Ambrose Evans-Pritchard is nothing if not decisive in his views, and has a undisguised fondness for the bearish perspective. But he was correct on the 2008 inflation/commodities headfake, saying repeatedly that deflationary forces would prevail when that was decidedly a minority view. He is also a Euro-skeptic, and I’m less comfortable with that position. The […]
Read more...McClatchy has a breathless piece up on CDOs and other “exotic” transactions that Goldman did in the Caymans (hat tip reader John D). The problem is that the author got his hands on some very solid information (prospectuses of 40 deals) but the story itself is a bit of muddle. While it has some helpful […]
Read more...Goldman is trying to diffuse the increasingly harsh light being turned on its dubious practices in the collateralized debt obligation market, with the wattage turned up considerably last week by a story in the New York Times that described how a synthetic CDO program called Abacus was the means by which Goldman famously went “net […]
Read more...By John Bougearel, author of Riding the Storm Out and Director of Financial and Equity Research for Structural Logic Policymakers managed to extinguish a financial panic in 2008-09 by March 2009. This rescue operation allowed the broad U.S. stock market as measured by the SP500 to rally nearly 70%. Extinguishing the panic was to be […]
Read more...By Bruce Krasting, a former foreign exchange and derivatives trader and hedge fund manager. Mohammad said, “One cannot foretell the future”. I think he was on to something. What looks predictable rarely happens. There are always surprises. I have been tripped up so many times. The following are not predictions of things that will happen. […]
Read more...By Thomas Adams, at Paykin Krieg and Adams, LLP, and a former managing director at Ambac and FGIC. In my view, Goldman, and a host of other clever bankers, are deliberately obscuring one of the most important points about modeling, CDOs and sophisticated investors. One of their defenses against the tremendous losses these products delivered […]
Read more...By Bruce Krasting, a former foreign exchange and derivatives trader and hedge fund manager. I was disappointed with the Christmas Eve ditties from Treasury and FHFA re: the Agencies. To be honest, I was appalled. The two releases contained significant information. The timing was obviously an attempt to slip in some bad news while everyone […]
Read more...The Treasury Department, as reported by Bloomberg, and commented on by Rolfe Winkler and Huffington Post (among others) noted, considerably increased its Freddie and Fannie safety net, by removing all limits on the amounts on offer (an increase from a ceiling of $400 billion) and simultaneously allowing the two GSEs to increase their balance sheets […]
Read more...Gretchen Morgenson and Louise Story have a good article up at the New York Times on synthetic CDOs (or more accurately, synthetic ABS CDOs, for “asset backed securities” CDOs). The press is finally starting to turn some lights onto one of the activities that played an important role in the crisis, but has not gotten […]
Read more...By Thomas Adams, at Paykin Krieg and Adams, LLP, and a former managing director at Ambac and FGIC. Readers may have noticed Janet Tavakoli’s recent article at Huffington Post on Goldman Sachs and AIG. While much of it covers territory that Yves and I already wrote about previously, Ms. Tavakoli stops short of telling the […]
Read more...By Richard Smith, who works for the London consultancy Cubematch, which specialises in risk, collateral and change management The OK The BIS analysis of the 2007-09 banking crisis floats my boat. Here is their headline list of causes: excessive on- and off-balance sheet leverage, diminutive and low quality capital bases, insufficient liquidity buffers at banks. […]
Read more...By Richard Smith, a capital markets and IT consultant There was some really strange stuff going on last week. First, Citi got in a right old tangle. Monday: Citi announce share sale. Pretext: TARP escape. Wednesday: the share sale falls through. Wednesday: it also emerges that the IRS has been quite kind (or at least […]
Read more...By Satyajit Das, a risk consultant and author of Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives In Fed We Trust: Ben Bernanke’s War on the Great Panic by David Wessel Too Big To Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System—and […]
Read more...An op-ed in the Sunday New York Times by former investigators and prosecutors Eliot Spitzer, Frank Parnoy, and William Black calls for AIG to put non-privileged e-mails, accounting documents, and financial models on line to allow for an “open source” investigation. The questions they want to examine include: As fraud investigators, we would like to […]
Read more...By Edward Harrison of Credit Writedowns. This is a modified version of an article I posted yesterday at the Big Picture based on two recent articles I wrote on currency news in the Baltics and the Middle East. The question I ask is this: now that finance is global and capital can move in and […]
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