There are times I think I am hopelessly naive. For three years in the early 1990s, I had a cutting-edge Chicago-based derivatives firm, O’Connor & Associates, as a client. They had 750 employees and no customers, at least initially, which gives you an idea of the scale of their business. O’Connor did statistical arbitrage, which […]
Read more...Dear readers, I am traveling from Budapest to NYC today, which meant by the time I am operational I will probably be sufficiently travel-addled so as not to be much use on the blogging front. Barring mishap, I expect to be back to a semblance of normalcy Monday. Thanks for your patience.
Read more...Moody’s Joins S.& P. in Warning on California Debt DealBook. Always late to the party. The Plaza Stirs NY Times. "Few developments rode the wave of high prices in the Manhattan residential real estate the way the 181 condominium apartments at the Plaza Hotel did, and few have chilled as much in the downturn" China […]
Read more...Andy Xie, writing for Cajing, questions the durability of China’s recovery. He argues that much of hte upsurge in lending, which was one of the developments that cheered commentators, is fueling asset speculation, in this case in commodities, Reports this spring has suggested that as much as a third of the new lending was going […]
Read more...Submitted by Knute Knutson: As I imagine many of your are, I’m an avid reader of Gillian Tett’s Financial Times columns, I therefore purchased her recent book, Fool’s Gold: How the Bold Dream of a Small Tribe at J.P. Morgan Was Corrupted by Wall Street Greed and Unleashed a Catastrophe, shortly after its release. Ms. […]
Read more...Submitted by Leo Kolivakis, publisher of Pension Pulse. Steven Pearlstein writes in the Washington Post, Regulatory Reform That Falls Far Short of It: What does it tell you when banks, investment houses, insurance companies and derivatives traders are so pleased with their regulators that they are prepared to pull out all the stops to keep […]
Read more...Submitted by Edward Harrison of Credit Writedowns. So, things are looking a lot brighter we are told by most economists and policy makers. The crisis is over and the banking system is on the mend. Now is the time for true reform and for bankers to get back to business as usual. While the foregoing […]
Read more...What amounted to a statement of principles and a very few stakes in the ground from Timothy Geithner on financial reform got a largely hostile reaction from Congress (see Ed Harrison here and here for further detail). The main criticism was that the notion of making the Fed the uber stability regulator/financial system overseer (officially, […]
Read more...Submitted by Leo Kolivakis, publisher of Pension Pulse. Speaking to a parliamentary committee Thursday morning, Nortel Networks Corp. chief executive Mike Zafirovski defended the decision to pay court-approved bonuses to “key” executives and employees while it denied severance payments to workers the insolvent company let go. You can read Mr. Zafirovski’s official transcript by clicking […]
Read more...We’ve written off and on since late last year that the continuing cutbacks in credit cards would hurt small businesses, which have been the biggest source of job creation in the US for quite a stretch. The importance of credit cards as a source of funding to small companies has gone largely unnoticed in the […]
Read more...When it comes to global banks, size matters Gillian Tett Too Big To Fail, Politically Simon Johnson. Every reform-minded economist hates the Obama white paper. Bankers seems pretty happy, though. Volcker: Sure, don’t regulate the hedge funds much. But don’t let them mooch off the safety net, either. Robert Johnson Roubini: New Regulations "Go in […]
Read more...Submitted by Leo Kolivakis, publisher of Pension Pulse. President Barack Obama wants to strengthen the government’s authority over financial institutions in a sweeping attempt to modernize a regulatory latticework that failed to detect early signs of a worldwide crisis: The president was to detail the administration’s overhaul plan on Wednesday, recommending new powers for the […]
Read more...Goldman’s Blankfein issues apology as bank prepares to repay $10bn Telegraph King calls for banks to be ‘cut down to size’ Guardian "An Interview with Paul Samuelson" Economist’s View In reform, more of the same Marshall Auerback. This line sums up his view about Obama’s reforms: "As with so much of the Obama administration, great-sounding […]
Read more...Submitted by Edward Harrison of Credit Writedowns. If you listen to the criticism from the right and from the left, from pro-regulation and anti-regulation pundits, you can understand the political constraints which produced the white paper which the President unveiled yesterday. Given those constraints, I consider the white paper a good effort. My initial reaction, […]
Read more...Submitted by Edward Harrison of Credit Writedowns. Having read through the draft of President Obama’s financial regulatory proposal, my initial reaction is largely positive. He sets the right tone and says all of the right things. However, the devil is in the details and we will need to see how these firm up as these […]
Read more...