The Times appears to have broken the story (hat tip reader Saboor) that the Treasury is seriously mulling an emergency cash injection into the troubled mortgage giants Fannie and Freddie in the form of some sort of senior equity (the article is not clear on this point, but the Wall Street Journal had mentioned a […]
Read more...Willem Buiter has a characteristically colorful post, “Time for comrade Paulson to pull the plug on the Fannie and Freddie charade” on the prospect of a Fannie and Freddie rescue. Why is it the British can fulminate better than we Americans do? But Buiter’s beef isn’t the operation of the GSEs but the philosophy behind […]
Read more...Nouriel Roubini has consistently been accurate in predicting the course of our snowballing credit crisis, and has also made some important intellectual contributions to the discussion. such as how the breakdown of the Bretton Woods system has lessons for the future of our Bretton Woods 2 currency program. But in my view, Roubini’s post today […]
Read more...The end-game for what was very briefly the nation’s biggest mortgage lender, IndyMac, seemed inevitable, although the signals even as a of a few days ago were that a takeover was not imminent. The timing, coming in the midst of Famnie and Freddie worries, is particularly bad. One can only conclude that this action could […]
Read more...There is a very good op-ed at the Wall Street Journal today by Adam Levitin, who we have often quoted at the blog Credit Slips. It offers a clear explanation of why the Dodd-Frank housing bill won’t accomplish much in the way of borrower relief. Many of our readers will regard that as a good […]
Read more...The New York Time reports that the Federal government is leaning towards conservatorship as the approach for handling Freddie and Fannie’s shaky finances. Under this scenario. shareholders are wiped out and taxpayers fund any losses. What I find disturbing about the mainstream media coverage is the refusal to connect the dots between the increasing demands […]
Read more...Just a few weeks ago, experts were saying the credit crisis was on the mend and we could all get back in the pool. But as we discussed in an earlier post, worries about Fannie and Freddie are on the rise, and the increase in agency spreads back in January was probably the biggest trigger […]
Read more...We recently wrote about a long overdue shot across the bow from the Senate Banking Committee about initiatives by the Treasury and now the Fed that amount to a regulatory land grab. Why do we think Congress should have done more, sooner? Because the proposed action put the Fed in the position, as with the […]
Read more...We haven’t been covering the spectacle of Indymac twisting in the wind, since highly-regarded blogs like Calculated Risk and Housing Wire follow the mortgage lenders closely. However, the panic yesterday about Fannie and Freddie perhaps having to come up as much aswith $75 billion in equity ($75 billion?) diverted attention from what on any other […]
Read more...Paul Kedrosky posted on a report published in a Swiss paper (he courteously provided the English translation) of the results of a study prepared for hedge fund Bridgewater Associates that projects that total losses to the financial system from the credit crisis will reach $1.6 trillion. Note that losses taken to date are only $400 […]
Read more...The newly-released annual report of the Bank of International Settlements sounds as if it is unusually lively reading. Most official documents strive for an anodyne tone, while this one appears to be unusually blunt. However, while some reporters have their hands on it, the report is not yet up on the BIS website, so those […]
Read more...Larry Summer’s latest comment at the Financial Times, “What we can do in this dangerous moment.” is troubling both for its analysis of our economic mess and its remedies. Start with his first paragraph: It is quite possible that we are now at the most dangerous moment since the American financial crisis began last August. […]
Read more...Why has taken it taken so long for Congress to try to rein in a Treasury, Fed, and now SEC that has roughshod over their prerogatives? And even odder, why do they send a shot across their bow now that the Fed and SEC are starting to work together on securities reform ideas (or more […]
Read more...We’ve mentioned from time to time the Fed’s fantasy that banks could recapitalize in short order. John Dizard of the Financial Times has been the most blunt in describing the disconnect between the central bank’s wishes and reality: It is not fair to say the Fed does not have a plan. It does. The plan […]
Read more...The UK, which like the US went on a binge of consumer debt creation, is similarly in the hangover phase. Individuals are increasingly resorting to the refuge of the desperate, namely, payday lender. From the Times Online: Consumers are increasingly turning to short-term loans charging interest of more than 1,000 per cent to tide them […]
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