Category Archives: Regulations and regulators

"Could the party be drawing to an end for bond investors?"

This story by Tim Bond in Thursday’s Financial Times, provides an excellent explanation of how a change in the universe of bond investors has produced new outcomes, like a difficult-to-explain negative yield curve. It also looks prescient in light of the plummet in long-dated Treasuries that day. Bond’s article says that “long term bonds are […]

OTC Derivative Risk to the Dealer Community

A very good post by Roger Ehrenberg at Seeking Alpha, “OTC Derivatives: Risks and Rewards,” which explains that the over the counter derivatives business poses a risk, perhaps a significant risk, to the Wall Street community. For the benefit of readers, over the counter derivatives are those that are not traded on an exchange. Recognize […]

Why Fish Stocks Are in Danger: Subsidies

Ever since we learned that the perilous state of the oceans is a top 25 underreported story, we decided to our bit to rectify that by giving articles on the state of the seas more prominence. At current fishing rates, fish stocks will collapse by 2050. But why hasn’t the invisible hand interceded? If fish […]

Half-Baked WSJ Op-Ed on the Fed

I have spent the entire long weekend avoiding dealing with this article by David Ranson and Penny Russell, “Does the Fed Matter?” in Friday’s Wall Street Journal. The reason is that if I got going, there is so much in it that is off beam, misleading, or just plain wrong that it would be hard […]

"How to Handle a Debt Collector"

This article ran on MarketWatch, and I find it a sign of the times. Despite the supposedly sound state of the economy (if you call a tanking housing market and 1.3% GDP growth, which is negative in real terms, “sound”), MarketWatch nevertheless thought this story would appeal to its target audience, the investing class. The […]

More Evidence of Food Price Inflation

This Financial Times story, “Growing biofuels demand raises food prices,” highlights increasing prices of grains and other soft commodities. The grain price rise merits particular attention, since it appears to be a structural rather than a cyclical increase. And higher grain prices in turn mean higher meat, milk, and egg prices. What this story does […]

BIS Warning on Hedge Fund-Investment Bank Relationship

The Financial Times appears to have scooped the Wall Street Journal, Bloomberg, and the New York Times on a Bank of International Settlements report due out today, which says that investment banks are too cozy with hedge funds and that isn’t very good for the financial system. The BIS report calls for greater disclosure of […]

Wall Street’s Not So Clever Subprime Acquisitions

Last February, we questioned the wisdom of the headlong rush of Wall Street firms such as Merrill Lynch, Morgan Stanley, and Barclays to acquire subprime lenders, since it appeared that the distress in the market foretold not only a fundamental contraction but also more stringent regulation. Our skepticism appears to have been warranted. This weekend’s […]

Is Systemic Risk Underestimated?

The question of systemic risk, that is, the possibility of a generalized failure of the financial system, such as a stock market crash, is something that regulators think about a great deal and quite deliberately discuss a good bit less, since fear becomes a driving element in any market panic. The reason for the heightened […]

Bernanke Issues Warning on LBO Lending

Bernanke normally adopts a measured tone and, as befits someone whose words can move markets, takes great care not to dwell too heavily on bad news. So it was suprising to see him issue a fairly pointed statement on risks to the banking system. His remarks on the perils of private equity loans, when taken […]