Several readers pointed to a recent post by Michael Pettis, which mainly discussed how expected wage increases in China are a hopeful sign that China is taking steps to become more consumption-oriented. But as much as this is a move forward, changing the mix of China’s composition of demand is at least a decade-long project […]
Read more...Folks, the time has come when I must start shamelessly promoting my book, Econned: How Unenlightened Self Interest Undermined Democracy and Corrupted Capitalism, which is being released March 2, 2010. I thought the extract below would give readers an idea of what the book is about, with one caveat. Econned goes into some detail about […]
Read more...A fair number of policy commentators are hewing to the view that somehow the EU will cobble together some sort of solution to the Greek fiscal mess because the alternatives look vasty worse. As Paul Krugman noted: Now what? A breakup of the euro is very nearly unthinkable, as a sheer matter of practicality. As […]
Read more...As readers no doubt know all too well, the market premium versus safer ones contracts in robust times and widens in downturns. And since credit markets typically signal downturns months before the equity markets, junk bonds are one place to look for advance warnings of changes in economic fortunes (albeit with a risk of false […]
Read more...In a New York Times op-ed late last year, Bill Black, Frank Partnoy, and Eliot Spitzer called for an open source investigation: we know where the answers are. They are in the trove of e-mail messages still backed up on A.I.G. servers, as well as in the key internal accounting documents and financial models generated […]
Read more...Can someone shut these banking industry narcissists up? The one and only time I met Steve Schwarzman was in 1986, when he and Pete Peterson had just started the Blackstone Group. I was a manager (meaning a mid level working oar) at McKinsey. We had teed up a deal and were assisting our foreign client […]
Read more...The top story at the Financial Times at this hour, “‘Volcker rule’ gives Goldman stark choice,” is a accurate report of Paul Volcker’s latest remarks, but gives a wildly misleading impression of the “choice” facing Goldman: Goldman Sachs and other banks should give up their bank status if they want to avoid the ban on […]
Read more...The February report from the Congressional Oversight Panel makes for sobering reading. It forecasts $200 to $300 billion in losses coming from commercial real estate loans, and notes these were not considered in the famed stress tests, since that process looked only through 2010, when the losses from CRE will peak later. Some snippets (hat […]
Read more...Victor Shih has done some serious analytical work to try to get a handle on the magnitude of China’s local debt. His post, which included extracts from his op-ed in the Asian Wall Street Journal, shows that some of the narratives about China are woefully incomplete. The whole post is very much worth reading, but […]
Read more...I’m late to this, as everyone with an operating brain cell, starting with Simon Johnson to Paul Krugman is duly horrified by the remarks that Obama made in a Bloomberg interview, published this AM: President Barack Obama said he doesn’t “begrudge” the $17 million bonus awarded to JPMorgan Chase & Co. Chief Executive Officer Jamie […]
Read more...By Tim Iacono, who publishes a weekly investment newsletter on natural resources and the blog The Mess That Greenspan Made It seems that, once again, former Fed Chief Alan Greenspan has grown tired of listening to his critics who have increasingly laid blame at his feet for the inflation of (and, more importantly, the subsequent […]
Read more...On the one hand, as we noted in an earlier post, EU president Herman Van Rompuy has made no bones about his view that the EU needs to have more clout in economic affairs. Per the Telegraph: Herman Van Rompuy, the EU’s new president, has submitted a text calling for the creation of an “economic […]
Read more...We remarked last week that the FDIC had put forward a proposal for fixing the securitization market. To be a bit more precise, it was the FDIC’s plan, put forward for public comment, of the rules it wanted to have in place for banks to get “safe harbor”, meaning off balance sheet treatment, for their […]
Read more...Boy, is this a down-market move for former Merrill CEO John Thain, both in terms of size of balance sheet and credit focus of the organization. CIT, which focuses on small and medium-sized business lending, had a roughly $70 billion balance sheet as of end of September, versus nearly $670 billion for Merrill as of […]
Read more...By Yves Smith and Tom Adams, an attorney and former monoline executive Gretchen Morgenson has a lengthy article tonight at the New York Times, “Testy Conflict With Goldman Helped Push A.I.G. to Edge.” While it provides some useful new tidbits, it peculiarly focuses on an aspect of Goldman’s dealings with AIG that, particularly with the […]
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