In an interesting bit of reporting disparity, news of planned EU legislation on bank pay is a top story on the front page of the Financial Times, yet is buried in the Wall Street Journal and didn’t make the cut at the New York Times. Admittedly, that is no doubt in part due to that […]
Read more...The New York Times has unearthed a damning tidbit about the bailout of AIG: When the government began rescuing it from collapse in the fall of 2008 with what has become a $182 billion lifeline, A.I.G. was required to forfeit its right to sue several banks — including Goldman, Société Générale, Deutsche Bank and Merrill […]
Read more...We’ve warned for some time that the eurozone’s sure-to-fail muddle-through approach to its structural challenges was rattling investor confidence. Worse, its insistence on wearing an austerity hairshirt was not only committing Europe to deflation, but had high odds of sucking the global economy down along with it. Given how fragile the recovery is in advanced […]
Read more...This Sydney Morning Herald story (hat tip reader Gordon) highlights a Bank of England report that not only points out the magnitude of the financing needs of major banks over the next few years, a daunting $5 trillion, but also indicates that US and European bank refinancings are falling short of their rollover calendar. This […]
Read more...So it looks to be semi-official. The “stress test” label, in Europe as in the US, signifies an exercise that is designed to produce attractive report cards, as opposed to provide a valid measure of the sturdiness of a bank’s balance sheet in difficult conditions. So what is the biggest concern investors and counterparties have […]
Read more...By Richard Smith, a London-based capital markets IT consultant In my last post, “Tracking the Rabbit through the Anaconda” , I mocked Geithner a bit and promised you all a spot of moaning about what’s missing from the financial reform bill. Well, the anaconda has now had the time it needed to produce its offering. […]
Read more...A reader with considerable experience in real estate who has asked to remain anonymous pointed to an article in Housing Wire describing some possible unintended consequences of the Administration’s push for more short sales: This past week, I received an email from one of my dearest friends that has really stuck with me. It illuminates […]
Read more...While the headline focuses on her outlook for housing, Whitney is bearish across the board, seeing little reason to cheer on the employment and bank earnings fronts. She sees a 10% fall in housing prices in the next six months (!), which will hit bank earnings (Whitney has argued since at least early 2009 that […]
Read more...We noted a bit more than a week ago that we expect the European banks stress tests to backfire. The US version was a successful con game because the officialdom provided adequate disclosure about the process and stayed firmly on message, the banks were allowed to “manufacture” as analyst Meredith Whitney put it, impressive earnings, […]
Read more...This blog warned a few weeks ago of a coming campaign by the officialdom against so-called “strategic defaulters”. It has arrived even sooner than we expected. We warned that this development was the inevitable result of financial firms, taking an increasingly predatory posture toward their customers. Borrowers are responding in kind, by taking a cold-blooded […]
Read more...The first section of this post is by Warren Mosler, the President of Valance Co. who writes for New Deal 2.0 Deficit doves are doing more harm than the hawks — here’s what they need to know. The deficit hawks are prevailing. The economy remains an economic and social disaster. Medicare has already been cut […]
Read more...I want the word “reform” back. Between health care “reform” and financial services “reform,” Obama, his operatives, and media cheerleaders are trying to depict both initiatives as being far more salutary and far-reaching than they are. This abuse of language is yet another case of the Obama Adminsitration using branding to cover up substantive shortcomings. […]
Read more...By Tom Adams, an attorney and former monoline executive When the financial crisis hit, I was in the direct line of fire. My company blew up very early in the crisis, giving me the dubious opportunity to see how bad things were going to get long before most of the rest of the world, including […]
Read more...In a weak nod to “too big to fail” concerns, House Financial Services Committee chairman Barney Frank announced that larger banks and hedge funds would pay a fee as a way of pre-funding resolution costs. From the Financial Times: The proposed levy emerged as an unwelcome surprise for the industry deep into a late-evening congressional […]
Read more...By Mike Konczal, a former financial engineer and fellow with the Roosevelt Institute who writes at New Deal 2.0 A year ago a week from today I discussed the financial innovation that wasn’t. It was a look at Lewis Ranieri, the creator of the mortgage backed security, as well as one of the minds behind […]
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