Readers may recall that we hated the TARP from its inception. Recall that the TARP was so named because the TA stood for “troubled asset”. The plan was to buy crappy assets from banks because this would leave them with nice pristine balance sheets and they could go forth and be reckless lend once again. […]
Read more...Bank of America CEO Ken Lewis gave former Merrill chief John Thain an unceremonious heave-ho earlier today, a mere month after the Merrill deal closed, after one too many nasty surprises: the deterioration of Merrill in the fourth quarter, the revelation that Merrill effectively stiffed BofA by paying bonuses early, thus depriving the bank of […]
Read more...Playing fast and loose seems to be the theme of the evening. First we have the credulity-stretching China fourth quarter GDP release, and now we have the eleventh hour stealing of the silver by Merrill’s top executives as one of the firm’s final acts. Let us remember the fact set: Merrill managed to get Bank […]
Read more...The New York Times reports tonight on how banks are clamping down on credit to small homebuilders, with the result that many will go out of business. There were several things I found surprising about the piece: 1. That banks are getting stringent now. The housing market has been on a rapid decline since the […]
Read more...Steve Waldman offers a radical and unconventional cure to our financial mess. Stop lending. Waldman is deadly serious and thinks our attachment to lending is based on dangerously flawed premises: I am glad that the banks, for all the hundreds of billions of dollars we are giving them, are not lending. That is not because […]
Read more...As readers may recall, we have been skeptical of the TARP from the get-go. As the program ricocheted from one high concept to another, one had to wonder: were Paulson and the Treasury truly that incompetent, or was the seeming cluelessness, as some have suggested, a cover for a program to transfer funds to the […]
Read more...Of course, it takes one to know one. The no-doubt accurate call on the health of British banks comes from one of their own, Royal Bank of Scotland. Funny how no US bank is willing to make the same call. From the Independent: Britains biggest banks are “technically insolvent”, Royal Bank of Scotland said yesterday… […]
Read more...The market’s case of nerves this week seems a tad more justified, given that the details of the Bank of America rescue plan are apparently out, Previous press reports suggested the Charlotte bank might need $8 to $10 billion of additional equity to compensate for losses related to the Merrill acquistion. Yes, as Senator Everett […]
Read more...We posted this in June: The Wall Street Journal reports today that Citigroup is shutting down Old Lane Partners, a hedge fund started by Vikram Pandit that the bank acquired a mere 11 months ago. The bank decided it couldn’t spare the capital to shore up the struggling hedge fund. The article noted: Old Lane […]
Read more...Those of you antique enough to remember Peter Lynch, storied investor who took Fidelity’s once obscure Magellan fund from $18 million to $14 billion in assets (and a seemingly unmanageable 1,000 positions) may also recall that he was famous as a tireless stockpicker. He wrote a book for retail investors, Beating the Street. One of […]
Read more...Now we know why John Thain was so eager to sell Merrill. That comment isn’t entirely fair (the deterioration in the securities firm took place in the fourth quarter, while the sale was negotiated in September). But directionally, the former Merrill chief saw the downside risks and did what was best for the firm. The […]
Read more...Martin Wolf has a very good comment in the Financial Times, “Why Obama’s plan is still inadequate and incomplete,” which readers might tempted to ignore, since the headline suggests the piece reaches a conventional conclusion: the Obama stimulus plan is too small. That would be a mistake. The Wolf article (as others have done) does […]
Read more...The effort to get the second half of the TARP approved (or more accurately, not force Obushma to nix a Congressional turndown) is all feeling a bit Groundhog Day-ish, without the backdrop of a Lehman collapse and AIG implosion to add a sense of urgency and high drama. The officialdom is again using its access […]
Read more...The irony is rich, and a bit sad. I had Citi as a client in the 1980s, and served them in a small way in their efforts to make inroads into investment banking. It looked like a quixotic effort with commercial banks seeming likely to remain relegated to the margins: smaller clients, simpler deals. JP […]
Read more...Remember the much decried end-of-Clinton- era pardons, the most controversial of which involved tax cheat and storied trader Marc Rich? Well, if I am reading the tea leaves right, those shenanigans pales compared to the nonsense Bush is trying to pull in his last week in office. Bush is making it sound as if it […]
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