Category Archives: Credit markets

Wolf Richter: Biggest Credit Bubble in History Flashes Warning – ‘Seek Cover’

Wolf Richter and Gillian Tett worry about evidence of credit mania in the US.

SEC Lawyer on Goldman CDO Case Describes How the Agency Wimped Out

Susan Beck at American Lawyer (hat tip Abigail Field) has managed to get an inside view of what was going on at the SEC when it launched its case against Goldman and a Goldman vice president, Fabrice Tourre, over a Goldman CDO called Abacus that went spectacularly bad. So was the SEC corrupt or merely incompetent?

David Dayen: How Chase Bank Denying Services to a Condom Shop Is Really About Deregulating Payday Lending

Under the odd conventions of journalism, if someone else writes about a topic, especially if it resembles a “scoop,” nobody else can write about it. So if you go down the road for a week or so chasing a story and then you see it in your friendly neighborhood copy of The Huffington Post, you can basically stop chasing. Thanks for taking food out of my mouth, HuffPo!

But in this case, the complicated story in question warrants more attention, because it’s a really good lesson in how “lobbying” incorporates more than just paying rich people in suits to sweet-talk politicians and regulators. This is the darker side of lobbying, with the venerated “small business owners” everyone loves to deify caught in the crossfire.

The SEC Finally Takes an Interest in Collateralized Loan Obligations

The old saying is “better late than never,” but as we hope to demonstrate, the SEC is awfully late to take an interest in collateralized loan obligations. The problems it has gotten curious about now were discernible years ago. And the failure to take interest until now means that misbehavior that was discussed in the press during the crisis is almost certain to go unpunished, since the statute of limitations for securities law violations has passed.

Philip Pilkington: Bank of England Endorses Post-Keynesian Endogenous Money Theory

Yves here. Not only is the Bank of England siding with Post-Keynesian ideas about money, but it has even taken to creating layperson-friendly videos about the nature of money.

Is UCC Article 9 Going to Kill the Use of Bitcoin by US Businesses?

Warning to Bitcoin enthusiasts: if you airily try dismissing UCC Article 9 as a nothigburger, you’ve just established you are unqualified to comment on commercial transactions in the US. Read what follows and be warned.

Bill Black at TED Explains How Insiders Rob Banks and Cause Crises

A presentation by Bill Black disproves that TED only features elite-flattering conventional wisdom.

New In-Depth Study Shows How Debt Collectors Abuse Legal System and Borrowers

The Loyola Consumer Law Review has just released an important paper by Peter Holland of the University of Maryland Francis School of Law. It’s a large scale statistical study, the first of its kind. Its conclusions are not pretty.

Matt Stoller: Big Oil Hooked Americans on Credit Cards

The credit card industry gets short shrift when it comes to history.

Chinese Bond Default Rattles Markets; Harbinger of More Credit Woes?

A corporate bond default should hardly be a headline dominating-event unless the default in question is of a particularly large concern, or is tightly coupled (as in could, Lehman-style, trigger more distress) or is a precursor of things to come.

Quelle Surprise! Banks Are Opposed to More Liquid Markets When They Don’t Make Enough From Them

Bloomberg has an intriguing story about a bit of lobbying the big dealer banks are engaged in via a group called the Treasury Borrowing Advisory Committee, which represents 15 out of the total of 22 primary dealers (a primary dealer, among other things, gets to bid for its own account at Treasury bond auctions). Of course, the object of their efforts is to improve their profitability, here by putting parties they regard as competitors at more of a disadvantage.

Rental Income Falls 7.6% in Three Months in Blackstone’s First Home Lease Securitization

A Blackstone deal in the runup to the financial crisis, its acquisition of Equity Office Properties Trust from Sam Zell in early 2007 was recognized at the time as a sign of a market peak. Is history about to repeat itself with Blackstone’s rental securitization?

Versailles Watch: John Mack Whines About How Badly Wall Street CEOs are Treated

You cannot make this stuff up.

Pimco, Blackrock Mulling Suing Ocwen Over Abusive Servicing

Funny what a difference a few days makes.

The Debt Crisis in Puerto Rico: Why Is It Not More Newsworthy?

The escalating debt crisis in Puerto Rico, where default or bankruptcy look to be likely outcomes, has gotten only cursory notice from the media. That’s quite an oversight when you look at the size and potential impact.