Dear God, let’s just kiss the US economy goodbye. It may take a few years before the loyalists and permabulls throw in the towel, but the handwriting is on the wall. The Obama Administration, if the Washington Post’s latest report is accurate, is about to embark on a hugely expensive “save the banking industry at […]
Read more...Maybe I am reading too much into this development, but the fact that Team Obama is planning to announce some TARP restrictions prior to revealing how the money will be doled out is really odd. I welcome other views, but I can come up with only three theories: 1. The Administration is waking up to […]
Read more...This is starting to get interesting. Readers may recall that a fair number of hedge funds have restricted or barred redemptions (a classic example of “possession is 9/10 of the law” since it is contrary to the redemption policies in their investment agreements). The justification goes something like this: We the fund hold liquid and […]
Read more...Your humble blogger has been saying for some time that efforts to prop up bank asset values are prolonging the financial crisis, and the the various incarnations of “bad bank” plans inevitably entail buying dud assets at above market prices. That has the ugly side effect, which some no doubt see as a virtue, of […]
Read more...Reader Doug pointed to a Seattle Post-Intelligencer article, “FBI saw mortgage fraud early,” which was sufficiently misleading to get my juices going. Some key sections: The FBI was aware for years of “pervasive and growing” fraud in the mortgage industry that eventually contributed to America’s financial meltdown, but did not take definitive action to stop […]
Read more...Today, Senator Claire McCaskill of Missouri introduced legislation that would limit salary, bonus, and stock options for executives as financial firm recipients of bailout funds be limited to the President’s level of pay, currently $400,000. McCaskill’s proposal is likely to go all of nowhere. She is not a member of the Finance or Appropriations committee, […]
Read more...Reader Tim C pointed us to a post on Tim Price’s blog, “The Price of Everything,” which provides astute financial and sometimes social commentary. Below is an excerpt: Dear Western banking establishment, I notice that your unauthorised credit facility from international lenders of last resort now totals approximately $10 trillion. As a taxpayer and therefore […]
Read more...Goldman, in a research note discussed at CNBC, says the total tab for the US bank rescue operation could run as high as $4 trillion: The cost of restoring confidence in U.S. financial firms may reach $4 trillion if President Barack Obama moves ahead with a “bad bank” that buys up souring assets. The figure […]
Read more...I am struggling for the right metaphor to describe Timothy Geithner’s conduct. Marie Antionette ain’t bad, but perhaps better is the Last Commandment from Animal Farm: All animals are equal, but some animals are more equal than others This blogger was troubled by Geithner’s demeanor during the Senate hearings on the Bear Stearns bailout, when […]
Read more...In case you had any doubts about the propriety of Merrill’s 2008 pay packages, this Wall Street Journal story on the continuing slugfest between Merrill’s former CEO John Thain and Bank of America’s chief Ken Lewis should put any doubts to rest: According to a securities filing last week, Merrill’s overall compensation and benefit expenses […]
Read more...Even if there were a rationale for Citi buying a corporate jet now (which I cannot fathom, given their horrid financial condiiton), why buy new? There are no doubt plenty of used jets for sale right now. This incident illustrates the degree to which a corporate/financial elite has developed in the US. Top executives feel […]
Read more...Before we get to the particulars of tonight’s Wall Street Journal story, we need to step back a second. Just like the war in Iraq, which had a ton of justifications served up by the Bush Administration, none of which added up (and the most obvious one, that the Bushies wanted to control the second […]
Read more...Some readers have suggested that while ex-Merrill CEO John Thain’s actions post the agreement to buy his firm were questionable, his ouster was an effort to divert blame and attention for the turkey deal from BofA CEO Ken Lewis. If Thain, as Lewis charged, ducked direct questions about Merrill’s deteriorating financial condition, or worse, was […]
Read more...The Administration has evidently launched a campaign to warn the American public that the black hole banking industry will need more in the way of recapitalization funding than is currently on offer. Mind you, we are NOT opposed to this sort of thing were it done correctly: tough minded banking industry reforms, seizure of the […]
Read more...Adam Levitin at Credit Slips has a big beef with a lot of the critics of the idea of mortgage cramdowns as an alternative to foreclosure. For the most part, they don’t know what they are talking about. That charge may sound extreme. but Levitin makes a persuasive case. First, the only empirical work done […]
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