Let me tell you, if we have a revolution in the next decade, one of the triggers will have been the flagrant disregard shown by big players like MBIA for regulations, legal commitments, and fair dealing. I’m not surprised to see financially oriented sites calling for mass protests (but not yet against bond guarantors). The […]
Read more...Full disclosure: I’m normally a fan of Mohamed El-Erian, former head of Harvard Management, now co-president of bond giant Pimco. But his current comment in the Financial Times, “How best to manage global imbalances,” struck me as more than a tad disingenuous. Let’s go through the article: Whatever happened to the debate on global payments […]
Read more...The markets responded positively today to Lehman’s announcement of its second quarter results, its provision of a financial supplement that gave more detail on its balance sheet exposures and how they had changed over time, and its investor conference call, The stock was up over 5% of the day, although its closing price of $27.20 […]
Read more...It’s one thing to read an apocalyptic alarm from, say, a blogger or a newsletter writer. It’s quite another to see it coming from an analyst at a large institution, in this case AIG. Bernard Connolly is deeply critical of central banks, not just of their recent actions but also of their very existence, and […]
Read more...I’ve had less cause of late to criticize the Wall Street Journal as the paper has made strides in its coverage of the credit markets. However, today’s paper has a story in which ideology appears to have compromised its reporting. Today Charlie McCreevy, EU internal markets commissioner, is to outline proposals for closer, tougher oversight […]
Read more...We’ve read from time to time that European banks have been launching deals, and not particularly good ones at that, solely for the purpose of using those securities as collateral for loans from the ECB. However, we hadn’t seen a longer-form treatment of that phenomenon. The Economist has decided to step into the breach. The […]
Read more...With the financial system on the exam table, it has been more than a bit troubling, that certain questions are neglected in serious academic/policy debates. The discussion of possible remedies focuses on regulatory solutions, everything from requiring mortgage brokers to be licensed to increasing financial institution capital requirements and having much greater harmonisation, as the […]
Read more...Institutional Risk Analytics has an informative, engaging interview with Martin Mayer, who is a professional polymath (he is the author of 34 books, former banking columnist, art critic, film critic, and currently a guest scholar at Brookings). I very much recommend reading the entire piece and provide some tidbits below. From Institutional Risk Analytics: Mayer: […]
Read more...Whether it comes to fruition is to be determined, but taken at face value, Connecticut senator Joseph Lieberman’s proposal to bar institutional investors such as pension and index funds from investing in commodities is a Nixon-goes-to-China moment, a significant indicator of Wall Street’s fallen standing. Lieberman has been a staunch defender of the securities industry […]
Read more...Do you remember the Ford Pinto? The 1970s car had a nasty tendency to explode into flames in rear end collisions. But the piece de resistance was when litigation exposed a Ford internal memo that showed the company was not only aware of the problem, but had run the math and concluded reinforcing the car […]
Read more...A piece by John Dizard in the Financial Times, “Get used to underwriting big lenders,” made me realize a bit of cognitive blindness. Central banks are committed to backstopping the credit default swaps market. Of course, that should be obvious. The Bank of England, ECB, Fed, and other central banks have intervened in various ways […]
Read more...Without a doubt, the Federal Reserve now faces the most difficult financial and economic climate in our collective memory. And it is increasingly apparent that its options are constrained. Although it is premature to arrive at definitive judgments, it’s nevertheless worth asking whether some of these limitations were unwittingly self-created. Friday’s market rout, triggered by […]
Read more...In a nutshell, yes, but not in the way the industry hopes. In a Financial Times article. Gillian Tett files a somewhat dumbfounded report from the European Securitization Forum in Cannes. While the event has gone wildly downscale from last year’s bash, the participants were hopeful that the return of good times was just around […]
Read more...It really is very hard to come up with decent proposals to contend with our highly integrated, international, essential, and not-so-well functioning financial system. While some have developed general guidelines that sound attractive, figuring out how to implement them is quite another matter. For instance, in a recent Financial Times comment, former Treasury secretary Larry […]
Read more...Before we get to my rant, let’s give a quick update on Lehman. The bank had a better day than yesterday, with the stock up a tad more in large part due to supportive words by highly respected investment bank analyst Guy Moszkowski who said that the notion that Lehman would come to the same […]
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