Reap what you sow. Over the last 20 years, the ever-aggressive Wall Street culture has moved even further towards prizing, and paying for, individual performance. Even at the famously team oriented Goldman, after the trading side of the firm became the dominant profit engine, top executives would reportedly describe the investment banking side as “socialist” […]
Read more...In the stone ages, when I worked for a short while at Goldman, it would have been unthinkable to trade openly against clients. But those proprieties were abandoned long ago. In 2007, the firm was unapologetic about its decision to short the subprime market (a big, perhaps the big reason for its departure from industry […]
Read more...I have not made a formal tally of Roubini’s various lists of why the economy is going (and will continue to go) to hell in a handbasket, but recent sightings suggest his typical list is eight to twelve reasons. However, in his latest missive, on the subject of why the consumer is toast, Roubini outdoes […]
Read more...It is remarkable (and admittedly late, but late is better than never) that Congress is developing a spine and pushing back at Hank Paulson’s unprecedented land grab. Even better they got mad at something that made your humble blogger nuts. Trust me, I am highly confident that no Congressional aide picked up on the issue […]
Read more...One of the underlying assumptions of the Fed’s and many other central banks’ response to the credit crisis is that it can be halted, and hopefully remedied, by having the government backstop the troubled financial sector. One template is not to repeat the supposed mistakes of the Great Depression and Japan’s post bubble era, where […]
Read more...What is intriguing about this article describing the likelihood of more synthetic CDO woes is that no one has a grip on how big a problem this might be and who might be exposed. From the Financial Times: Synthetic CDOs, the risky and complex debt products that are based on pools of corporate credit derivatives, […]
Read more...Heizo Takenaka, who held various posts in Junichiro Koizumi’s cabinet and is now director of the Global Security Research Institute at Keio University, provides a far reaching list of financial reforms. One can quibble with his count (he describes them as 11, but items one and four are two approaches to the same issue) and […]
Read more...In the wake of the Treasury Department foisting equity infusions onto nine banks, not all of which wanted or needed them, the industry has decided to get in front of these initiatives. The latest bright idea. of guarantees of bank debt, gets a thumbs down from the intended beneficiaries. But sadly, it isn’t the general […]
Read more...The markets in the US did not take at all well to Henry Paulson’s announcement that he wanted to get his hands on the rest of the TARP allotment (a remaining $350 billion) and spend it so as to help consumers go to the mall again. As one correspondend, Andrew, noted: 1) Is the dog-chasing-its-tail […]
Read more...Too many hot button financial news stories tonight, generally not a good sign for the short-term market outlook. GM is twisting in the breeze, saying it won’t make it through year end without help, but the Bush administration, which has been liberal with aid to anyone who can pretend to be remotely connected to the […]
Read more...The latest back-handed insult may be yet another variant of the Bush “we don’t do multilateralism” syndrome. Unfortunately, as various pundits writing at the Financial Times have pointed out, the US’s stranglehold on power is slipping. Even Obama in the campaign repeatedly said that a country cannot maintain military dominance if it is not a […]
Read more...Last night, we posted a VoxEU article on the unraveling of Iceland that (among other things) said that the problem was that the financial sector had gotten so large that the government could not possibly rescue it. The author made a comment in passing that indicated he thought this was not a problem shared by […]
Read more...Note that the headline above was on a Wall Street Journal story about the new taxpayer-raping improved version of the AIG bailout. The current headline is anodyne: “New AIG Rescue Is Bank Blessing.” Just as one wonders why the government backed down on a deal that was appropriately punitive to AIG (at worst, it was […]
Read more...There are some cool charts, and a useful discussion of the continuing travails of Fannie Mae, at EconomPic Data. Let me give you the high points to induce you to read the rest of the post: Fannie Mae lost a reported $29 Billion in Q3. Over the past 7 quarters, they have now lost ALL […]
Read more...Many years ago, when I was in business school, one of the courses was taught by George Cabot Lodge. He said he could remember distinctly the day in 1968 that it occurred to him that the US could not simultaneously end poverty, send a man to the moon, and fight a ground war in Asia, […]
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