The Financial Tines and the Wall Street Journal feature two treatments of the same theme, investors looking to pick up bargains in companies damaged by the subprime implosion. The Financial Times discusses the interest of the Kuwait Investment Authority in acquiring stakes in financial services firms; the Journal article is aimed at retail investors that […]
Read more...The Financial Times’ Tony Jackson admits to having come to a bearish propensity from having trained under the dour Scots, but nevertheless thinks that pessimists, at least as far as the near-term economic outlook is concerned, may have a point. Jackson goes through a quick and dirty list of Things That Could Cause Trouble. While […]
Read more...Since I often take the Wall Street Journal to task on its reporting, I wanted to be sure to point out when they do a good job on topics of interest, per today’s page one story, “Lender Lobbying Blitz Abetted Mortgage Mess.” The article describes the lobbying efforts of subprime lender Ameriquest and three industry […]
Read more...The theme du jour, at least in the world of Dow Jones, is the sorry condition of the financial services industry. While the basic thrust is nothing new, some of the data point are revealing. The Journal’s Heard on the Street column tells us that banks like Citigroup and HSBC are likely to sell business […]
Read more...Goldman’s William Tanona predicts further sizable losses at major brokerage firms, with Citi and Merrill taking particularly large hits. Tanona also expects Citigroup to cut its dividend. From Bloomberg: Citigroup Inc., JPMorgan Chase & Co. and Merrill Lynch & Co. may write down an additional $34 billion in securities linked to the collapse of the […]
Read more...For the record, Menzie Chinn is thoughtful and measured, and had a much less inflammatory heading to his post on the need to prevent “looting” in any regulatory reform that comes out of the subprime train wreck. Chinn uses the term looting in a very specific fashion, using George Akerlof and Paul Roemer’s analysis of […]
Read more...The headline above appears in a Financial Times story today. Note that if any such sentiments are voiced in the press in the US, they are discreetly tucked away in the body of the story. Why do we treat people in the officialdom with kid gloves? Paulson put himself front and center on this SIV […]
Read more...We are more that a bit skeptical of whether the New Hope Alliance Plan (the name alone instills doubt) to help a subset of subprime borrowers by freezing their initial interest rate is more about creating photo ops than helping meaningful numbers of overextended borrowers. Why are we so dubious? The last smoke and mirrors […]
Read more...The SV rescue plan touted by the Treasury Deparment and sponsored by Citigroup, JP Morgan, and Bank of America, has finally, officially, had a stake put through its heart today. It dies unmourned and unloved. It wasn’t hard to see that this concept was unlikely to get off the drawing board. But with the Treasury’s […]
Read more...A solid, well argued case against further central bank accommodation by Charles Wyplosz, professor of economics at the Graduate Institute of International Studies in Geneva, in the Financial Times. The centerpiece of his argument is that by providing ample liquidity and low interest rates, monetary authorities are delaying the very steps necessary for banks to […]
Read more...The Wall Street Journal has a page one story, “Fraud Seen as a Driver In Wave of Foreclosures,” which probes the role of mortgage scams. I’m sure Tanta will wax eloquent on this article, but let me hazard a couple of observations. First, the article seeks to describe the fraud problem, citing the widely-touted Mortgage […]
Read more...The ECB’s offer to lend to all takers who could post collateral for two weeks at 4.21% or higher led to an unprecedented $500 billion worth of advances. The New York Times and the Financial Times offer some insights as to what this portends. First, from the New York Times, which focused on the comments […]
Read more...A Bloomberg story reveals that municipal bonds have lagged other fixed income investments, mainly because important investors, namely hedge funds and banks, are directing capital to other uses (as in saving their hides). Due to their tax-deductible status, munis trade at a lower yield than Treasuries, but that differential has narrowed markedly. Are munis a […]
Read more...Despite the widely-held view that the SIV bailout plan engineered by the Treasury Department and sponsored by Citigroup, JP Morgan, and Banks of America will be largely irrelevant, the program keeps moving forward. We have the latest press release, um, update, courtesy Bloomberg: The “SuperSIV” fund, set up to provide cash to structured investment vehicles […]
Read more...Why am I cynical about the measures that the Federal Reserve proposed today to stem predatory mortgage lending? They smack of being an obligatory effort taken in the face of Congressional and media pressure. The Fed appears to have done little in the way of its own investigation of what is happening in the field […]
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