Archive for the ‘credit crunch’ Category
Thursday, May 14th, 2009
In an interview with Charlie Rose on Tuesday, Tim Geithner admitted the bubble was caused by Greenspan's easy money policy. Unfortunately, Charlie didn't ask the obvious follow-up: "why will this time be different? Why will Bernanke's easy money policy lead to different results?" Here was the crucial exchange:
Rose: "Looking back, ...
Posted in credit crunch, deflation, Interest Rates, treasury | 6 Comments »
Saturday, April 4th, 2009
A banker in Russia offers her view of the situation over there:
It's a mixed situation here. Over Q4 into early this year authorities devalued [the ruble], but did it gradually to allow companies and population to buy FX--foreign exchange. Corporate debt is over 400 bln USD--U.S. dollars--with I think just ...
Posted in credit crunch, Economy, leverage | 2 Comments »
Tuesday, March 17th, 2009
"...debtors prison. How very Dickensian." --Nick Gogerty
One quibble: saying the average Dubai citizen has a net worth of $10 million probably overstates individuals' wealth. The emirate is small enough that the richest few sheiks likely increase the mean substantially. Nevertheless, a good and interesting summary.
Posted in credit crunch | 1 Comment »
Thursday, March 12th, 2009
Marketwatch has the story.
The Republican Study Committee, a group of conservative GOP lawmakers, believe that instead of pumping billions to bail out banks, lawmakers could save the economy by simply eliminating controversial mark-to-market accounting rules, which require daily revaluing of assets...
The first step is a hearing Thursday, hosted by House ...
Posted in accounting, banking, credit crunch, debt, leverage | 5 Comments »
Wednesday, March 11th, 2009
Hat tip to CR for a fantastic find. Yesterday he published the "confidential" document floating around D.C. that seeks to justify AIG's never-ending bailout. Titled "AIG: Is the Risk Systemic?" the report threatens financial Armageddon if AIG is allowed to go down. In a nutshell, the company has interests in ...
Posted in credit crunch | 4 Comments »
Tuesday, March 10th, 2009
[Update: Sure enough, political consensus now appears to be in favor of MTM changes. More here]
No wonder financials soared yesterday; Bernanke suggested mark-to-market accounting needs adjusting. That would allow banks to avoid writing down toxic assets, artificially inflating their equity value.
CNN Money quoted Fed Chairman Bernanke saying he wouldn't support ...
Posted in accounting, banking, credit crunch, debt, Economy, Fed | 13 Comments »
Monday, March 9th, 2009
Jones Lang Lasalle just published a review of Dubai's property market. Here were the highlights (no link, hat tip Nick Gogerty):
Vacancies in the Dubai’s office market have doubled to around 16% over the past 6 months, the highest rate ever recorded. The market has been impacted by both deteriorating demand ...
Posted in bubble, credit crunch | No Comments »
Monday, March 9th, 2009
[Reader note: recently Yves Smith asked me to contribute to her blog Naked Capitalism. I hope to generate a post a week that will be simul-published on NC and OA. Regular OA readers may notice some repeated content in this post. My hope was to give NC readers a comprehensive ...
Posted in credit crunch, debt, Economy, Fed, government spending, housing, Interest Rates, politics, taxpayer issues | 19 Comments »
Friday, March 6th, 2009
Martin Wolf's latest column is a fantastic analysis of our thus-far-impotent bank "rescue" strategy...
Much of the debate [about "nationalization"] is semantic. But underneath it are at least two big issues. Who bears losses? How does one best restructure banks?
Banks are us. Often the debate is conducted as if they can ...
Posted in banking, bankruptcy, credit crunch | 1 Comment »
Wednesday, March 4th, 2009
Yesterday HousingWire published an article about hedge funds getting back into the market for MBS. It got me thinking, why are banks having trouble if there's a market being made in distressed assets? So I chatted up a few of my friends that know a lot more about the MBS ...
Posted in credit crunch, housing | 5 Comments »
Tuesday, March 3rd, 2009
The Bad Bank plan just won't die; instead it gets recycled in ever-more complex jargon that confuses everyone. Late last night the Obama administration leaked new details of Geithner's "private-public" partnership plan announced last month. Turns out it's a "bad bank" wolf in sheep's clothing. That is to say, it's ...
Posted in bailout, banking, bankruptcy, credit crunch, debt, leverage, taxpayer issues | 9 Comments »
Monday, March 2nd, 2009
Barack Obama needs to take a page out of Angela Merkel's playbook. Over the weekend, the German Chancellor rejected Hungary's call "for a sweeping bailout of Eastern Europe." Merkel put the kibosh on the bailout request because she knows that to survive this crisis, Germany needs to protect its own ...
Posted in credit crunch | 3 Comments »
Saturday, February 21st, 2009
Three weeks ago, the positively schizophrenic Op-Ed page for the WSJ published yet another piece by a big financial brain proposing a "solution" to the financial crisis. While the editorial page itself is so rigidly ideological as to be useless, the op-ed page publishes stuff all over the map. The ...
Posted in accounting, credit crunch, debt, deflation, Economy | 17 Comments »
Friday, February 20th, 2009
This is an ingenious video that explains the credit crisis in great detail. 10 minutes VERY well spent. (via Zero Hedge)
The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.
Posted in banking, credit crunch, Economy | No Comments »
Tuesday, February 17th, 2009
Whatever you call it (CR has coined the term "preprivatization"), the big banks need to be taken over by the government. Either they collapse on their own, taking the world financial system down with them, or FDIC gets pro-active and takes them out first. The FT is reporting that Republicans ...
Posted in banking, credit crunch, debt, Economy | 5 Comments »
Sunday, February 15th, 2009
Reuters doctored this original story to remove the bolded section below. (MLI)
Luo Ping, a director-general at the China Banking Regulatory Commission, said after a speech in New York that China would continue to buy Treasuries in spite of its misgivings about US finances.
Mr Luo, speaking at the Global Association of ...
Posted in credit crunch, debt, Dollar, Economy, politics | 5 Comments »
Sunday, February 15th, 2009
Because it will lead to higher interest rates, doing more damage to the economy than if we'd simply done nothing. A few relevant links before I get to my argument...
U.S. Budget Deficit: Heading for $1.6 trillion CR
Moody's: Rescue Efforts Ding U.S.'s Triple-A Rating WSJ
“I used to think if there was ...
Posted in credit crunch, Fed, government spending, housing, Interest Rates | 13 Comments »
Wednesday, February 11th, 2009
An absolute must-read column from FT's chief economics commentator, Martin Wolf. He asks, quite rationally, if Obama's presidency is already a failure. He came in with a huge amount of political capital, with the freedom to propose bold moves that might take control of events. And yet he is clearly ...
Posted in bailout, banking, bankruptcy, credit crunch, Economy | 4 Comments »
Tuesday, February 10th, 2009
Nobel Laureate Harry Markowitz is one of the architects of Modern Portfolio Theory, well-known to finance students as the inventor of the Markowitz efficient frontier. In the most recent volume of Financial Analysts Journal, he wrote a short article proposing a method to identify toxic assets on bank balance sheets:
...hundreds ...
Posted in credit crunch | 4 Comments »
Wednesday, February 4th, 2009
Commenting on a WaPo article that has details about Obama's emerging bank rescue plan, Naked Capitalism's always brilliant Yves Smith says "let's just kiss the U.S. economy goodbye."
For readers that missed it, this is a good opportunity to re-print the Op-Ed I published in the NY Daily News on Monday. ...
Posted in bailout, banking, credit crunch, debt, politics, taxpayer issues, tutorial, Wall Street | 8 Comments »
Friday, January 30th, 2009
Economists in the U.S. are conveniently ignoring questions about how we're actually going to pay for stimulus, bank bailouts, etc. Non-Americans at Davos are not.
To demonstrate the utter bankruptcy of what currently passes for economic thought, as well as America's collective myopia regarding paying for stimulus, I will devote a ...
Posted in bailout, banking, credit crunch, Economy | 6 Comments »
Tuesday, January 20th, 2009
Fresh bearish commentary from Dr. Doom. Bloomberg:
U.S. financial losses from the credit crisis may reach $3.6 trillion, suggesting the banking system is “effectively insolvent,” said New York University Professor Nouriel Roubini, who predicted last year’s economic crisis.
“I’ve found that credit losses could peak at a level of $3.6 trillion for ...
Posted in banking, bankruptcy, credit crunch, Economy, stocks, Wall Street | 7 Comments »
Monday, January 19th, 2009
Paul Krugman chiming in with a good op-ed today (via CR) criticizing plans to create a "bad bank" to absorb troubled bank assets. I've been very critical of Krugman's desire to spend a trillion $ or more at the federal level to pull us out of the recession, but on ...
Posted in bailout, banking, credit crunch, Fed, taxpayer issues, tutorial | 12 Comments »
Thursday, January 15th, 2009
Iceland, Bulgaria and now Latvia. According to the NYT (via Patrick.net):
Violent protests over political grievances and mounting economic woes shook the Latvian capital, Riga, late Tuesday, leaving around 25 people injured and leading to 106 arrests.
In the wake of the demonstrations, President Valdis Zatlers threatened Wednesday to call for a referendum ...
Posted in bankruptcy, credit crunch | 3 Comments »
Wednesday, January 14th, 2009
Gadfly credit analyst Sean Egan made an appearance on ABC's World News Tonight this evening. He provided the sound for David Muir's piece on Citigroup's plan to break itself up.
Among his quotes:
The failure of Citicorp would be absolutely catastrophic for the economy. We wouldn't be surprised if the federal government ...
Posted in bailout, banking, credit crunch, credit rating agencies, Wall Street | 1 Comment »
