Dear readers, we are NOT setting out to have a Willem Buiter-fest this weekend. It’s simply that this is a slow news period and Buiter has a good post after the first video clip I’ve ever seen of him. So if there was more activity, the Buiter-density would be lower. The Anglophile Dutch economist has […]
Read more...Michael Lewis has a generally very good piece in Vanity Fair on the AIG Financial Products mess, filing in some bits that were missing from the equation. He does go a bit overboard in saying nice things about Jake DeSantis, the man who wrote the New York Times “Dear AIG: I Quit!” op ed. To […]
Read more...Willem Buiter touches on the state of bank lending and proposals for financial services industry supervision. Enjoy!
Read more...Submitted by Edward Harrison of Credit Writedowns. Yves said her piece about the new affordable FHFA program to allow home ‘owners’ in negative equity to stay in their homes. And I had a crack at it yesterday as well. But, I have some thoughts to run by you here using a specific example of an […]
Read more...Martin Wolf is pessimistic about the whether the financial system can be reformed, but nevertheless offers some toughminded suggestions. Oddly, he seems to see the big obstacles not as political, but as practical, that markets are too big and interconnected, and sees that as an intractable problem. I agree that it will almost certainly not […]
Read more...Remember SIVs, financial public enemy number one of late 2007? Henry Paulson spent a lot of time failing around trying to come up with a remedy that involved only the government knocking heads together. That was a resoudnig Then it appeared that everyone shrugged their shoulders and decided this wasn’t such a big deal after […]
Read more...Readers may recall that it wasn’t all that long ago that China’s banks were sitting on big losses and the analysts debated how bad the mess was. In 2003, for instance, the damage was pegged at $500 billion, a stunning figure given the size of the economy, and meant the banking system was insolvent. Even […]
Read more...The Bank of International Settlements, mindful of the importance of its role, would never say anything as crass as the translation I offered in the headline. But that is nevertheless a message in its newly-released annual report. From the Guardian (hat tip reader DoctoRx): Taxpayers around the world still face potentially large losses because governments […]
Read more...Enjoy, and thank reader Michael M:
Read more...America as banana republic is alive and well. Tonight’s version is that anything that helps banks is permitted, official rules to the contrary. Banks enjoyed lots of fun and profit from setting up various off balance sheet vehicles that are now coming a cropper. We saw the preview of this movie with structured investment vehicles, […]
Read more...Wow, the credit loss numbers keep getting worse and worse. And although a lot of observers like to attribute banks slashing credit lines and jacking up rates to pending pro-consumer rule changes, the more obvious culprit is their hemorrhaging portfolios. Banks tend to close the credit gate after the horse is in the next county, […]
Read more...Nothin’ like having Uncle Sam cut an overly friendly deal. Plenty of folks, including yours truly, were skeptical of Treasury’s claim, made often with a straight face. that the government was exercising care on who got TARP funding (as in it was not just handing out dough willy-nilly, but did have an eye to getting […]
Read more...There are times I think I am hopelessly naive. For three years in the early 1990s, I had a cutting-edge Chicago-based derivatives firm, O’Connor & Associates, as a client. They had 750 employees and no customers, at least initially, which gives you an idea of the scale of their business. O’Connor did statistical arbitrage, which […]
Read more...Andy Xie, writing for Cajing, questions the durability of China’s recovery. He argues that much of hte upsurge in lending, which was one of the developments that cheered commentators, is fueling asset speculation, in this case in commodities, Reports this spring has suggested that as much as a third of the new lending was going […]
Read more...Submitted by Knute Knutson: As I imagine many of your are, I’m an avid reader of Gillian Tett’s Financial Times columns, I therefore purchased her recent book, Fool’s Gold: How the Bold Dream of a Small Tribe at J.P. Morgan Was Corrupted by Wall Street Greed and Unleashed a Catastrophe, shortly after its release. Ms. […]
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