Submitted by Rolfe Winkler, publisher of OptionARMageddon The Congressional Oversight Panel released its latest report yesterday. Luckily news outlets reporting on the release (see Bloomberg and Housing Wire) are skipping Warren’s YouTube and Executive summaries–awkward exercises in establishing consensus both of them. They focus instead on the report’s more provocative suggestion, that liquidating failed banks […]
Read more...We have been saying for some time that the policy premise of the Fed and Treasury has been that the financial crisis is that it is a liquidity crisis, not a solvency crisis. If you are of that school, the fallen prices of various assets is due to a combination of scarcity of funding plus […]
Read more...This is going to get interesting. The head of the Congressional Oversight Panel, Elizabeth Warren, is expected to issue a report this week calling on the Treasury to get much tougher with the big recipients of TARP funds. And if the report in the Guardian is right, the recommendations have been softened a tad so […]
Read more...One of the disturbing trends of the financial crisis hasn’t simply been the willy-nilly shifting of costs onto the taxpayer, even when there were investors in risk capital, aka bondholders and stockholders, who properly should take the hit first. As distressing is the repeated, flagrant disregard for the rule of law, starting with the Treasury […]
Read more...Let us go back to some basic principles: 1. Despite bank and Administration smoke-blowing to the contrary, the problem with the so-called toxic assets on bank balance sheets is NOT that they cannot be priced, but that banks do not like the prices on offer from willing buyers. We have read anecdotes suggesting that the […]
Read more...The George Santayana saying, “Those who cannot learn from history are doomed to repeat it,” is so oft repeated as to verge on cliche. Yet the US variant of this syndrome is to be aware of history, then rationalize how it does not apply to us. Japanese policy makers from the early days of the […]
Read more...Is Obama’s leaked view that a “quick and surgical bankruptcy” was a “likely option” for GM and Chrysler form of bizarre brinksmanship? If not, Obama has just painted himself in a corner based on what looks to be some very bad advice. As we will explain below, the notion of a “quick and surgical” bankruptcy […]
Read more...You simply cannot make this stuff up. The Pension Benefit Guaranty Board, which backstops defined benefit plans (yes, Virginia, they still exist) faced a rather sizable gap between its expected returns on its $64 billion in holdings and its expected liabilities. So in a stroke of sheer genius, it increased its allocation to risky assets […]
Read more...Submitted by Edward Harrison of the site Credit Writedowns Edward Harrison here. For months now, we have been hearing the Obama – FDR comparisons, all suggesting that Barack Obama is a modern day Franklin Delano Roosevelt, with the opportunity to lead us out of Depression with a new New Deal. I have some serious problems […]
Read more...Wolfgang Munchau often has a dour outlook, but his Financial Times comment today, “A new plan needed as the cycle grows vicious” is gloomy even by his standards. Munchau argues that the heroic seeming measures to aid the banks are insufficient to compensate for the losses they are and will continue to suffer, and that […]
Read more...Oh, so there was even more to the GM Wagoner resignation than met the eye. So how come no bank turnaround plans? Oh, if they were no good, the government might have to get tough with them. Can’t have that, now can we? From CNBC (hat tip reader Dwight): The announcement by the White House […]
Read more...Business as usual continues in Washington DC. From The Hill (hat tip Tom Ferguson): A new business trade group run by Democrats close to President Obama may offer K Street an avenue into a White House extremely wary of lobbyists. Valerie Jarrett, a senior adviser to and close friend of Obama; Michael Strautmanis, Jarrett’s chief […]
Read more...Submitted by Rolfe Winkler, CFA, publisher of OptionARMageddon We’re not quite as healthy as we thought we were. Oops. (WSJ) J.P. Morgan Chase Chief Executive James Dimon said…that March was a little tougher than the first two months of the year….Bank of America…CEO Kenneth Lewis also said that March had been a tougher month for […]
Read more...Since I haven’t put together a detailed timeline, I run the risk of having the sequence wrong and therefore being at risk of putting foot in mouth and chewing too. But from where I sit, the only person in the US who seems to be doing anything meaningful to try to contain the looting of […]
Read more...We have what is arguably the best Fed chairman ever ready to roll up his sleeves during the worst financial crisis since the 1930s. Team Obama has asked him to work on…..the tax code. From Reuters: A panel led by former Federal Reserve Chairman Paul Volcker will study options for U.S. tax reform and report […]
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