This post first appeared on August 27, 2007 Recently, we’ve noticed a new theme among economics writers: Extreme Measures. Commentators have looked toward the end of the road we are on and fear it leads to a precipice. Hence the calls for radical course correction. Paul Krugman and Bill Gross of Pimco, each of whom […]
Read more...By Yves Smith and Tom Adams, an attorney and former monoline executive Update and correction 4:45 PM: We owe an apology to readers and to Louise Story of the New York Times, for an apparent error in our analysis. We have been informed that, remarkably, there were two separate Pyxis vehicles which were issued in […]
Read more...Is it any surprise that Wall Street went a bit off the deep end with the (admittedly barmy, but that’s a separate issue) Blanche Lincoln proposal to spin off derivatives desks? Derivatives, which are now deeply integrated in how dealer banks devise customer transactions and how they manage their own risks, are a large proportion […]
Read more...Even in this TARP and Fed supported, “heads I win, tails you lose” of the banking industry, the “you live by the sword, you die by the sword” element has not been entirely removed. Witness the schadenfreude-gratifying distress at JP Morgan’s commodities unit, headed by Blythe Masters (a supersaleswoman who has already gotten a fair […]
Read more...Augmenting Ed’s recent links re Tom Adams, regular readers will remember Yves got a magazine cover and write-up in Calcalist. Now Tom Adams, another contributor to “Naked Capitalism”, (and ECONned helper, Magnetar sleuth, etc etc), has got a writeup by Calcalist. The main article is here, and it’s all in Hebrew, which Google Translate struggles […]
Read more...Cross-posted from New Deal 2.0 By Wallace C. Turbeville, the former CEO of VMAC LLC, and a former Vice President of Goldman, Sachs & Co. The current system of trader compensation will continue to decay the heart of Wall Street. Which is a greater threat to the nation — terrorism or the relentless decline of […]
Read more...Felix guessed how this Structured Finance issue pipeline would get sorted out, for the moment. Three not necessarily inconsistent takes on causes and effects: A neat way to embarrass the government. The rating agency logjam and the GM deal announced yesterday are closely related: if there’s one thing GM will think it still needs for […]
Read more...Richard covering for Yves here, in case that maritime internet connection, which seems OK for terse emails, is not so great for navigating 100 eurowebsites, to whizz through as much detail as possible. Just seven failures, making Chris Whalen’s EU stress tests: who knows, who cares? the main takeaway, I suppose. Not enough blood to […]
Read more...Little rumor that the SEC “is giving asset-backed bond issuers a 6-month reprieve on quoting ratings, hoping to stem fears of another market freeze”. Fawn Johnson of Dow Jones, on Twitter, via a kind helper. Update: Yup, it’s a blink. AP H/t Mindrayge and others.
Read more...This post first appeared on March 14, 2007 One of today’s lessons is to have greater courage in my convictions. In a number of earlier posts (such as “The Rising Tide of Liquidity,” part 2 and part 3 of the same, “Where Has the (Perception of) Risk Gone“) I pointed to how toppy the markets […]
Read more...A surprise for the ratings agencies, the bond market, and me, too – this has to be a late change in the Financial Reform bill, and it’s a corker. From the WSJ: The nation’s three dominant credit-ratings providers have made an urgent new request of their clients: Please don’t use our credit ratings. The odd […]
Read more...Joint post by Richard Smith and Tom Adams, a securities lawyer The fabulous Fab has entered his solo response to the SEC’s complaint. It provides an interesting glimpse into what are certainly complex legal strategies by Tourre, Goldman and the SEC. The list of his stated defenses are at the bottom. First, the response may […]
Read more...This post first appeared on February 18, 2007 Mirable dictu, a Wall Street Journal editorial, “How Expansions Die,” that, for the most part, has a solid foundation in reality. Although the WSJ’s news pages have been reporting on the meltdown in the subprime mortgage market (admittedly somewhat less intently than the Financial Times), both the […]
Read more...Back to this thing to try to work out what it’s driving at. Yves wrote: I have serious trouble with its bottom line: We document that the shadow banking system became severely strained during the financial crisis because, like traditional banks, shadow banks conduct credit, maturity, and liquidity transformation, but unlike traditional financial intermediaries, they […]
Read more...By Tom Adams, an attorney and former monoline executive and Yves Smith A common fallacy is to assume that situations are polar: win/lose, black/white, hot/cold, heads/tails. But more often, given A, “not A” is not the opposite of A. Conventional wisdom in the financial media is that the settlement announced by the SEC over its […]
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