Nouriel Roubini has officially left the “hedging your bets on the economy” camp. He has declared the markets to be frothy because super low dollar borrowing rates have turned the greenback into the funding currency for the carry trade. Far more important than the peppy rally in the stock market is the resumption of early […]
Read more...By George Washington of Washington’s Blog. Ron Paul tells Bloomberg that Congressman Watt has just more or less killed the bill to audit the fed: Representative Ron Paul, the Texas Republican who has called for an end to the Federal Reserve, said legislation he introduced to audit monetary policy has been “gutted” while moving toward […]
Read more...By George Washington of Washington’s Blog. When a liberal labor leader and a conservative financial policy analyst unite against something, you know that something is really bad (actually, I don’t believe in the whole false left-right dichotomy; I think its Americans versus those trying to steal our wallets and our rights, but that’s another story). […]
Read more...Wow, I should not be surprised, but this is a stunner nevertheless. It had generally been assumed that the AIG payouts of 100% on credit swaps (when the insurer was under water and bankrupt companies do not satisfy their obligations in full) was the result of some gap in oversight plus traders at AIG exercising […]
Read more...By Richard Alford, a former economist at the New York Fed. Since them, he has worked in the financial industry as a trading floor economist and strategist on both the sell side and the buy side. It has been frequently charged that the Fed, under Alan Greenspan and Ben Bernanke, kept interest rates too low […]
Read more...By Edward Harrison of Credit Writedowns I just came across a post on Zero Hedge called “An Overview Of The Fed’s Intervention In Equity Markets Via The Primary Dealer Credit Facility.” Now, that’s a mouthful. As far as I can discern, the post’s purpose is to expose alleged equities market manipulation by the Federal Reserve. […]
Read more...By Richard Alford, a former economist at the New York Fed. Since them, he has worked in the financial industry as a trading floor economist and strategist on both the sell side and the buy side. The need to address and prevent future large global economic and financial imbalances is back on center stage, but […]
Read more...A lot of investors I know lamented the loss of Gillian Tett. As the Financial Times’ capital markets editor in the runup to the crisis, she had provided very insightful commentary on some of the more arcane goings-on in the financial markets. I’ve had reason to look at her older commentary (circa 2004-2005) and some […]
Read more...You are a teacher at a local primary school. Each school day you and some of your colleagues watch over the children at the school playground to make sure all of the children follow the rules and keep their hands to themselves. Your role is to keep the children safe. Mind you, this is a […]
Read more...Watch the hour-long retrospective which aired last night on PBS’s Frontline. It should be very enlightening in regards to the seeds of the bubble and meltdown. It examines who the players in the 1990s and 2000s were, what their attitude to regulation was, and how lax regulation created a bubble and a bust. Also see […]
Read more...The New York Times published an edited extract from Andrew Ross Sorkin’s Too Big Too Fail (man, that book is so large, they can release a ton in advance and still have a book and a half of reading left over). This section is on some of Dick Fuld’s efforts to save Lehman. The Japanese […]
Read more...Wolfgang Munchau has a solid, thoughtful piece at the Financial Times which argues that the widely applauded rallies in stock and commodity markets are already looking very much like bubbles, and the efforts to contend with them (either directly, or as a result of the need to start reining in liquidity) is likely to kick […]
Read more...A Bloomberg headline tonight is uncharacteristically alarmist: “Dollar Reaches Breaking Point as Banks Shift Reserves.” However, while the article is correct to point to lack of enthusiasm for the dollar, it presents, but then fails to integrate, a key point: foreign central banks are not cutting dollar holdings. In fact, they are still increasing buying […]
Read more...An unannounced but evidently coordinated effort to arrest or at least slow the fall of the dollar is underway. The Financial Times indicated that Asian central banks were aggressive dollar buyers on Thursday, but the information came via currency traders rather than an official pronouncement. Thailand, Malaysia and Taiwan made substantial purchases; Hong Kong and […]
Read more...The New York Times has a good update on the progress, or more accurately, lack thereof, in the efforts to return to normalcy in the credit markets. The story highlights the fact that the securitization markets, to the extent they are operating, are heavily dependent on government intervention and it does not appear likely that […]
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