As Gillian Tett points out in the Financial Times today, clearing derivatives centrally has come to be viewed in policy circles as a magical solution. As a result, it has not gotten the scrutiny it deserves. The reason for the enthusiasm is that, in theory, a clearinghouse would make sure all agreements were adequately backstopped, […]
Read more...By Richard Alford, a former economist at the New York Fed. Since them, he has worked in the financial industry as a trading floor economist and strategist on both the sell side and the buy side. A number of economists, economic policymakers, regulators, and central bankers have attempted to explain away their failure to both […]
Read more...The efforts to try to burnish the image of bankers have gone from being unconvincing to ridiculous. I am certain we will see Jon Stewart comment on the latest twist, of trying to claim that God wants banks (and therefore bankers) to make a lot of money. Since Calvinism is the de facto religion of […]
Read more...OK, I have heard all the explanations, spreads are wider because there are fewer market makers, asset prices are rallying (market making firms are structurally long; it’s difficult and costly to go net short on that big a balance sheet), Goldman is currently the trading kingpin. But I still find these factoids remarkable: Goldman lost […]
Read more...Submitted by Edward Harrison of Credit Writedowns I am posting this in the interest of widening the discussion at Naked Capitalism to include some topics in Europe. Fitch, the credit rating agency, has just downgraded the sovereign debt ratings for the Republic of Ireland from AA+ to AA-. That is two notches and is proof-positive […]
Read more...By George Washington of Washington’s Blog Many people – including former analyst for the U.S. Treasury Richard Cook – argue that credit is too important a function to be left to the private banks. Indeed, even after taxpayers have given trillions in bailouts, backstops, guarantees, and other gifts, the giant banks are still not lending […]
Read more...Eliot Spitzer explains how the White House defense of the status quo will give Republicans powerful ammunition in the 2010 elections. Few things are as potent in politics as calling for change at a moment of fundamental dissatisfaction with the status quo. Nobody should know this better than the current White House. Gauzy words describing […]
Read more...The Treasury invited a small group of bloggers for a “discussion” with senior officials on Monday. Initially, the meeting was to be background, which is a sort of journalistic “FYI but you can’t use it” but we were told at the meeting that we could discuss the meeting as long as remarks were not attributed […]
Read more...One week ago, I put up a post on the plight of a family that was at the end of its rope financially due to a lack of savings prior to the firing of the main income provider at the start of 2009. They had started using credit cards to pay for necessities, had paid […]
Read more...McClatchy, the only major US news organization to question the Iraq war until is was obvious to all that it was a misguided exercise in neocon hubris, has started a series on Goldman’s famed “short subprime” exercise. While the timing and overall outline are not new (as to when and allegedly why the investment bank […]
Read more...By George Washington of Washington’s Blog. Preface: Please read to the end to see the humorous quote. I have previously debunked numerous false arguments used to defend the too big to fails. See this and this. But the apologists for the TBTFs are now arguing that breaking up the beached whales … er, giant banks […]
Read more...Harper’s Magazine has written up the lengths to which the authorities will go in censoring views that dissent with what is the unstated official policy: that no demand of the banking industry is too unreasonable not to be catered to. The object lesson is the gutting of the falsely-branded derivatives reform bill. It arrived with […]
Read more...By George Washington of Washington’s Blog. When a liberal labor leader and a conservative financial policy analyst unite against something, you know that something is really bad (actually, I don’t believe in the whole false left-right dichotomy; I think its Americans versus those trying to steal our wallets and our rights, but that’s another story). […]
Read more...By George Washington of Washington’s Blog. On September 25th, I wrote: Paul Volcker and senior Harvard economist Jeffrey Miron both testified to Congress this week that the government is trying to make bailouts for the giant banks permanent. Writing Wednesday in The Hill, Congressman Brad Sherman pointed out that : In my opinion, Geithner’s proposal […]
Read more...We’ve been waiting for vigilante justice to start against those who profited from the financial crisis, but it should have occurred to us that it would be the foot soldiers, not the kingpins, who’d be the prime targets. From Reuters (hat tip reader John D): As Los Angeles housing advocates launched a campaign warning of […]
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