The line of thinking that underlies an investigation by New York attorney general Andrew Cuomo is a challenge to conventional wisdom about the financial crisis. The prevailing view is that since credit ratings were one of the single biggest points of failure in the crisis, the ratings agencies were one of the biggest, if not […]
Read more...The collateralized debt obligation probe widens. From the Wall Street Journal: The banks under early-stage criminal scrutiny—J.P. Morgan Chase & Co., Citigroup Inc., Deutsche Bank AG and UBS AG—have also received civil subpoenas from the Securities and Exchange Commission as part of a sweeping investigation of banks’ selling and trading of mortgage-related deals, the person […]
Read more...Frank Partnoy, derivatives salesman turned law professor, took an ill fated star turn in the Financial Times today. In a comment titled, “Goldman is wrong target for official censure,” he writes (among other things): “Goldman is not to blame for the financial crisis,” a straw man if I ever saw one. I hate to say […]
Read more...The Wall Street Journal reports that Morgan Stanley is under investigation for allegedly creating CDOs it used to wager against clients: Among the deals that have been scrutinized are two named after U.S. Presidents James Buchanan and Andrew Jackson, a person familiar with the matter says. Morgan Stanley helped design the deals and bet against […]
Read more...The first part of this two part series proved to be very popular among blog readers, given the level of comments, so I thought I’d feature the second part, which was posted by Real News Networks on Monday. Enjoy!
Read more...The EU announced a €750 billion salvage operation, funds to shore up economies in economic difficulty, with the program consisting of €440 billion of loans from eurozone nations, €60 billion from an EU emergency fund, and €250 billion from the IMF. There are several layers of complicating factors, however. The first is that the German […]
Read more...By John Ryskamp, an attorney and author of The Eminent Domain Revolt One must work to get behind the import of an enabling act, because such an act is invariably, and intentionally, short and vague. It intends to grant much, and to tell little. This is certainly true of the three acts compared here: the […]
Read more...By Richard Smith, a London-based capital markets IT specialist Here’s someone with his head screwed on, back in April 2007, who proves singlehandedly that “hoocoodanode” was no defense for failing to anticipate the implosion of the shadow banking system (more on this prescient analyst in due course): For several years now, we have marvelled at […]
Read more...The defenders of the economic orthodoxy have gotten much more shrill of late. In a perverse way, this is probably a positive sign: they might be feeling a tad worried that they are starting to lose their hold over consensus reality. But given how quick various media outlets are to pick up and amplify their […]
Read more...The only moderate reduction in market havoc on Friday has all eyes on the European officialdom. Will they mount a credible enough plan over the weekend to buy them a bit of breathing room so they can come up a better salvage operation for the euro experiment? The odds are against both steps in the […]
Read more...We’ll know in due course, now that an investigation is underway, why the equity markets in the US went into complete freefall for about twenty minutes, with the Dow dropping 998 points. Per Bloomberg: Larry Leibowitz, chief operating officer of NYSE Euronext, said trades sent to electronic networks fueled the drop. While the first half […]
Read more...It most certainly is ugly out there. Yesterday, CDS spreads gapped out on all sovereign risk trades, with dealers reporting that there was big protection buying any time spreads eased All risk aversion trades are back. The euro continues to fall versus the dollar, dropping from 130 to 125 in a mere 24 hours. The […]
Read more...This is a full length show with three other guests, with the topic actually being “who was to blame for the crisis, Washington or Wall Street?” I must confess, I didn’t use the obvious line: for the financial service industry’s backers to complain that lack of regulation caused the crisis is like someone who has […]
Read more...I’m not certain what to make of an article at the New York Times this evening, “Senate Liberals Move to Toughen Bill Regulating Wall Street.” Liberals? That is a word that has almost disappeared from polite conversation. “Liberal” is a term used by those of the conservative persuasion to discredit anyone to the left of […]
Read more...Investors continued their flight from risky assets as the wobbling Greek rescue looked ready to morph into a broader sovereign debt crisis, compounded by fears that a China’s expansion, once seen as inevitable and enduring, is now looking at risk of fading as the officialdom tries to dampen inflation. But the focus on the Greece […]
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