Nobel Prize winning economist Joseph Stiglitz tells us that neo-liberalism, witch is a catch phrase for policies that favor domestic deregulation and dismantling trade barriers internationally, has failed. The problem that Stiglitz fails to acknowledge is that despite the questionable record of these practices, they still hold considerable sway in the media and in the […]
Read more...We haven’t been covering the spectacle of Indymac twisting in the wind, since highly-regarded blogs like Calculated Risk and Housing Wire follow the mortgage lenders closely. However, the panic yesterday about Fannie and Freddie perhaps having to come up as much aswith $75 billion in equity ($75 billion?) diverted attention from what on any other […]
Read more...One of the polarized and emotionally charged debates these days (Cassandra compared it to Israel vs. Palestine) is whether the runup in oil prices is due to speculation or fundamental forces. And these extreme views tend to drown out notions that complex phenomena or conflating factors might be at work. One way to get to […]
Read more...Gretchen Morgenson of the New York Times has a story on proposed new reporting rules for credit default swaps that in passing raises the question that if implemented on the envisioned schedule (becomes effective in fiscal year financial statements after November 15, 2008, so the impact could be soon in coming), it may lead banks […]
Read more...Credit card companies, once having had Washington in the palm of its hand, is now facing a backlash as “gotcha” fees combined with a lot of Americans paying credit card rates that a generation ago would have landed the lender in jail (no joke, on an NPR show that I participated in, a caller said […]
Read more...Readers have taken to throwing brickbats when I post material that suggests that raising interest rates (at least in advanced economies) might not be a good move right now. We’ve said before that the reason the Fed kept rates too low too long was it looked at inflation as strictly a domestic phenomenon and ignored […]
Read more...A workmanlike piece in the Financial Times, “A re-emerging market?” by Gillian Tett, Aline Van Duyn and Paul Davies gives a cautiously optimistic outlook for the revival of the securitization market. However, it’s a bit disappointing that the article skips over a couple of key elements. The first is that the explosive growth of securitization […]
Read more...The newly-released annual report of the Bank of International Settlements sounds as if it is unusually lively reading. Most official documents strive for an anodyne tone, while this one appears to be unusually blunt. However, while some reporters have their hands on it, the report is not yet up on the BIS website, so those […]
Read more...Why has taken it taken so long for Congress to try to rein in a Treasury, Fed, and now SEC that has roughshod over their prerogatives? And even odder, why do they send a shot across their bow now that the Fed and SEC are starting to work together on securities reform ideas (or more […]
Read more...Der Spiegel, in “The Shrinking Influence of the US Federal Reserve,” (hat tip reader Saboor) discusses how the US is submitting to a detailed, comprehensive investigation of it financial system under the Financial Sector Assessment Program. While Der Spiegel claims that this program is a humiliation to the US, the real significance may be that […]
Read more...When Pilate saw that he could prevail nothing, but that rather a tumult was made, he took water, and washed his hands before the multitude, saying, I am innocent of the blood of this just person: see ye to it. Matthew 27:24 It no doubt sounds extreme to compare the SEC’s proposed changes in regulation […]
Read more...As reader Tom pointed out in comments today, perhaps the most important story in today’s Wall Street Journal didn’t get front page treatment. Banks are finding it hard to raise new equity. We’re not surprised at this outcome, in fact, we’re taken aback that this outcome was not foreseen. But despite the downturn in the […]
Read more...In the anxious January/February period, when New York Insurance Superintendent Eric Dinallo made Herculean efforts to come up with $15 billion for MBIA and Ambac, it was a high-stakes drama, since it was assumed that the loss of the AAA ratings would End the World of Finance As We Know It. Now that the once-unthinkable […]
Read more...Warning: the post below is a bit geeky. Readers might start with our other current MBIA post and then return here for further details. Please also note that due to a reader catching an error I have looked further into the concept of claims paying resources and made considerable modifications to the paragraphs relating to […]
Read more...As readers probably know by now, Moody’s, the last holdout on the AAA rating for the two big monolines MBIA and Ambac, downgraded both companies earlier today, and more harshly than Standard & Poor’s. And even with this downgrade, it underscored that more cuts are likely to be in the offing Per Bloomberg: MBIA’s MBIA […]
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