By Tom Adams, an attorney and former monoline executive; Andrew Dittmer, a mathematician who has worked for a hedge fund; Richard Smith, a UK-based capital markets IT consultant, and Yves Smith As described in ECONNED and in later reports by ProPublica, a Chicago-based hedge fund, Magnetar Capital, entered into a program of sponsoring subprime-based CDOs […]
Read more...By Tom Adams, an attorney and former monoline executive One of the ongoing myths of the financial crisis is that investor demand was what motivated the creation of so many bad securities. Banks, journalists and academics have all described the period prior to the crisis as a period of “insatiable investor demand” for things like […]
Read more...Independent Strategy’s latest report, “China’s credit bubble: the missing piece in the jigsaw” makes a persuasive case that China’s debt fueled growth model is due for a hard landing, but the timing is uncertain, since the debt is funded internally. China is barely past an episode of dealing with banks chock full of bad loans […]
Read more...Enjoy! Below is a related discussion by Ann Rutledge of R&R Consulting, another structured credit expert:
Read more...Rampant fraud in the mortgage industry has increased so sharply that the FBI warned Friday of an "epidemic" of financial crimes which, if not curtailed, could become "the next S&L crisis." Assistant FBI Director Chris Swecker said the booming mortgage market, fueled by low interest rates and soaring home values, has attracted unscrupulous professionals and […]
Read more...The current number one non-fiction best seller, Michael Lewis’ The Big Short: Inside the Doomsday Machine, addresses the question “Who got it right? Who saw the real estate market for the black hole it would become, and eventually made billions from that perception?” It is hailed as meeting the usual Lewis high standards of engaging […]
Read more...A post by Edward Harrison. Edward Chancellor, author of the seminal book on financial speculation and manias “Devil Take The Hindmost,” is now turning his eyes to China. He sees a number of red flags which point to excess in China. Chancellor writes: In the aftermath of the credit crunch, the outlook for most developed […]
Read more...By Tim Duncan, Chairman of American Business Leaders for Financial Reform Financial regulatory reform was starting to feel a lot like a political version of the movie Groundhog Day. Like Bill Murray’s character in the movie – forced inexplicably to live the same day over and over until he learned from his mistakes – the […]
Read more...A post by Edward Harrison About a month ago I wrote a post called “The coming wave of second mortgage writedowns” the gist of which was that the big four banks (Citi, JP, BofA, and Wells) had a shed load of exposure to now worthless second mortgages. With many first mortgages now hopelessly underwater, it […]
Read more...By Tom Adams, an attorney and former monoline executive I’m usually cynical about these “genius of Wall Street” articles, but the Vanity Fair article “Larry Fink’s $12 Trillion Shadow” by Suzanna Andrews, about the head of the world’s largest money manager, BlackRock, raises the cliche to another level. My skepticism results both from the disconnect […]
Read more...I felt certain when I read the Financial Times headline, “Proposal sees consumer watchdog role for Fed,” that I must have woken up in a bizarre parallel universe (but that is probably unfair to pretty much all universes parallel to ours: I imagine it would be very difficult to have one more perverse than ours). […]
Read more...The February report from the Congressional Oversight Panel makes for sobering reading. It forecasts $200 to $300 billion in losses coming from commercial real estate loans, and notes these were not considered in the famed stress tests, since that process looked only through 2010, when the losses from CRE will peak later. Some snippets (hat […]
Read more...By Tim Iacono, who publishes a weekly investment newsletter on natural resources and the blog The Mess That Greenspan Made It seems that, once again, former Fed Chief Alan Greenspan has grown tired of listening to his critics who have increasingly laid blame at his feet for the inflation of (and, more importantly, the subsequent […]
Read more...By Edward Harrison of Credit Writedowns In the lead-up to the credit crisis, I really didn’t write a considerable amount about second mortgages despite my focus on credit writedowns. At that time, I was more focused on writedowns from securitized mortgage paper (and later construction loans and commercial real estate because of the stress these […]
Read more...We remarked last week that the FDIC had put forward a proposal for fixing the securitization market. To be a bit more precise, it was the FDIC’s plan, put forward for public comment, of the rules it wanted to have in place for banks to get “safe harbor”, meaning off balance sheet treatment, for their […]
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