By Satyajit Das, a risk consultant and author of Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives – Revised Edition (2010, FT-Prentice Hall). It Always Ends in the Same Way … No one, including the IMF, seriously believes that the austerity program announced by Greece will work. Argentina had debt […]
Read more...On Friday, I put up a short post alerting readers to a PR campaign apparently just getting off the runway to impress the average American of his moral obligation to honor his debts. The rise of strategic defaults (and perhaps even more important, the increasingly positive coverage it is getting in the media and the […]
Read more...By Satyajit Das, a risk consultant and author of Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives – Revised Edition (2010, FT-Prentice Hall). A year of wishful thinking … The period from March 2009 was the year of wishful thinking. Central banks cut interest rates and governments opened their cheque […]
Read more...The New York Times reports on an intriguing study: Columbia University assistant business professor, Stephan Meier…. found that borrowers with poor math skills were three times more likely than others to go into foreclosure. Mr. Meier conceded that the results were not shocking, but he said he had not expected the connection between math skills […]
Read more...A good Washington DC contact told me that a public relations/media push to demonize those who decide to walk away from mortgages they can still afford to pay (aka “strategic defaulters”) is underway. Expect to see a good bit of moral fervor as those who choose to cut their losses are attacked as immoral, irresponsible, […]
Read more...I know the headline above verges on “dog bites man” but the New York Times story, “In Louisville, View of Banks’ Role in the Everyday” is pure financial services industry PR masquerading as Norman Rockwellesque treacle. I know Fridays in the summer are usually slow news days, and the Grey Lady might occasionally have to […]
Read more...Bloomberg notes that Goldman’s president Gary Cohn has stated that the firm is not close to a settlement of the SEC’s fraud case against it for one of its Abacus CDOs. Note that this is contrary to rumor and speculation as recent as last week and suggests talks are pretty close to dead. The SEC […]
Read more...It is not a sign of intelligence to repeat a course of action and expect different results. Yet our officialdom is doing pretty much just that on the economic front. Treasury and the Fed in particular seem quite pleased with their success in patching up the financial system with duct tape and baling wire and […]
Read more...The latest shoe to drop on the Goldman front is the report on Wednesday that the SEC was investigating yet another one of its synthetic CDOs, this one a $2 billion confection called Hudson. It isn’t clear whether the SEC will file charges, but this one has the potential to be particularly damaging in the […]
Read more...From HousingWire: Of all of the foreclosures in the RealtyTrac online database, less than 50% have mortgages worth less than what is owed, said Rick Sharga, senior vice president at RealtyTrac, during a session at REO Expo, which concludes in Dallas Wednesday…. The overall unemployment rate dropped slightly to 9.7% in May, from 9.9% in […]
Read more...By Satyajit Das, a risk consultant and author of Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives – Revised Edition (2010, FT-Prentice Hall). Carmen M. Reinhart & Kenneth Rogoff (2009) This Time is Different: Eight Centuries of Financial Folly; Princeton University Press, London Raghuram G. Rajan (2010) Fault Lines: How […]
Read more...Bloomberg reports that the FCIC subpoenaed documents from Goldman: The U.S. panel investigating the causes of the financial crisis issued a subpoena to Goldman Sachs Group Inc. after the Wall Street firm failed to hand over documents in a “timely manner.” The Financial Crisis Inquiry Commission “has made it clear that it is committed to […]
Read more...As much as I have been a consistent critic of Geithner in his role as one of the chief enablers of the banking industry, he deserves credit for this succinct remarks at the G-20 via Bloomberg (hat tip reader Scott): In a sign of tension among the world’s economic policy chiefs, Geithner flagged concern that […]
Read more...I owe readers a longer comment on this, since we may be going into crisis mode (ah, the joys of waking up and toddling out to the computer to see what wheels are falling off the global financial system today). Your humble blogger may be a bit jaded (two years of watching the crisis and […]
Read more...I’ve seen some eye-poppin’, credulity-stretchin’ accounts in my time. The report “The Budgetary Impact and Subsidy Costs of the Federal Reserve’s Actions During the Financial Crisis,” just released by the Congressional Budget Office, ranks with the most extreme. It claims that the budgetary cost (which corresponds roughly to expected losses) of the Fed rescue facilities […]
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