When a CEO has a major foot in mouth episode, it’s usually the result of uncontrolled candor. And today’s outburst by GE CEO Jeffrey Immelt appears to be true to form. According to the Financial Times, the GE cheiftan said some less that politic things about China and Obama at a private gathering which his […]
Read more...This is a wonderful short video by RSAnimate based on a talk by radical, as in Marxist, sociologist David Walker. For those who recoil, Marx was the first to take note of the propensity of capitalism towards instability. By contrast, neoclassical economics, which has dominated policymaking in advanced economies, posits that economies have a propensity […]
Read more...The New York Times has unearthed a damning tidbit about the bailout of AIG: When the government began rescuing it from collapse in the fall of 2008 with what has become a $182 billion lifeline, A.I.G. was required to forfeit its right to sue several banks — including Goldman, Société Générale, Deutsche Bank and Merrill […]
Read more...We’ve warned for some time that the eurozone’s sure-to-fail muddle-through approach to its structural challenges was rattling investor confidence. Worse, its insistence on wearing an austerity hairshirt was not only committing Europe to deflation, but had high odds of sucking the global economy down along with it. Given how fragile the recovery is in advanced […]
Read more...This Sydney Morning Herald story (hat tip reader Gordon) highlights a Bank of England report that not only points out the magnitude of the financing needs of major banks over the next few years, a daunting $5 trillion, but also indicates that US and European bank refinancings are falling short of their rollover calendar. This […]
Read more...By Richard Smith, a London-based capital markets IT consultant In my last post, “Tracking the Rabbit through the Anaconda” , I mocked Geithner a bit and promised you all a spot of moaning about what’s missing from the financial reform bill. Well, the anaconda has now had the time it needed to produce its offering. […]
Read more...A reader with considerable experience in real estate who has asked to remain anonymous pointed to an article in Housing Wire describing some possible unintended consequences of the Administration’s push for more short sales: This past week, I received an email from one of my dearest friends that has really stuck with me. It illuminates […]
Read more...While the headline focuses on her outlook for housing, Whitney is bearish across the board, seeing little reason to cheer on the employment and bank earnings fronts. She sees a 10% fall in housing prices in the next six months (!), which will hit bank earnings (Whitney has argued since at least early 2009 that […]
Read more...By Rob Parenteau, CFA, sole proprietor of MacroStrategy Edge, editor of The Richebacher Letter, and a research associate of The Levy Economics Institute Richard Alford has correctly identified the need to address global imbalances – rather than simply slouch our way back to some milder version of status quo before the pre- Lehman meltdown arrangement, […]
Read more...We noted a bit more than a week ago that we expect the European banks stress tests to backfire. The US version was a successful con game because the officialdom provided adequate disclosure about the process and stayed firmly on message, the banks were allowed to “manufacture” as analyst Meredith Whitney put it, impressive earnings, […]
Read more...The bond markets are quicker-trigger to register concern about deteriorating fundamentals than the stock market, with risky credits the canaries in the coal mine. Bloomberg reports that spreads have widened in both leveraged loans and emerging market debt, but also notes some analysts see this rise as a blip rather than a trend. From Bloomberg: […]
Read more...I want the word “reform” back. Between health care “reform” and financial services “reform,” Obama, his operatives, and media cheerleaders are trying to depict both initiatives as being far more salutary and far-reaching than they are. This abuse of language is yet another case of the Obama Adminsitration using branding to cover up substantive shortcomings. […]
Read more...By Tom Adams, an attorney and former monoline executive When the financial crisis hit, I was in the direct line of fire. My company blew up very early in the crisis, giving me the dubious opportunity to see how bad things were going to get long before most of the rest of the world, including […]
Read more...In a weak nod to “too big to fail” concerns, House Financial Services Committee chairman Barney Frank announced that larger banks and hedge funds would pay a fee as a way of pre-funding resolution costs. From the Financial Times: The proposed levy emerged as an unwelcome surprise for the industry deep into a late-evening congressional […]
Read more...One of the dead bodies in plain sight that generally goes unremarked upon in polite company is the buyers’ strike in the securitization market. Issuance of private label (as in non-government guaranteed) residential mortgage backed securities has collapsed, with government entities insuring 96.5% of all home mortgages in the first quarter 2010. The commercial mortgage […]
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