The “all animals are created equal, but some are more equal than others” logic appears to operate in full force as far as Goldman is concerned. Violations of normal rules of conduct are not merely tolerated, but are asserted to be acceptable. Now admittedly, the latest news tidbit, of former Goldman co-chairman Steven Friedman staying […]
Read more...Banking has suffered a not-sufficiently-acknowledged loss of know-how on the lending side. Back in the stone ages when I got an MBA, there were a few fellow students from big commercial banks like Chase (and no former investment banking analysts, the two year posts for college graduates) and they had all gone through credit training. […]
Read more...The latest leak, arriving curiously after the markets closed, is that the Treasury wants Citigroup to raise $10 billion as a result of the famed stress tests, which the bank is fighting tooth and nail. Another rumors circulating in the media Is that Bank of America is being asked to convert $45 billion of preferred […]
Read more...The financial crisis has gone enough rounds to have evolved from tragedy into farce. The stress tests are a prime example. It’s hardly news that some banks are mucho unhappy with their grades. Wells Fargo and US Bank were complaining about the tests even before they began, clearly anticipating less than stellar scores based on […]
Read more...In another disheartening development on the banking front, the Senate defeated legislation giving judges the authority to modify residential mortgages in bankruptcy. Note that the popular description is often misconstrued in short form descriptions. Judges would not have had open-ended authority to make changes. The construct is that mortgages are collateralized loans. The mortgage balance […]
Read more...Well, that isn’t exactly how the Financial Times’ Martin Wolf put it, but his comment today does carry a sobering message. Bank balance sheets need a tremendous amount of additional shoring up. Some not too pretty factoids: We appear to be less than halfway through writedowns, and the fundraising and recapitalizations to date are falling […]
Read more...The chicanery never ends. The latest bit of looting fobbed off as a win for homeowners is a program to shovel money to second mortgage lenders: The Obama administration unveiled a new program to help borrowers with second mortgages stay out of foreclosure, offering cash to servicers, investors and borrowers who modify loan terms. Guess […]
Read more...Submitted by Edward Harrison of the site Credit Writedowns The leaks about who failed the stress tests are already starting. Who got a big fat ‘F’? Apparently, Citi and BofA for starters. But is that any surprise? Regulators have told Bank of America Corp. and Citigroup Inc. that the banks may need to raise more […]
Read more...As readers may know, I view the credit default swaps market with more than a bit of skepticism. I can point to cases where it has caused harm: 1. Bagholders. Dealers claim that CDS are really not bad at all because they haven’t been taking risk, oh no, they hedge their position with offsetting swaps. […]
Read more...Ah, in Lake Woebegone, all the women are beautiful and all the children are above average. And in the stress tests, no one fails, they just need to get more equity, preferably not from Uncle Sam, but he is always there to help his best bankster buddies. Recall many observers, including yours truly, deemed the […]
Read more...The clout of the press has decayed enormously over the last 40 years. The fourth estate was feared, resented, and begrudgingly respected in the corridors of power. But rule by beancounters, savvy media spin, and access journalism (journalists who write pointed stories get frozen out) have largely leashed and collared the press. Indeed, a friend […]
Read more...Despite her longevity as a California pol, house speaker Nancy Pelosi is looking like every bit as much of a dyed-in-the-wool financial services industry backer as the Congressmen on the New York-Boston corridor. As readers will know, this blog does not dwell much on the inside baseball of politics. But once in a while things […]
Read more...One thing that has me troubled about the financial mess is the degree to which the powers that be are wedded to a system that it clearly broken. In part, that results from financial capture of the government apparatus by the banking industry. But an equally sticky problem is the attachment to a rather recent […]
Read more...Forgive me for sounding even crankier than usual, but the reason deception sells is that so many people line up for it. The release claiming to describe how the stress tests were conducted in fact provided no new information. Some analysts were more than a tad dismissive: The central bank released a so-called white paper […]
Read more...The obstacle to a bailout of Chrysler is the still large bid and ask spread between what the secured creditors are now willing to agree to in the way of a haircut, versus what Treasury is willing to give them. The drop dead date is next Thursday. But news reports tonight differ on what a […]
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