind any of this lending frenzy fiasco. The 2%soultion, trapping credit card holders and god awful home loans just can not be explained any other way than criminal.

  2. wintermute

    Re: How Trillion Dollar Deficits Were Created

    From Bloomberg: "The budget deficit is projected to increase to $1.85 trillion in the year ending Sept. 30, equivalent to 13 percent of the nation’s economy, according to the nonpartisan Congressional Budget Office."

    Why do they not understand that a deficit 13% of GDP is in reality more like 20%. This is because real GDP has collapsed when the effects of MEW, HELOC and securitization (ergo – loose lending standards)are removed. GDP figures are artificially high – which means the new trillion dollar deficits are a far greater percentage than first apparent.

  3. Thomas

    The link to the St.Regis foreclosure article appears to be broken, only goes to LA Times main page.

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