Category Archives: Politics

AIG: Hearings Present Evidence That Management Disguised Losses

From coverage of Congressional hearings in the New York Times (hat tip reader Tom): [Former AIG CEO Martin} Sullivan also came under fire for reassuring shareholders about the health of the company last December, just days after its auditor, Pricewaterhouse Cooper, warned of him that AIG was displaying ”material weakness” in its huge exposure to […]

A Glimpse Into the Abyss

I must confess a certain fondness for the apocalyptic sort of financial writer, provided they don’t lose anchoring with reality and fall into the tinfoil hat category. Nouriel Roubini is the case example of an economist who favors a baroque, melodramatic style, and despite sounding more than a tad unhinged at points, he has proven […]

Wolfgang Munchau: Europe Needs a Bank Rescue Plan

Wolfgang Munchau, who writes for the Financial Times and the blog EuroIntelligence, argues that the fact that EU member nations managed to survive their first series of bank failures does not mean it can afford to take the risk of defaulting to continued improvisation. Munchau comes out squarely in favor of a coordinated, funded rescue […]

European Leaders Promise to Save Major Banks, But Fail to Adopt EU Plan

So far, the statement released this afternoon US time out of a Euro summit amounts to an attempt at reassuring hand-waving but in fact was merely a restatement of the status quo. The group of European leaders did agree on a set of principles, but it remains an open question whether they will be able […]

Hypo Bank Rescue Fails, Threatening Lehman Scale Bankruptcy, Future of Euro

Hypo Real Estate, Germany’s second largest real estate lender, teeters on the verge of collapse. The bank has a €400 billion balance sheet, which would make for a failure of a similar scale to Lehman’s (Hypo’s footings are roughly $550 billion, while Lehman’s were $660 billion as of its last balance sheet date). Even though […]

Bailout Bill Passed by House

From the Wall Street Journal: U.S. House of Representatives lawmakers wary of growing signs of the nation’s economic distress voted in favor of a $700 billion Wall Street rescue package on Friday, sending the biggest government intervention in the financial markets since the Great Depression to President George W. Bush for his signature. The vote […]

Greece Scuttles €300 Billion Rescue Plan, Guarantees Bank Deposits

Yet another subject of worry is whether the global financial crisis will fracture the EU fatally. While the ECB coordinated rescue of Fortis was a positive sign, Ireland’s move to guarantee all bank deposits was a blow, since it is drawing funds from EU institutions to Irish ones. French president Sarkozy had proposed a 300 […]

Will Euro Bank Woes Take Down the EU?

We have been asserting for many moons that despite having lower incidence of US style, “another quarter, another writedown” behavior, European banks are actually in weaker condition than their US counterparts. That’s based on the view of a buddy who has top level regulatory connections here and in Europe, and it seems plausible given the […]

Bailout Bill To Make Money Market Liquidity Crunch Worse?

Boy, I wish I had thought of this, and why no one else save some smart readers have focused on the mechanics of the Paulson plan operations is beyond me. This bill is moving ahead like the Titanic…..with high odds of similar outcomes. Hoisted from comments, we turn the mike over to reader Don: The […]

More on the Oinking Bailout Bill

More detail on all the lovely goodies larded in via Karim Bardeesy at The Big Money (both someone at TBM and reader Jennifer pointed out the piece). Note that this is a partial list: DIVISION C-TAX EXTENDERS AND ALTERNATIVE MINIMUM TAX RELIEF SEC. 308. INCREASE IN LIMIT ON COVER OVER OF RUM EXCISE TAX TO […]

We Chat on Bloggingheads with Megan McArdle on the Credit Crisis

Here’s a clip: Boy, do I need to get better at looking at the lens. FWIW, this is all done with a computer camera (unlike videotaping or TV) so you only have a teeny light to look at, and you clearly need to keep your eyes locked on it not to look peculiar. Better luck […]

Takes on the New, Porked-Up Bailout Bill

This comes from an e-mail titled, “It’s worse than I thought,” from a reader with a good deal of inside-the-Beltway experience: It’s Christmas…This has NOTHING TO DO WITH THE ORIGINAL CONCEPT. In fact very little has really been changed with respect to the original Paulson plan…The new PIG has everything to do with Senate Finance. […]

Calls to Congressmen Running in Favor of Bailout Bill

Despite the hue and cry among the officialdom in favor of the bailout bill, the reading we have gotten from professional investors, some of them with very high level connections, and economists among our readership and personal network is strongly negative. Nevertheless, by making the bill a de facto ultimatum (“do this or we do […]

An Assessment of Bailout Bill Options from a Former Congressional Staffer

Our reader and sometimes contributor Lune worked on the Hill and was so kind as to send us his take on the choices facing the Senate and House leadership on the bailout bill, His position on it is rather clear: While many of you may be popping champagne bottles tonight in honor of the bailout […]

Wow, the Mother of All Bailouts Failed to Pass the House (Further Update: Carnage Assessments)

I’m actually quite surprised. The stock market in a panic. I wonder whether Paulson and Bernanke have a Plan B. Jamie Galbraith outlined a good interim idea (needs tweaking but has merit) in the Washington Post last week. Hope someone paid attention. From Bloomberg: U.S. stocks plunged and the Standard & Poor’s 500 Index tumbled […]