It seems the wheels are coming off the European experiment. Yesterday, we had a huge meltdown in Greek bonds. Media reports suggest that a recent article in German daily Frankfurter Rundschau are what triggered the latest selloffs in Greek sovereign debt (See the Telegraph’s account here; hat tip Swedish Lex). This article leaked portions of […]
Read more...Things are suddenly getting very interesting… Readers may have taken note that the Treasury has launched a son of HAMP, its ineffective program to get banks to provide undertake mortgage modifications, called 2MP. As far as I can tell, 2MP is a farce. It is simply another back door way to recapitalize troubled banks. Mike […]
Read more...Perversely, what prompted me to read Lawrence Kotlikoff’s new book, Jimmy Stewart is Dead, was a review that described his proposal as forcing all banking to become mutual funds. That seemed both radical and naive, but coming from a well known economist, I thought it would be interesting to see if he could make a credible case.
Read more...By Gonzalo Lira, a novelist and filmmaker (and economist) currently living in Chile In 1982, many of the banks hit by the Latin American debt crisis were effectively insolvent. Paul Volcker, as the then-Chairman of the Federal Reserve—charged with overseeing the banking system—effectively cast a blind eye on this banking insolvency. Volcker’s reasoning seems to […]
Read more...Even though I have read a number of accounts of the horrorshow of Jefferson County’s sewer financing fiasco, every time I go through a new one that it reasonably detailed, it still instills the same sense of rage. Rage not simply at the pervasive corruption – that’s bad enough – but that this predatory style […]
Read more...One has to wonder whether anyone in a position of influence really believes what he is selling. At best, Jamie Dimon’s defense of too big to fail banks like his own JP Morgan is a vivid illustration of Upton Sinclair’s saying, “It is difficult to get a man to understand something, when his salary depends […]
Read more...Rolfe Winkler has an useful sighting on a wrinkle in the Ambac receivership. A big bone of contention has been the credit default swaps that Ambac wrote on various structured credit transactions. While many of the contracts provided for considerably delayed payment (they were different in this regard from AIG’s CDS), as Ambac’s condition worsened, […]
Read more...Independent Strategy’s latest report, “China’s credit bubble: the missing piece in the jigsaw” makes a persuasive case that China’s debt fueled growth model is due for a hard landing, but the timing is uncertain, since the debt is funded internally. China is barely past an episode of dealing with banks chock full of bad loans […]
Read more...Enjoy! Below is a related discussion by Ann Rutledge of R&R Consulting, another structured credit expert:
Read more...By Richard Alford, a former economist at the New York Fed. Since then, he has worked in the financial industry as a trading floor economist and strategist on both the sell side and the buy side. Wide swaths of families, businesses, investors, taxpayers, and others have had not just their net worth but their lives […]
Read more...By Marshall Auerback, a fund manager and investment strategist and Rob Parenteau, CFA, sole proprietor of MacroStrategy Edge, editor of The Richebacher Letter, and a research associate of The Levy Economics Institute Who funds our budget deficit? It is a question taking on increasing significance, given the recent back up on longer-dated bond yields, which […]
Read more...By Marshall Auerback, a fund manager and investment strategist who writes for New Deal 2.0. Arthur Conan Doyle’s literary creation, Sherlock Holmes, once solved a murder by noting the dog that didn’t bark. It doesn’t take Holmes’s ingenuity to see that the plan on offer for Greece is clearly a rescue package which doesn’t rescue. […]
Read more...The Financial Times reports that the SEC has launched a probe into whether other financial firms used repos to engage in what amounted to financial fraud (as in fraudulent financial reporting), although perilous few are using the “F” word. From the Financial Times: US regulators on Monday asked more than 20 financial groups whether they […]
Read more...By Tom Adams, an attorney and former monoline executive Felix Salmon at Reuters and Steve Gandel at Curious Capitalist used some of the analysis in Michael Lewis’s The Big Short as an opportunity to attempt to exonerate Goldman Sachs for the charge of deliberately constructing CDOs to go bad for their own profit. In particular, […]
Read more...It is astonishing that the words “rescue” and “bailout” are being applied to the headfake announced by the EU for Greece last week. Rebecca Wilder at Angry Bear blandly noted, “All I’m saying is that this plan, in its current form, is really not much of a plan at all.” Ed Harrison stressed that voters […]
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