Readers of this blog may know that we broke story in our book ECONNED of the role that the hedge fund Magnetar played in increasing the severity of the subprime bubble through its program of hybrid CDOs (meaning composed of actual tranches of subprime bonds plus credit default swaps). To recap: Magnetar embarked on an […]
Read more...By Glenn Stehle, an engineer who began working in the oil industry in 1974. After a two-year stint with Cities Service Oil Company, he worked for two years for Henry Engineering, a petroleum engineering consulting firm. Upon leaving Henry Engineering he worked as an independent engineering consultant in all facets of the oil and gas […]
Read more...Well, the BP disaster, in particular the intense press coverage of this week, appears to have provided the Administration with some very useful air cover, by diverting public attention from the final rounds in the battle to reform Wall Street. One of the common arguments against the need to create mechanisms to moderate corporate and […]
Read more...Ooh, this might get ugly. The ECB rather firmly resisted the idea of releasing its recent stress test results on individual European banks. And with good reason: many observers suspect that some of the big German and French banks look less than robust. (And this is before we get to the obvious elephant in the […]
Read more...Note the fund is to be established over two years, through a combination of dividend cuts and reduction in spending. Moreover, a planned dividend payment for June 21 is being halted, which would appear to be a meaningful concession. From Bloomberg: Svanberg and Chief Executive Officer Tony Hayward agreed to set aside $20 billion over […]
Read more...By Gonzalo Lira, a novelist and filmmaker (and economist) currently living in Chile and writing at Gonzalo Lira On the occasion of the BP oil spill disaster, President Obama’s delivered an Oval Office speech last night—a masterpiece of milquetoast faux-outrage. The speech was all about “clean energy” and “ending our dependence on fossil fuels”. Faced […]
Read more...I’m not quite certain how to calibrate journalism American Banker style, but I found this article, “Challenges to Foreclosure Docs Reach a Fever Pitch,” (sadly, subscription only, e-mailed by Chris Whalen), to be both interesting and more than a tad disingenuous. The spin starts with the headline, it’s a doozy. The “challenge to foreclosure documents” […]
Read more...The Brits appear to understand the danger of having an outside and uncontrolled banking sector relative to the size of their economy. So if it’s too hard to attack TBTF directly, the next best is to put (or be able to put) hard constraints on banking. This proposed authority for the Bank of England is […]
Read more...Before European readers get upset about the discussion of continued concerns about the eurozone, some of its eager defenders appear to subscribe to an extreme form of indeterminacy. If you recall the famed Schrodinger’s cat, the indeterminacy of the position of an electron is made (somewhat) more comprehensible by a thought experiment in which a […]
Read more...By Satyajit Das, a risk consultant and author of Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives – Revised Edition (2010, FT-Prentice Hall). It Always Ends in the Same Way … No one, including the IMF, seriously believes that the austerity program announced by Greece will work. Argentina had debt […]
Read more...FT Alphaville has a very useful chart and related discussion based on Citigroup research, on the question of whether BP could segregate its operations as a precursor to some sort of “good company/bad company” restructuring. Such a move would no doubt be presented as a way to remove the cloud of uncertainty over BP, but […]
Read more...The House Energy and Commerce Committee chairmen, Henry Waxman and Bart Stupak published the text of a 14 page letter sent today to Tony Hayward, BP’s CEO. The House website not only contains the text of the letter, but also 23 additional documents from BP, Halliburton, Schlumberger, and Transocean. The letter itself provides a damning […]
Read more...China posted a 48.5% increase in exports in May over its level the prior year, which led to much consternation and chest thumping in DC. Recall that Treasury Secretary Geithner was under considerable pressure from Congress to certify China a currency manipulator on April 15 (one of two semi-annual opportunities). China posted a rather surprising […]
Read more...We’ve admittedly gone a bit heavy on the BP coverage in the last day or so, but since we aren’t having a financial crisis weekend, this is one of the few major stories that is having meaningful developments. Bloomberg reports that the Coast Guard has ordered the oil producer to increase its recovery efforts. The […]
Read more...BP has clearly decided that it needs to do what it takes to get the Administration to de-escalate its campaign against the oil producer, and is signaling that it is willing to cut its dividend, something it has fiercely resisted, as a peace offering. BP’s chairman, Carl-Henric Svanberg has been summoned to meet with Obama […]
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