This from an attentive (and well known) investor. I’d provide a link except the press release is not yet posted on Dodd’s website United States Congress For Immediate Release July 10, 2009 Contact: Kirstin Brost/Justine Sessions, Dodd, 202-224-7391 Steve Adamske, Frank, 202-225-7141 Dodd, Frank Ask Regulators to Address 2nd Mortgages Valuation Problems that Discourage Loan […]
Read more...Another day, another banking industry subsidy. From MarketWatch (hat tip reader Marshall): A panel that oversees a $700 billion bank bailout package said Friday that financial institutions buying out warrants they gave the government in exchange for capital injections are now buying back those stakes at well below their fair value. The Congressional Oversight Panel, […]
Read more...While recent news reports have tried to put a cheery face on the AIG bailout as asset sales are moving forward haltingly, the end game appears no better than it did some months ago, at least according to Citigroup. Note that the amount authorized for bailout is $180 billion,”only” $134 billion has been committed to […]
Read more...Submitted by Edward Harrison of Credit Writedowns. Yves had a very good post yesterday called “Why Big Capital Markets Players Are Unmanageable” on banks: the former i-banks and commercial banks. The biggest takeaway for me came from her statements regarding the level of responsibility that a junior level employee in an investment bank can have. […]
Read more...Goldman and Barclays are out touting old structured credit technology, apparently collateralized debt obligations, and claim they have been tamed and repurposed and are now virtuous. I am skeptical of these assertions, and welcome informed reader comment. CDOs in particular were leverage on leverage vehicles, and indeed, that seems again to be the reason for […]
Read more...Submitted by Edward Harrison of Credit Writedowns. In the clearest signal yet that we are still in a potentially devastating global deflationary spiral, The Riksbank, Sweden’s central bank and the world’s oldest central bank, has effectively cut interest rates to minus 0.25% and has started a program of quantitative easing a.k.a printing money. These are […]
Read more...Dear readers, we are NOT setting out to have a Willem Buiter-fest this weekend. It’s simply that this is a slow news period and Buiter has a good post after the first video clip I’ve ever seen of him. So if there was more activity, the Buiter-density would be lower. The Anglophile Dutch economist has […]
Read more...Willem Buiter touches on the state of bank lending and proposals for financial services industry supervision. Enjoy!
Read more...If you had any doubt that the intent of policy, such as the heroic efforts by the Fed to channel money to the mortgage market my manipulating spreads of mortgage paper so as to lower borrowing costs, was not merely to clear inventory but boost prices, today’s action should put your mind at rest. The […]
Read more...Martin Wolf is pessimistic about the whether the financial system can be reformed, but nevertheless offers some toughminded suggestions. Oddly, he seems to see the big obstacles not as political, but as practical, that markets are too big and interconnected, and sees that as an intractable problem. I agree that it will almost certainly not […]
Read more...The Bank of International Settlements, mindful of the importance of its role, would never say anything as crass as the translation I offered in the headline. But that is nevertheless a message in its newly-released annual report. From the Guardian (hat tip reader DoctoRx): Taxpayers around the world still face potentially large losses because governments […]
Read more...Submitted by Edward Harrison of Credit Writedowns. Here’s a conspiracy theory for you. As I am not much of a conspiracy theorist, I ill keep this one pretty simple. Here’s the chain of events. Back in late September when the world was falling apart, Ben Bernanke, Tim Geithner and Hank Paulson were all desperate to […]
Read more...America as banana republic is alive and well. Tonight’s version is that anything that helps banks is permitted, official rules to the contrary. Banks enjoyed lots of fun and profit from setting up various off balance sheet vehicles that are now coming a cropper. We saw the preview of this movie with structured investment vehicles, […]
Read more...For information junkies and those wanting one-stop shopping on who did what to whom during the crisis, the New York Fed has just put up a crisis timeline, with domestic and international versions, at its website, which it intends to update monthly. Below is a sample (click to enlarge). It downloads as a pdf:
Read more...Just as one man’s terrorist is another’s freedom fighter, so to is a return to prudent lending practices now leading to “unintended consequences”, namely fewer loans being extended. The post-bubble spin-mongering continues. New lending standards now mandated by Freddie and Fannie as a result of a settlement between New York State and the mortgage giants […]
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