Michael Lewis has a generally very good piece in Vanity Fair on the AIG Financial Products mess, filing in some bits that were missing from the equation. He does go a bit overboard in saying nice things about Jake DeSantis, the man who wrote the New York Times “Dear AIG: I Quit!” op ed. To […]
Read more...The dour consumer sentiment readings said that the great unwashed are smarter than the financial talking heads. They had ceased to be impressed with the “green shoots” theory. Lo and behold, worse than expected employment data has proven them right. We’ve pointed out that the Carmen Reinhart/Kenneth Rogoff analysis of past severe financial crises suggests […]
Read more...Martin Wolf is pessimistic about the whether the financial system can be reformed, but nevertheless offers some toughminded suggestions. Oddly, he seems to see the big obstacles not as political, but as practical, that markets are too big and interconnected, and sees that as an intractable problem. I agree that it will almost certainly not […]
Read more...Remember SIVs, financial public enemy number one of late 2007? Henry Paulson spent a lot of time failing around trying to come up with a remedy that involved only the government knocking heads together. That was a resoudnig Then it appeared that everyone shrugged their shoulders and decided this wasn’t such a big deal after […]
Read more...The Bank of International Settlements, mindful of the importance of its role, would never say anything as crass as the translation I offered in the headline. But that is nevertheless a message in its newly-released annual report. From the Guardian (hat tip reader DoctoRx): Taxpayers around the world still face potentially large losses because governments […]
Read more...If Alan Greenspan were serious about rehabilitating himself, he could hire himself out to central banks and instruct their officials in the art of Looking Serous and Appearing to Say Important Things While Actually Communicating Nothing. This is a crucial skill for anyone in an important bureaucratic position. The Chinese could use a few lessons. […]
Read more...There are some interesting things one learns in putting together a book. Blogging is a lot like working in watercolors, speed and confidence in execution are key, versus the oil-painting medium of a book. And you learn how many times you wind up scraping the canvas and reworking. I’m up to the sixth revision of […]
Read more...Submitted by Knute Knutson: As I imagine many of your are, I’m an avid reader of Gillian Tett’s Financial Times columns, I therefore purchased her recent book, Fool’s Gold: How the Bold Dream of a Small Tribe at J.P. Morgan Was Corrupted by Wall Street Greed and Unleashed a Catastrophe, shortly after its release. Ms. […]
Read more...What amounted to a statement of principles and a very few stakes in the ground from Timothy Geithner on financial reform got a largely hostile reaction from Congress (see Ed Harrison here and here for further detail). The main criticism was that the notion of making the Fed the uber stability regulator/financial system overseer (officially, […]
Read more...The Treasury Department’s plans for securitization reform are being bandied about in the press. A key question is whether it can or will fix the now-broken private securitization process. Credit became more dependent on securitization than many realize. By pretty much any metric, the role of banks relative to other players has declined since 1980, […]
Read more...Submitted by Rolfe Winkler, publisher of OptionARMageddon So much for de-leveraging…The Fed published its latest Flow of Funds report today. One key takeaway: While total debt is growing more slowly, it is still growing. Since Q3 ’08 households have cut their debt (slightly), but the federal government is borrowing so rapidly, overall debt continues to […]
Read more...Readers have been sending various Pangloss/Orwell sightings on a daily basis, with one’s take on whether they fall in the absurdist or merely creeping authoritarian camp depending on one’s degree of cynicism. I have only posed about 1/10th of them simply because it often takes a fair bit of parsing (headline v. meaningful comment close […]
Read more...Yesterday, we highlighted yet another indication that one of two parts of the infamous Public Private Investment Partnership, the so called Legacy Loans Program, was being delayed, possibly on a permanent basis (or more likely, it will be launched eventually to save bureaucratic face and have weak to non-existent take-up). Its evil twin, the program […]
Read more...One of the things that has intrigued me about the financial crisis is that it is pretty clear that looting took place at the high end of the financial services industry, yet few have called it by that name, in part because it has been difficult to identify the mechanisms by which it occurred. Looting, […]
Read more...Submitted by Edward Harrison of the site Credit Writedowns. PIMCO’s founder Bill Gross is out with his latest monthly missive. It makes for interesting reading, especially in regards to the captains of finance and their desire to stay rich using other people’s money. I remember as a child my parents telling me, perhaps resentfully, that […]
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