The prospect of an almost-as-big-as-Lehman bankruptcy evidently focused the mind of the officialdom. The providers are private firms, but one imagines, a la the LTCM rescue, that they were given a big prod by regulators It appears the amount of the facility is sufficient to refund maturing paper, but likely falls short of the end […]
Read more...Banks are falling over like kingpins. Not good at all. First, on the Fortis salvage operation: Belgium, The Netherlands and Luxembourg invested 11.2 billion euros ($16.3 billion) in Fortis, Belgium’s biggest financial-services firm, to restore confidence in the bank after shares fell 35 percent last week. Belgium will buy a 49 percent stake in Fortis’s […]
Read more...See here, sports fans. At least it isn’t three pages long any more. I haven’t gotten past noting that it is a “discussion draft”. Hope to have more substantive comments in due order. The Troubled Assets are initially limited to commercial and residential mortgages and instruments based on them. The Treasury has to go to […]
Read more...Apparently there has been a pretty weird announcement. Progress is being made to sound like resolution. Since the House Republicans weren’t part of the photo op, it isn’t at all clear whether this is real. First sighting from Clusterstock, will add updates as they come in: Update (12:35 a.m.): Nancy Pelosi speaks first. She says […]
Read more...The mainstream media, giving reports from Barney Frank and Nancy Pelosi, who said last week there was a bailout deal imminent, are giving similar chipper reports of progress with appropriate caveats. From the New York Times, “Consensus on Rescue Plan Is Said to Be Near“: After a tumultuous week, including a contentious meeting at the […]
Read more...The quote above comes from Robert Bennett (Senate, R-Utah) and while no doubt narrowly true (presumably it’s Wachovia), implying that the bank will go under due to the failure to implement the Paulson plan is just plain dishonest. The bank has been wobbly for a very long time and t isn’t at all clear that […]
Read more...The IMF just released a study that analyzed 124 banking crises, and I wish everyone in Congress (well, at least their staffers), the Treasury, and the Fed read the paper. It provides insight into what worked and didn’t work in past banking crises, and gives an idea of what we might expect from various policy […]
Read more...Some readers would have a go at me whenever I’d post articles by the Telegraph’s Ambrose Evans-Pritchard. Although he has a tendency to hyperventilate and sometimes oversimplifies, he regularly points to data and research that I haven’t seen covered elsewhere. More important, his major calls this year have been correct. He predicted the oil price […]
Read more...The Times Online tells us that even blue chip companies are having trouble raising money in the commercial paper market. By way of background, commercial paper is an unsecured short term debt (there is another version, asset backed commercial paper, but that’s not the one under discussion right now) that companies and financial firms use […]
Read more...From Forbes (hat tip reader The Social Pathologist): In fact, some of the most basic details, including the $700 billion figure Treasury would use to buy up bad debt, are fuzzy. “It’s not based on any particular data point,” a Treasury spokeswoman told Forbes.com Tuesday. “We just wanted to choose a really large number.”
Read more...The statistics on retail brokers at banks are a bit dated, since they don’t reflect the fact that Merrill, aka The Thundering Herd, is soon to be part of Bank of America (I am not certain whether the deal has actually closed). Nevertheless, the fact that WaMu has a meaningful broker-dealer operation was seldom mentioned […]
Read more...The Wall Street Journal reports that Wachovia has entered into discussions of a sale of the bank. Wachovia had a recent dalliance with Morgan Stanley, but those talks struck us as the height of desperation (it was hard to see a fit between the two firms), although Morgan Stanley at that juncture needed to make […]
Read more...Hope you like the smell of napalm in the morning. Otherwise, this will not be your sort of day. I have to turn in, but the early morning sightings, as expected, are not at all pretty. What is particularly troubling is that central bank interventions may have become unproductive. Banks have quit lending to each […]
Read more...Oh, we are in for a wild ride today. Oddly, the reaction in Pacific rim stock markets seems comparatively subdued (the Nikkei is down only 134 points, but the Hang Seng has fallen over 2%), but the credit markets are stumbling badly. Central banks are rushing to the rescue, but their efforts aren’t having much […]
Read more...Boy, by the time this is all done, what won’t JP Morgan own (well, besides Countrywide)? FDIC is winding up WaMu. The bank had been struggling to find a resolution for some time, and an FDIC takeover would have strained the agency’s resources. But one has to why JP Morgan took this on at such […]
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