In case readers haven’t figured it out, I am a big Willem Buiter fan. Even when he is wrong, he is at least forthright and colorful. He does have an appetite for showing off his formidable intellect. Nevertheless, his best qualities are his willingness to take on orthodoxies and authorities, and his vivid, trenchant style. […]
Read more...Before I start shredding “Nationalize? Hey, Not So Fast,” by Alan Blinder in the New York Times, let us first go back to the basic problem,, nomenclature. Blinder does not specifically do so in this article, but opponents to nationalization often raise the image of enterprises being expropriated by the state, in other words, healthy […]
Read more...Even though I often take on the Wall Street Journal’s depiction of new stories, the flip side is that it does break significant news stories. Today is one of those days, although I wonder about an item this juicy hitting the wires on a Friday evening. Remember that the reason for shoring up AIG was […]
Read more...We have sometimes pointed to a paper by Nobel prize winner George Akerlof (of “markets for lemons” fame) and Paul Romer on the phenomenon of looting. Forgive us for repeating ourselves, but this paper was written in the wake of the savings and loan crisis, and was clearly ignored, because if anyone had heeded their […]
Read more...The British don’t do shrill, but Wolf today is as close as you will ever find on the pages of the Financial Times. And the telling sign that Wolf is borderline unhinged is (aside from mentioning his fury) that his article has less of a clear structure than his comments usually do. But he nevertheless […]
Read more...The Treasury today announced its so-called “Making Homes Affordable Program”. I am clearly an old fart. The fact that the Treasury bothered to have a logo created for the program (do consumers and servicers really need brand imaging when having money shoved at them?) gives me more than a little pause. I will nevertheless try […]
Read more...As dramatic as the supposed revelation that the FDIC may need to go hat in hand to Congress for more dough, this is hardly a surprise. The FDIC also needed to appeal for additional funds in the savings and loan crisis, and our current mess dwarfs that one. From Bloomberg: Federal Deposit Insurance Corp. Chairman […]
Read more...One of the things I find truly remarkable is the degree to which Americans (or at least commentary in pretty much all American media) have bought into certain ideological constructs as if they were gospel truth. Now in fact, most of us operate from ideologies of various sorts. For instance, reasonable people can differ on […]
Read more...A New York Times article tonight, “U.S. Likely to Keep the Reins on Fannie and Freddie“, raises the specter that the mortgage giants may never return to private form. Frankly, we think that is not entirely a bad thing. Fannie and Freddie were originally agencies of the US government and were (sort of) spun out […]
Read more...Analysts, regulators, and politicians are beginning to recognize that most if not all of the widely touted benefits of modern finance redounded only to its purveyors. The decidedly retro Canadian banking system, with simple products, high equity requirements, and relatively modest securities operations that focus on domestic customers, is the soundest in the world. As […]
Read more...A very good comment by former Treasury Secretary James Baker in the Financial Times, “How Washington can prevent ‘zombie banks’,” warns that the US is on its way to repeating the Japanese error of propping up dud banks and creating a moribund economy as a result. His program has the merit of being simple (at […]
Read more...I was in Kansas City at a econbloggers conference hosted by the Kauffman Foundation, and one of the breakout discussions was on the fate of finance. One participant who claimed to be have a basis for his view (it could be based on private polling or focus group research, or less scientific methods) said that […]
Read more...Funny how a deal that is giving Citi a premium on its common shares that one typically sees in an M&A transaction (ie, the target is sought after) in the course of a salvage operation is being . Similarly, the bank is being asked to have its board members that are insiders resign those seats. […]
Read more...Apologies for the terse posts tonight; out of town, will be lighter than usual today and tomorrow. The Financial Times has been keeping tabs on the results, or perhaps more accurately, the lack thereof, of collateralized debt obligations. A couple of weeks ago, it highlighted research by Morgan Stanley and Wachovia that concluded that nearly […]
Read more...Reader M&M called my attention to a Bloomberg story I was really hoping to avoid, “U.S. Sets a Six-Month Deadline for New Bank Capital“. The opening: The government set a six-month deadline for the biggest 19 U.S. banks to raise any new capital deemed necessary after a mandatory review of their balance sheets. The regulators […]
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