Newsweek’s “Why is Barney Frank So Effing Mad?” is supposedly about the Congressman from Fidelity but is really about how the banksters are succeeding in neutering financial reform. One Congressional staffer has told me that everyone involved recognizes the measures don’t go far enough, but feel they can’t do much more (Congress can step out […]
Read more...By Richard Alford, a former economist at the New York Fed. Since then, he has worked in the financial industry as a trading floor economist and strategist on both the sell side and the buy side. The Fed has recently come under heavy criticism, largely for its role in the AIG bailout. The Fed deserves […]
Read more...Of late, the Treasury, House, and Senate have put forward proposals for how to resolve large financial institutions. The problem is that none of them seem to deal with the elephant in the room, namely, how the responsible grownups are going to deal with particular creditors and counterparties. For better or worse, bankruptcy procedures are […]
Read more...The United Arab Emirates offered a reassuring statement today after sending a bit more tough-minded message yesterday. The markets will not doubt take heart from the cheery word today, but we need to remind ourselves that the fat lady hasn’t sung yet. Unlike the conduct of banking authorities in the US towards their wayward charges, […]
Read more...By Thomas Adams, at Paykin Krieg and Adams, LLP, and a former managing director at Ambac and FGIC. Many thanks for the thoughtful comments on my earlier post. If you can take a little more on the subject, I thought I would add some clarification to some of the issues raised. First, on the merits […]
Read more...Today, a story about the need to restructure state-owned Dubai World created a bit of a frisson. Dubai is proposing to delay debt payments as it negotiates to extend maturities. According to Bloomberg: Dubai World, with $59 billion of liabilities, is seeking to delay debt payments, sending contracts to protect the emirate against default surging […]
Read more...Yesterday, I went after two targets in one post. The primary one was Andrew Ross Sorkin, who despite the considerable reporting and storytelling skills he demonstrated in Too Big Too Fail, seemed unable to keep a heavy-handed pro-Fed posture out of an article yesterday on the Paul-Grayson-DeMint bill, which more popularly goes by monickers like […]
Read more...Note: this post is by Thomas Adams, at Paykin Krieg and Adams, LLP, and a former managing director at Ambac and FGIC, with some minor additions by yours truly. This is a significant piece of some puzzles he, some other experts who prefer to remain anonymous, and I have been pushing on for several months. […]
Read more...Dear sports fans, your humble blogger, along with a ton of others, got the not-very-embargoed copy of the SIGTARP report on the New York Fed’s conduct with respect to its full payout on AIG’s credit default swaps to its counterparties. The press is treating the report as if it was tough. I was sputtering with […]
Read more...Goldman is a law unto itself, with no respect for propriety or notions like “fair dealing” (which in many contexts supercede particular contractual provisions). The latest incident of Goldman scumminess is in one of the opaque corners of the credit markets, namely, collateralized debt obligations. Goldman launched a major program of synthetic collateralized debt obligations […]
Read more...There is a simply intriguing piece up at Reuters, which may signal a shift in the media version of the zeitgeist as more details of l’affaire Benmosche leak out. By way of background, a very good article at the Financial Times underscores a pet theory of mine: that the board knew exactly what it was […]
Read more...David Einhorn, who enjoys his considerable reputation for hard-fought battles against firms with shaky finances and dubious accounting (Allied Capital and Lehman), has taken aim at a new and equally deserving target: credit default swaps. In an interesting bit of synchronicity, Einhorn’s comments in a letter to investors overlap to a considerable degree with a […]
Read more...As Gillian Tett points out in the Financial Times today, clearing derivatives centrally has come to be viewed in policy circles as a magical solution. As a result, it has not gotten the scrutiny it deserves. The reason for the enthusiasm is that, in theory, a clearinghouse would make sure all agreements were adequately backstopped, […]
Read more...McClatchy, the only major US news organization to question the Iraq war until is was obvious to all that it was a misguided exercise in neocon hubris, has started a series on Goldman’s famed “short subprime” exercise. While the timing and overall outline are not new (as to when and allegedly why the investment bank […]
Read more...Harper’s Magazine has written up the lengths to which the authorities will go in censoring views that dissent with what is the unstated official policy: that no demand of the banking industry is too unreasonable not to be catered to. The object lesson is the gutting of the falsely-branded derivatives reform bill. It arrived with […]
Read more...