One of the things I find truly remarkable is the degree to which Americans (or at least commentary in pretty much all American media) have bought into certain ideological constructs as if they were gospel truth. Now in fact, most of us operate from ideologies of various sorts. For instance, reasonable people can differ on […]
Read more...Let’s see, the credit default swaps market, due to some netting, is now somewhere north of $30 trillion (as opposed to its earlier “north of $60 trillion” level). Investment banks were believed to have hedged most of their exposure via offsetting contracts, but AIG wrote naked protection. And as jAIG itself is at risk of […]
Read more...Let’s see. Citigroup has gotten $45 billion of TARP funds, and backstops on a net of roughly $250 billion of crappy loans after Ciit’s first loss and allowing for the split between Uncle Sam and Citi on the balance. And it is pretty unlikely that we have seen the end of Citi’s funding needs. GM […]
Read more...We have been skeptical that the pending Treasury stress tests on banks, designed to ascertain their state of health, were inadequately staffed and therefore could not do the job properly. Our big concerns were that they had too few bodies to test financial data versus underlying documentation adequately (usually done on a sampling basis) and […]
Read more...Some readers and fellow bloggers have been anticipating an over-the-weekend resolution of some sort for Citigroup and/or Bank of America, given the impressive fall (admittedly from already distressed levels) in their stock prices over the last ten days. I could well be proven wrong, but I didn’t expect it this weekend, and I don’t see […]
Read more...Dear readers, this is a bit of an experiment (think of it as the econblog analogy to open source). When Geithner presented his bank plan, such as it was, I was particularly disgusted by the “public/private partnership plan rubbish. It struck me as a costly way to paper over the irresolvable conundrum with Paulson’s two […]
Read more...Lordie, is this crowd in denial? From the Wall Street Journal (hat tip reader Dwight): Amid fears that Citigroup Inc. and Bank of America Corp. could be on the verge of being nationalized, the White House gave assurances that it prefers banks to remain out of the government’s hands. “This administration continues to strongly believe […]
Read more...I’ve been asserting for some time, based on the comments from mortgage counsellors, that mortgage mods that do not substantially reduce principal balances don’t make enough of a difference to the borrower to change outcomes. And with banks and servicers looking at 40%+ losses on many foreclosures, they can reduce principal a lot and still […]
Read more...Ah, today the Financial Times reminds me of the way it was back in early 2007, when it was clearly heads and shoulders above any US paper. Wonder why I have fewer days like that, It isn’t improved reporting by the US media (although they are further down the curve). I suspect that the FT […]
Read more...By way of background, William Black is a former senior bank regulator, best known for his thwarted but later vindicated efforts to prosecute S&L crisis fraudster Charles Keating. He is currently an Associate Professor of Economics and Law at the University of Missouri – Kansas City. More germane for the purpose of this post, Black […]
Read more...One of our beefs has been the lack of any progress, even interesting trial balloons, on the financial firm reform front. And that’s a serious problem. Economists like to point to the Great Depression as the textbook example that fiscal stimulus works. FDR launches a bunch of spending plans, and voila, by 1936, the economy […]
Read more...It looks like Tim Geithner and Larry Summers are executing a land grab. From the New York Times: President Obama has dropped the idea of appointing a single, powerful “car czar” to oversee the revamping of General Motors and Chrysler and will instead keep the politically delicate task in the hands of his most senior […]
Read more...In case you think my headline is too harsh, consider the one at Bloomberg: “Obama to Work on Executive Pay Limits After Industry Complaints.” So in case you were laboring under the delusion that widespread managerial failure among the nations’ top banks, to the point of being dependent on taxpayer provided drip-feeds among the nation’s […]
Read more...Last week. Bloomberg reported that Volcker, who many regard as the best asset on Obama’s economics team, is sorely underutilized: Paul Volcker has grown increasingly frustrated over delays in setting up the economic advisory group President Barack Obama picked the former Federal Reserve chairman to lead… Volcker, 81, blames Obama’s National Economic Council Director Lawrence […]
Read more...Reader Russell had wondered whether the attorney general of North Carolina might go after Bank of America over the difficult-to-rationalize bonuses paid to Merrill staff, given that the Charlotte bank had signed off on them (failing to inform and obtain consent Bank of America would have been grounds for terminating the deal). I had thought […]
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