Edmund L. Andrews in the New York Times today depicts Federal Reserve chairman Ben Bernanke as badly treated by his critics. The article verges on hagiography: As central bankers and economists from around the world gather on Thursday for the Fed’s annual retreat in Jackson Hole, Wyo., most are likely to welcome Mr. Bernanke as […]
Read more...Grr. It was so obvious and it never occurred to me…:”When in doubt, bail it out.” I am jealous. Kenneth Rogoff, who among other things has (with Carmen Reinhart) has created a large dataset on financial crises through history, today takes on the exceedingly permissive posture the US has adopted to the banking industry, simply […]
Read more...Readers may know that William Black, who teaches economics and law at the University of Missouri, Kansas City, has been a vociferous critic of US policy on the financial crisis. In this lecture, he not only revisits one of his favorite topics, fraud, but also examines a wealth transfer from the middle classes to the […]
Read more...Reuters reports that a number of credit card issuers reported modest improvement in their chargeoff rates for July. While any improvement is good news, it is way too early to break out the champagne. First, some of the improvement may be related to tax refunds being used to pay down debt, a strictly seasonal affair. […]
Read more...I don’t believe in market calls, and trying to time turns is a perilous game. But most savvy people I know have been skeptical of this rally, beyond the initial strong bounce off the bottom. It has not had the characteristics of a bull market. Volumes have been underwhelming, no new leadership group has emerged, […]
Read more...Ooh, this is getting interesting. Sports fans may recall that as of last week, Citigroup was refusing to back down on the issue of the contract for Andrew Hall, the head of commodities trading unit PhiBro, which could be worth as much as $100 million this year. A side comment: Hall seems to be trying […]
Read more...Frank Veneroso was kind enough to write as a result of seeing a guest post “Debtor’s Revolt?” by his colleague Marshall Auerback. Veneroso also provided his latest newsletter and gave us permission to post it. It it pretty long (12 pages), I extracted the executive summary and other key bits. Be sure to read the […]
Read more...Ambrose Evans-Pritchard has a good piece up at the Telegraph on an issue that appears not to have gotten the attention it merits, namely, the level of underutlization of capacity and the risk it poses to anything dimly resembling recovery. Evans-Pritchard brings up a related topic, that deflation is a bigger issue that most commentators […]
Read more...I have generally not posted on Friday night bank seizures, unless there is a noteworthy element to them. The US has around 8000 banks, and with 70% of the deposits in the 19 banks that participated in the dubious stress tests, we can have a lot of little banks get merged into slightly less little […]
Read more...Submitted by Marshall Auerback, an investment manager who writes for New Deal 2.0. In “The Holy Grail of Macroeconomics”, Richard C Koo’s account of post-bubble Japan, Koo illustrates that highly indebted corporations with depressed asset holdings and a positive cash flow will embark on sustained debt repayment until their balance sheets are healthy once again. […]
Read more...The 1980s supermodel Linda Evangelista once said. “We don’t wake up for less than $10,000 a day.” That seems to be the motto of American bankers, (save Citigroup’s Andrew Hall, who needs 40 times that much per business day). Not only do they not care about things banks used to deem as important, like playing […]
Read more...The most interesting aspect of the latest stage of the tempest-in-a-teapot over now famous Phibro trader Andrew Hall’s contract. which could reap him as much as $100 million in 2009, is that Citi appears to be girding itself for a fight with the government over it. This stance suggests several possibilities, which by the way […]
Read more...Well, Ken Rogoff does not do a Shakespearean turn, but he makes a badly needed observation in his latest piece at Project Syndicate, namely, that pinning a lot of blame for the crisis on the Lehman collapse is a faulty analysis. And he picks up a pet theme of ours, that patching up the system […]
Read more...Today’s Financial Times highlights a possible target of regulatory action: bank overdraft fees. And those fees are not distributed the proverbial 80/20 pattern, with 20% of the accounts contributing 80% of the activity, but 90/10. And that 10%, not surprisingly, is in consumers with the lowest credit scores. And the biggest banks are the ones […]
Read more...At this point, the New York Times story reporting that Treasury Secretary Hank Paulson and Goldman chief Lloyd Blankfein spoke frequently during the crisis is close to a “dog bites man” news item. After Goldman was the only Wall Street player involved in the discussions of what to do about the rapidly unravelling AIG, and […]
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