Paul Keating, former Austrailian Prime Minister, gave an assessment of Timothy Geithners’ performance in the Asian crisis that is sharply at odds with US reports. According to Keating, Geither completely misread the nature of the crisis, that it was the result of hot money flight, but reverted to the standard IMF “country facing currency crisis” […]
Read more...We have sometimes pointed to a paper by Nobel prize winner George Akerlof (of “markets for lemons” fame) and Paul Romer on the phenomenon of looting. Forgive us for repeating ourselves, but this paper was written in the wake of the savings and loan crisis, and was clearly ignored, because if anyone had heeded their […]
Read more...This tidbit comes in a Wall Street Journal story, “Top Treasury Candidates Pull Out“: Treasury has identified and is vetting other people for top slots, including H. Rodgin Cohen, chairman of top law firm Sullivan & Cromwell LLP and an adviser to virtually every firm on Wall Street, for the deputy secretary position, two people […]
Read more...The British don’t do shrill, but Wolf today is as close as you will ever find on the pages of the Financial Times. And the telling sign that Wolf is borderline unhinged is (aside from mentioning his fury) that his article has less of a clear structure than his comments usually do. But he nevertheless […]
Read more...The Treasury today announced its so-called “Making Homes Affordable Program”. I am clearly an old fart. The fact that the Treasury bothered to have a logo created for the program (do consumers and servicers really need brand imaging when having money shoved at them?) gives me more than a little pause. I will nevertheless try […]
Read more...As dramatic as the supposed revelation that the FDIC may need to go hat in hand to Congress for more dough, this is hardly a surprise. The FDIC also needed to appeal for additional funds in the savings and loan crisis, and our current mess dwarfs that one. From Bloomberg: Federal Deposit Insurance Corp. Chairman […]
Read more...One of the things I find truly remarkable is the degree to which Americans (or at least commentary in pretty much all American media) have bought into certain ideological constructs as if they were gospel truth. Now in fact, most of us operate from ideologies of various sorts. For instance, reasonable people can differ on […]
Read more...A New York Times article tonight, “U.S. Likely to Keep the Reins on Fannie and Freddie“, raises the specter that the mortgage giants may never return to private form. Frankly, we think that is not entirely a bad thing. Fannie and Freddie were originally agencies of the US government and were (sort of) spun out […]
Read more...Analysts, regulators, and politicians are beginning to recognize that most if not all of the widely touted benefits of modern finance redounded only to its purveyors. The decidedly retro Canadian banking system, with simple products, high equity requirements, and relatively modest securities operations that focus on domestic customers, is the soundest in the world. As […]
Read more...A very good comment by former Treasury Secretary James Baker in the Financial Times, “How Washington can prevent ‘zombie banks’,” warns that the US is on its way to repeating the Japanese error of propping up dud banks and creating a moribund economy as a result. His program has the merit of being simple (at […]
Read more...Funny how a deal that is giving Citi a premium on its common shares that one typically sees in an M&A transaction (ie, the target is sought after) in the course of a salvage operation is being . Similarly, the bank is being asked to have its board members that are insiders resign those seats. […]
Read more...Apologies for the terse posts tonight; out of town, will be lighter than usual today and tomorrow. The Financial Times has been keeping tabs on the results, or perhaps more accurately, the lack thereof, of collateralized debt obligations. A couple of weeks ago, it highlighted research by Morgan Stanley and Wachovia that concluded that nearly […]
Read more...I wish I had the time to analyze this deal, but my travel schedule is cutting into blogging time, In addition, I don’t have a feel for whether the units mentioned in this article are merely suffering in accord with the crappy financial environment, or may have suffered additional, perhaps lasting damage. Two observations: First, […]
Read more...To be honest, I’m not quite sure how to read this Wall Street Journal piece, since this is a spat between two parties, with a “he said, she said” quality to it. However, the title, “Citigroup Chafes Under U.S. Overseers:” suggests a bias in favor of Citigroup.”Overseers” is a weak word, suggesting Uncle Sam really […]
Read more...Guess the continuing deterioration in the stock market is beginning to capture the attention of the financial regulators. The Treasury, FDIC, OCC, OTS, and Federal Reserve issued a joint statement just after 4:00 PM (hat tip reader Steve). Some key bits (boldface ours); A strong, resilient financial system is necessary to facilitate a broad and […]
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