Guest Post: Will Tokyo Be Evacuated Due to Fukushima Radiation?
Hopefully it will never come to this …
Read more...Yearly Archives: 2011
German banks need 127 billion euros more capital: report
Cross-posted from Credit Writedowns This past weekend the German-language newspaper Frankfurter Allgemeine Zeitung (FAZ) wrote an article centered on a report by the Deutsche Institut für Wirtschaftsforschung (German Institute for Economic Research). The report claimed that the German banking system was undercapitalised by 127 billion euros. Reuters reported on this briefly but I have yet […]
Read more...Links 9/19/11
Income Inequality Produces Indebtedness and Global Imbalances
The IMF has a passel of articles up on income inequality. “Unequal = Indebted,” by Michael Kumhof and Romain Rancière, focused on macroeconomic effects.
It stars with the observation that countries showing a significant increase of income inequality (defined as the share going to the top 5%) have deteriorating current accounts (note these are all advanced economies; they discuss the glaring exception of China later in the article).
Read more...Richard Alford: The (Re)Education of Ben Bernanke and the FOMC
By Richard Alford, a former New York Fed economist. Since then, he has worked in the financial industry as a trading floor economist and strategist on both the sell side and the buy side.
When you compare Bernanke’s “Deflation: Making Sure It Doesn’t Happen Here” speech of 2002 with his recent Jackson Hole speech, you cannot help but notice changes in his view of the economy and the financial system as well as a significant decline in his confidence in the ability of monetary policy to insure full employment,. The changes between the speeches and the possible explanations for the changes have implication for the course of Fed policy in the near and medium terms as well as the long-run health of the US economy. They suggest that the FOMC sees less upside to further stimulative policy actions and at the same time sees possible downsides where it had not seen them before. This, in turn, suggests that the FOMC will be more tentative in adopting further nonconventional stimulative measures than past behavior would indicate.
Read more...Bank of New York: A Train Wreck Waiting to Happen?
Many readers no doubt know that the so-called $8.5 billion Bank of America mortgage settlement, which was between the Charlotte bank and the Bank of New York as trustee for 530 residential mortgage securitizations, had run into some very serious headwinds. The deal had to be approved in a so-called Section 77 hearing; a number of interested parties, including some investors, the attorneys general of New York and Delaware, and the FDIC, raised questions and objections to the deal, as well as to the use of a Section 77 hearing (which sets a very high bar for opposing an agreement). Although this saga has a quite a few more rounds to go, it looks likely that any settlement will be considerably delayed and will wind up costing Bank of America a good bit more than $8.5 billion.
What has gotten less attention is the implication of the probable derailment of this deal for the Bank of New York, and its vulnerability to mortgage litigation.
Read more...Links 9/18/11
Are Private Investigators Being Used to Intimidate New York Attorney General Schneiderman’s Staff?
The New York Post has a salacious story about Alisha Smith, a lawyer with the New York attorney general’s office, who is a dominatrix in her private life. Frankly, many of the skills honed by being a domme probably come in handy in litigation (such as knowing exactly how much pain and humiliation to administer when).
The problem isn’t with her having a kinky private life per se; it is the allegation by the Post that she may have gotten paid for performing at S&M parties.
Read more...Satyajit Das: The Financial Compass
By Satyajit Das, the author of Extreme Money: The Masters of the Universe and the Cult of Risk
Roddy Boyd (2011) Fatal Risk: A Cautionary Tale of AIG’s Corporate Suicide; John Wiley & Sons Inc, New Jersey
Justin Cartwright (2010) Other People’s Money; Bloomsbury, London
Nicholas Dunbar (2011) The Devil’s Derivatives: The Untold Story of the Slick Traders and Hapless Regulators Who Almost Blew Up Wall Street…And Are Ready To Do It Again; Harvard Business Press, Boston, Massachusetts
Barry Eichengreen (2011) Exorbitant Privilege: The Rise and Fall of the Dollar; Oxford University Press, Oxford
Diana B. Henriques (2011) The Wizard of Lies: Bernie Madoff and the Death of Trust; Times Books/ Henry Holt & Company & Scribe Publications, Melbourne
Graeme Maxton (2011) The End of Progress: How Modern Economics Has Failed Us; John Wiley, Singapore
In his novel, Justin Cartwright writes that: “There are beginning and there are ends, and there are also many ways of telling the same story.” The problem is that the great 2007 financial crisis shows no signs of ending. Far from ending, the crisis has shown a virus’ capacity to reconstitute itself. Given the literary difficulty of an uncertain end, publishers and editors have improvised in telling the story – a multiple points of the compass approach to “credit lit”.
Links 9/17/11
Sanity Check: “Revolt Over Risks of Elite Class of Bankers”
The Financial Times’ John Gapper makes some remarks in his latest comment at the Financial Times, “Revolt Over Risks of Elite Class of Bankers,” that I found surprising:
Read more...Nurses Hold Actions Across Country Demanding Wall Street Transaction Tax
I find it intriguing that the fact that nurses have staged protests against Wall Street has gotten pretty much no coverage in the mainstream media. I checked nurses + protest on Google News, and the only note take of their September 1 protest was a story in the Boston Herald and MarketWatch (but the latter merely published their press releases).
Read more...More on the European Bank Bailout
Cross-posted from Credit Writedowns Overnight, a group of us were exchanging e-mails on the recent coordinated central bank action to provide European banks the funding being denied them by the markets. I haven’t been active on the e-mail chain, but I did find some of the commentary interesting. I had a few comments of note […]
Read more...Matt Stoller: Authorized Losses – The Lehman Lesson UBS’s Rogue Trader Missed
By Matt Stoller, the former Senior Policy Advisor to Rep. Alan Grayson and a fellow at the Roosevelt Institute. You can reach him at stoller (at) gmail.com or follow him on Twitter at @matthewstoller
I read this headline in Bloomberg: UBS Has $2B Loss; Man Arrested in London. Apparently, a rogue trader lost $2 billion, and is now sitting in jail because the trade was unauthorized by senior management. Since it’s the 3rd anniversary of the Lehman Brothers bankruptcy, I figure it’s a good time to be nostalgic about who is authorized to lose what.
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