This post appeared originally on July 27, 2007 Warning: this post is only for those with sound constitutions. Tim Lee, head of a financial economics consultancy, tells us in a Financial Times article what a carry trade unwind will look like (answer: very nasty) and what it would take to prevent it (the Japanese have […]
Read more...Nassim Nicholas Taleb has an intriguing piece at Huffington Post, “The Regulator Franchise, or the Alan Blinder Problem,” with a juicy anecdote at its core. It highlights a critical issue: how we’ve come to accept what other eras would view as dubious conduct as business as usual. Note that Taleb does a particularly artful job […]
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...In case you’ve been paying attention to market action rather than economic news, some key data releases for July have been less than cheery. For instance, consumer confidence has taken a nosedive, the US trade deficit unexpectedly worsened (meaning one of the few key sources of good news, the export sector, has hit an air […]
Read more...It should come as no surprise that a financial services industry powerful enough to water down meaningful reform in the US and internationally (Basel III rules were weakened to allow, for instance, that mortgage servicing rights be included in regulatory capital calculations) would probably have its way in blocking the nomination of Elizabeth Warren as […]
Read more...It looks as if Team Obama has reverted to form. In a repeat of its perfromance post the financial crisis, it appears to believe that no problem cannot be solved by PR, which puts it in league with the perps. Hat tip Glenn Stehle:
Read more...Why oh why is it that the US media treats financial services compensation levels as a third rail issue? Rent extraction was the driver of the financial crisis, and the financial services sector made it clear in 2009, by paying itself record bonuses on the heels of being saved from certain death, that it had […]
Read more...A news story today provides further confirmation of the rule by the banking classes in the US, with only token gestures to the rule of law. Per Bloomberg (hat tip Tom Adams), Citigroup is ponying up $75 million to settle SEC charges that the giant bank was not sufficiently forthcoming in the runup to the […]
Read more...Complementing today’s piece on the Chinese property bubble, a cross-post from VoxEU, with some graphical depictions of how wild the bubble has become. The NYT article referenced in the piece is here – RS. By Yongheng Deng, Professor of Real Estate and Finance at the National University of Singapore, Joseph Gyourko, Professor of Real Estate, […]
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...GM, with $75 bn in cash in reserves, bought AmeriCredit, a small subprime lender, in an all cash deal for $3.5 bn. GM is also currently in bankruptcy. AmeriCredit, which is rated BB by Fitch, was put on watch by Fitch, after the deal announcement. Fitch is unsure whether the deal will help or hurt […]
Read more...This post first appeared on May 1, 2007 Due to Paul Volcker’s having broken the back of inflation in the early 1980s, and Alan Greenspan performing what appears to be adequately on the substance of his job and masterfully at the showmanship, the Fed’s reputation is at an all time high. And that in and […]
Read more...Even if the rating agencies have retired hurt, it does seem that there is one organization still prepared to issue guarantees on, say, Option-ARM backed structured finance. Step forward, the collective of good old American taxpayers! One of my friendly emailers had a complete conniption about an FDIC program, during the week, and I never […]
Read more...This post first appeared on April 16, 2007 I always take note when a writer takes a position that is contrary to his usual stance. Tyler Cowen of Marginal Revolution is an intelligent and thoughtful commentator, but hews too closely to free market orthodoxy for my taste. But his review of Maggie Mahar’s Money- Driven […]
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...