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 […]
Read more...Submitted by Edward Harrison of the site Credit Writedowns. As I write this, the U.S. dollar has fallen to new 8-month lows against the British Pound and oil. Sterling is up over 2 big figures to 1.6371 while oil (WTI crude front month contract) has marched up near $68 a barrel. Clearly the sell the […]
Read more...Submitted by Rolfe Winkler, publisher of OptionARMageddonBack in February, amidst the neo-Keynesian rage to spend our way out of recession, I argued that stimulus wouldn’t stimulate. Pointing to the graph of the 10-year Treasury vs. 30-year mortgage rates I said that the government wouldn’t be able to flood the market with Treasurys without driving up […]
Read more...The Fed has a mess on its hands. Yields on ten and thirty year Treasuries have shot up in the last few days as investors have become fixated on burgeoning Treasury supply in coming months and years. and, as belief in the “green shoots” story is rising, a shift to riskier assets. In addition, while […]
Read more...To be perfectly clear (as one discredited President was fond of saying), It would appear that the Treasury has a pretty considerable supply problem that is starting to hit now. Longer dated bonds slid in a serious way late last week and had another bad day today (although the 2 year action went well). And […]
Read more...An interesting piece in Bloomberg contends that the record low level of Libor, which would say that everything is hunky dory as far as banks lending to each other is concerned, is in fact giving a misleading picture. The spread among rates quoted is close to its highest level for the year, indicating some banks […]
Read more...Uncharacteristically for an economist, Wolfgang Munchau questions the conventional remedy for the debt millstone: use inflation to trash its value in real terms. Bondholders so often get shafted that it’s a predictable outcome. But is it wise? Munchau argues that regardless, the piper must be paid. If the powers that be succeed in creating meaningful […]
Read more...I always enjoy reading the Financial Times’ editor, Martin Wolf, but I sometime forget how refreshing and pointed he can be when he decides to let loose at a deserving target. Today’s lesson is the almost ludicrous efforts of the financial services industry to explain why the debacle that they just foisted on all of […]
Read more...The notorious Public Private Investment Partnership, aka “Son of MLEC,” was supposed to be up and running as of early May but its debut has instead been pushed off to July. The need to sort out some details is the official reason for the delay, but the Financial Times’ Gillian Tett says that the banks […]
Read more...Alan Greenspan tells us today that he sees signs of the housing market bottoming. The Financial Times tells us that delinquencies are increasing in prime mortgages, which are even harder to modify than subprime. I am beginning to get tired of the new mortgage lingo, or rather, the slippage of old mortgage lingo. In the […]
Read more...It only takes opposition by 10% of the bondholders to stymie an out-of-court restructuring of GM. The FT believes that there are enough bondholders who, via being net short GM bonds via credit default swaps, have good reason to block a negotiated outcome and force the automaker into bankruptcy. And that poses risk to the […]
Read more...Benjamin Friedman, in a review of George Akerlof and Robert Shiller’s Animal Spirits, makes an interesting observation: As in past financial declines, what is sorely missing in this discussion is attention to what function the financial system is supposed to perform in the economy and how well it has been doing it. Today attention is […]
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