As readers probably know all too well, we are in the middle of another period of eroding confidence, frazzled nerves, and risk aversion. Equities have taken a tumble, with losses on the S&P today flirting with 4% after a 4.5% fall last week. Bloomberg reports that traders are increasingly looking to buy longer term downside […]
Read more...Australians Urged to Flee as Gales Threaten New Fire Disaster Bloomberg HSBC to scale back US lending Financial Times. Another bank cutting offshore lending. And Do I Hear 2 Million for That Condo? No? 1 Million? Sold! New York Times (hat tip reader Betsy). Residential real estate is sold pretty much solely by auction in […]
Read more...Analysts, regulators, and politicians are beginning to recognize that most if not all of the widely touted benefits of modern finance redounded only to its purveyors. The decidedly retro Canadian banking system, with simple products, high equity requirements, and relatively modest securities operations that focus on domestic customers, is the soundest in the world. As […]
Read more...A very good comment by former Treasury Secretary James Baker in the Financial Times, “How Washington can prevent ‘zombie banks’,” warns that the US is on its way to repeating the Japanese error of propping up dud banks and creating a moribund economy as a result. His program has the merit of being simple (at […]
Read more...Let’s see, the credit default swaps market, due to some netting, is now somewhere north of $30 trillion (as opposed to its earlier “north of $60 trillion” level). Investment banks were believed to have hedged most of their exposure via offsetting contracts, but AIG wrote naked protection. And as jAIG itself is at risk of […]
Read more...‘Ark’ races to rescue jungle frogs Christian Science Monitor Warren Buffett on the Black-Scholes Formula Alea. Buffet claims that Black Scholes is overstating the cost of long-dated put options, He disagrees with the use of historical volatility and asserts that the formula gives “absurd results” when applied to long-dated option. As I understand it, the […]
Read more...In the dot-bomb era, you’d read the occasional story about how former Internet high-flier employees were working at Home Depot. I am not certain what happened to those in Wall Street who lost their jobs in the 1990-1991 downturn. I know some got jobs with big corporations, a few went to DC. However, the carnage […]
Read more...I was in Kansas City at a econbloggers conference hosted by the Kauffman Foundation, and one of the breakout discussions was on the fate of finance. One participant who claimed to be have a basis for his view (it could be based on private polling or focus group research, or less scientific methods) said that […]
Read more...Still in Kansas City, had great fun and got to hang out with fellow bloggers, snow here tomorrow, so may have transit hassles, but hope to be back to a more normal schedule by tomorrow evening. Key Metric: The F/R Ratio Josh Marshall, TPM Cafe (hat tip reader Scott) The Model That’s Killing Pension Funds? […]
Read more...Funny how a deal that is giving Citi a premium on its common shares that one typically sees in an M&A transaction (ie, the target is sought after) in the course of a salvage operation is being . Similarly, the bank is being asked to have its board members that are insiders resign those seats. […]
Read more...Rare cheetah captured on camera BBC The “Worst Food Product Ever” May Have Been Found [Awesome] Consumerist And Yet, Still Rules Their World Digby (hat tip reader Doug) A few words from a reader on TALF mechanics Ed Harrison Lonely Geithner Felix Salmon Moody’s predicts default rate will exceed peaks hit in Great Depression Telegraph. […]
Read more...Apologies for the terse posts tonight; out of town, will be lighter than usual today and tomorrow. The Financial Times has been keeping tabs on the results, or perhaps more accurately, the lack thereof, of collateralized debt obligations. A couple of weeks ago, it highlighted research by Morgan Stanley and Wachovia that concluded that nearly […]
Read more...Posts will be thin Thursday and Friday (on the road, then at an econbloggers conference hosted by the Kauffman Foundation), so I am giving you extra goodies to keep you busy in the meantime. Do chat among yourselves. No food fights, however. Tiger attacks trigger expert plea BBC Designer Babies – Like It Or Not, […]
Read more...I wish I had the time to analyze this deal, but my travel schedule is cutting into blogging time, In addition, I don’t have a feel for whether the units mentioned in this article are merely suffering in accord with the crappy financial environment, or may have suffered additional, perhaps lasting damage. Two observations: First, […]
Read more...Note the wording Goldman used in describing the implications of the decline in income tax revenues in China, via Bloomberg (hat tip reader MIchael): “Tax data show much sharper deceleration in income and consumption in the past few months than suggested by official retail sales or income growth figures,” Goldman Sachs analysts Joshua Lu, Caroline […]
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