Storied investor George Soros believes that the credit crisis is far from over, and sees regulatory failure as a major cause. From Bloomberg: Billionaire George Soros said the global credit crisis will get worse before it gets better. Soros, who said lack of oversight is partly responsible for problems in the financial markets, criticized regulators […]
Read more...John Plender in the Financial Times offers a hit list of what he views as the obvious priorities for financial services reform and assesses the odds of them being implemented. It’s a useful exercise, but also a sobering reminder of how difficult it is to effect change in an industry that has proven to be […]
Read more...Reader William Kidder, who has been in the interest rates business since 1966 and managed a recognized government bond dealer in the 1970’s (some regard him as the father of the matched book) offered a proposal on how to clean up some of the problematic practices that have led to our credit crunch. Kidder admits […]
Read more...Reader eTrader alerted us to an important but under-reported development today, namely, that FAS 140 has been provisionally modified so as to kill SIVs. While this structure was effectively dead as of now, there remained the possibility of it being reconstituted in the future. As FT Alphaville reports, the problem with SIVs is that they […]
Read more...Greenspan decided to launch a frontal attack on critics of his tenure at the Fed, via a Financial Times comment, “The Fed is blameless on the property bubble.” Needless to say, his defense does not stand up to scrutiny. Greenspan was happy to take credit for the commonly-held view that central bankers were responsible for […]
Read more...As the credit crisis has worsened, regulators are increasingly abandoning their usual anodyne statements in favor of blunt assessments and plainspoken calls for action. But even in this new age of supervisory candor, the call by Dominique Strauss-Kahn, the IMF head, for global fiscal action to combat the decline in growth, reveals that the IMF […]
Read more...Oooh, because I have to be on a plane at an ungodly early hour tomorrow, I do not have time to do Robert Shiller’s New York Times piece, “The Fed Gets a New Job Description.” justice. In short, I don’t agree with this mission creep by the Fed becoming official. First, as Shiller implies, the […]
Read more...While there have been dark mutterings about how Bear shareholders were cheated in the sale of the firm to JP Morgan, I don’t have much sympathy for that view. Plenty of businesses fail every day; equity investors usually lose their entire stake and employees are fired. While it is sad on a human level to […]
Read more...Gillian Tett of the Financial Times perhaps a bit wistfully, looks back on the days when market participants could tell themselves that everything could bubble along at a “just right” level. She now wonder whether despite the troubling prospects, we might somehow stumble through in a way that avoids the worst extremes (the equity markets […]
Read more...Because I was distracted today (houseguest, plus preparing for out of town trip), I haven’t spent as much time as I would have like on the Congressional hearings into the Bear bailout. Judging from the media reports, it seems that the assertive presentations by the perps, um participants in the deal were not met with […]
Read more...George Soros, in today’s Financial Times, joins a long list of critics of the Paulson financial services reform plan, although even to dignify its bureaucratic legerdemain with the label “reform” is singularly misleading. Soros departs from his peers in sketching out where he thinks regulators went wrong and offers two specific proposals, I am particularly […]
Read more...Several alert readers caught the Financial Times story, “Wall St banks seek to ring-fence bad assets,” and I held off from posting on the assumption it would merit coverage in the Wall Street Journal or the New York Times. Not so. The Financial Times article says that investment banks are seeking to put dodgy assets […]
Read more...On the one hand, I should be flattered that Brad DeLong took the time and trouble to take two posts (here and here) to respond to my comments on an earlier post of his, in which I objected to his and Summers’ notion of having the government fund either directly or indirectly, the purchase of […]
Read more...A Financial Times story reports that the Financial Stability Forum, which is tasked with finding remedies to our credit crisis, is circulating a paper which suggests some radical possible solutions. The fact that these measures are under consideration says that the authorities do not expect a resolution any time soon. One paragraph caught my eye: […]
Read more...Avinash D. Persaud gave a speech to the Committee of European Securities Regulators (posted at Willem Buiter’s blog) that argues that banks’ risk models and regulation based on market based pricing were bound to fail. That’s a very bold claim, yet Persaud appears to have the goods. If any of you have worked with models, […]
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