Archive for September, 2008
Monday, September 29th, 2008
The bailout was defeated in the house a few minutes ago. Short-term this is very bad news as confidence in the worldwide financial system is quickly reverting to zero. The Dow was off as much as 700 but has come back to down 500 as I write this.
Longer-term, I ...
Posted in bailout, credit crunch, Dollar, Economy, politics, taxpayer issues | 1 Comment »
Monday, September 29th, 2008
I didn't even get a chance to write a post about WaMu being the largest bank failure in history. Continental Illinois, which failed during the S&L crisis, had held the record for 14 years until last Friday, when the FDIC took out WaMu and forced a sale to JP Morgan. ...
Posted in bailout, banking, credit crunch, Fed, Interest Rates, stocks, taxpayer issues, Wall Street | 3 Comments »
Sunday, September 28th, 2008
Average Americans may be forgiven for not understanding why Congress is moving so quickly to pass this massive bailout package. Sure the economy isn't great---gas prices are still high, it's harder to get a home loan, some folks have lost jobs---but why are guys close to Paulson saying things like ...
Posted in banking, bubble, credit crunch, Economy | 15 Comments »
Wednesday, September 24th, 2008
Psyched to be invited onto Baltimore's #1 "news/talk" station, WBAL, Thursday afternoon at 5:05PM Eastern.
Readers can tune in over the internet by going to WBAL.com and clicking on the Listen Live link. (The radio feed doesn't seem to be optimized for Firefox, so you should log in with IE ...
Posted in Uncategorized | 2 Comments »
Wednesday, September 24th, 2008
Yesterday Warren Buffett said he's investing $5 billion in Goldman Sachs. (11/6 update: the stock is now 33% the exercise price on Buffett's warrants) The market is interpreting this as a show of confidence from the world's savviest investor. But why now? Is Goldman (or any other hammered financial stock) ...
Posted in accounting, bailout, banking, bubble, credit crunch, Dollar, Economy, Fed, government spending, housing, inflation, politics, taxpayer issues | 7 Comments »
Monday, September 22nd, 2008
Is it over the top to be predicting the end of the financial world? I would have thought so two months ago...
Last week there was a run on money market funds: According to AP: "investors pulled $224 billion...in the seven-day period ended Thursday. On Wednesday alone, about $89 billion ...
Posted in banking, bubble, credit crunch, Economy, Fed | 3 Comments »
Sunday, September 21st, 2008
Below is a reprint of the Op-Ed I published in today's Baltimore Sun.
"Is the Worst Yet to Come?"
by Rolfe Winkler
September 21, 2008
Will it ever end? For more than a year, the financial system has struggled to function, stricken as it is with economic Ebola. Cash is the only cure, and ...
Posted in bailout, banking, bubble, credit crunch, Dollar, Economy, Fed, inflation, politics, taxpayer issues, Wall Street | 23 Comments »
Friday, September 19th, 2008
Hi folks. Back after a long couple days drafting an op-ed for this Sunday's Baltimore Sun. Thought I'd contribute my two cents about today's rally. The reason the market spiked had nothing to do with fundamentals. The shorts got squeezed.
Here's a basic tutorial for you. To sell a stock short---that ...
Posted in shorts, stocks, tutorial, Wall Street | 18 Comments »
Thursday, September 18th, 2008
Yesterday I wondered if Buffett would put some cash to work buying distressed assets. Today we got the answer. From Bloomberg:
Warren Buffett's MidAmerican Energy Holdings Co. agreed to buy Constellation Energy Group Inc. for about $4.7 billion, snapping up the largest U.S. power marketer at less than half its market ...
Posted in shorts, stocks, Wall Street | 8 Comments »
Wednesday, September 17th, 2008
The British bank Barclays scooped up Lehman's good assets for a song the day after it filed bankruptcy. From the Journal:
...Barclays PLC agreed to acquire the bulk of [Lehman] for $1.75 billion.
Barclays is buying a stripped-clean version of Lehman's North American business, which will include most of its people, franchise, ...
Posted in banking, stocks, Wall Street | No Comments »
Wednesday, September 17th, 2008
Today's top headline on Drudge is this: Federal Bank Insurance Fund Dwindling.
The article itself reads like a repeat of the one I posted here two weeks ago. In a nutshell, the FDIC doesn't have enough money to bail out depositors if WaMu and any other large banks fail. Luckily, Bernanke ...
Posted in banking, credit crunch, Wall Street | 16 Comments »
Tuesday, September 16th, 2008
Per Bloomberg (via CR):
Washington Mutual Inc., the biggest U.S. savings and loan, had its credit rating cut to junk by Standard & Poor's because of the deteriorating housing market...."Increasing market turmoil and the related impact from managing its concentrated mortgage franchise in this troubled housing and credit cycle led to ...
Posted in bailout, banking, credit crunch, housing, stocks | 3 Comments »
Monday, September 15th, 2008
UPDATE 1:50 PM. CNBC NOW REPORTING BUFFETT IS NO LONGER IN TALKS WITH AIG.
Story at Bloomberg:
Billionaire investor Warren Buffett's Berkshire Hathaway Inc. ``is thought to be in talks'' with American International Group Inc. about a possible investment, the Insurance Insider reported, citing unidentified sources.
AIG got below $4 but is now ...
Posted in credit crunch, stocks, Wall Street | 1 Comment »
Sunday, September 14th, 2008
(Complete coverage of yesterday's events in the posts below)
CalculatedRisk is reporting that the Fed has expanded the types of collateral it is willing to except in exchange for loans. A year ago it only accepted the highest-quality (least risky) collateral in exchange for a loan. Treasury bonds, for instance. Now ...
Posted in banking, credit crunch, Economy, Fed, Wall Street | 2 Comments »
Sunday, September 14th, 2008
The news just keeps getting worse. AIG was said to be in trouble, but not facing the same sort of crisis as the investment banks. Sure it has exposure to toxic mortgage assets, but it also has real businesses it can sell to raise capital: an automobile insurance business, an ...
Posted in bailout, banking, credit crunch, credit default swaps, Wall Street | No Comments »
Sunday, September 14th, 2008
Wow. Just wow. After a weekend of emergency meetings, two major investment banks will disappear...
Lehman is planning to file for bankruptcy, and, according to the Journal, Merrill is in merger talks with Bank of America:
Bank of America and Merrill Lynch & Co. Inc. are in merger discussions, according to people familiar with ...
Posted in banking, credit crunch, shorts, Wall Street | 1 Comment »
Saturday, September 13th, 2008
The news yesterday is fascinating to contemplate.
Washington Mutual---America's largest S&L, with over $140 billion of insured deposits---is reportedly in emergency talks to sell itself to JP Morgan.
AIG---America's largest insurer, with a trillion dollar balance sheet---plans a Monday conference call where it may announce emergency measures to shore up its capital.
Lehman---a ...
Posted in banking, credit crunch, credit default swaps, Fed, shorts, taxpayer issues | 33 Comments »
Thursday, September 11th, 2008
.....Joseph Schumpeter? We could use a little help with some creative destruction.
The question is being asked far and wide today: Is Lehman too big to fail? The stock is getting hammered, down 40% as I write this, and CEO Dick Fuld is making calls to other banks to determine whether ...
Posted in accounting, bailout, banking, bubble, credit crunch, Economy, stocks, taxpayer issues | 1 Comment »
Wednesday, September 10th, 2008
Two weeks ago, during the live talkback at the I.O.U.S.A. premiere, Warren Buffett played Pollyanna, waxing enthusiastic about the prospects for the American economy.
His latest biz decision doesn't match his public rhetoric. From today's Journal:
Warren Buffett's Berkshire Hathaway Inc. has told one of its subsidiaries---(Kansas Bankers Surety)---to stop insuring bank ...
Posted in bailout, banking | 21 Comments »
Tuesday, September 9th, 2008
Jim Rogers is worth listening to. He's been very successful over time, having co-founded the Quantum Hedge Fund with George Soros, and unlike most guests on the business channels, he's not trying to sell you anything. These videos are from mid-July, but seem especially relevant post the Fannie/Freddie bailout. (Here's ...
Posted in bailout, banking, bubble, credit crunch, Dollar, Economy, Fed, GSE, housing, inflation, Interest Rates, politics, taxpayer issues, Wall Street | 4 Comments »
Monday, September 8th, 2008
As reported at length by Mr. Mortgage, and more recently, on this blog: WaMu is in deep trouble. CEO Kerry Kilinger was fired this weekend and today the bank signed a "memorandum of understanding" with its chief regulator, the Office of Thrift Supervision.
Basically, OTS just put WaMu on notice.
Remember, WaMu ...
Posted in bailout, banking, taxpayer issues | 17 Comments »
Monday, September 8th, 2008
This blog knew it was coming, but now it's official: Fannie Mae and Freddie Mac are now wards of the taxpayer and will receive $200 billion of freshly-minted taxpayer cash to repair their balance sheets. Unfortunately for taxpaying Americans, that's just a down payment on the amount that will ...
Posted in bailout, Economy, government spending, politics, taxpayer issues | 7 Comments »
Sunday, September 7th, 2008
Fan and Fred borrow money to make home loans. As long as homeowners pay them back, Fan and Fred can pay back their own debt. Essentially, the companies make money by lending at a high interest rate while borrowing at a lower one.
Trouble occurs when Fan and Fred lend to ...
Posted in tutorial | No Comments »
Thursday, September 4th, 2008
Don't you wish reporters did this more often:
Johnny Mac canceled an appearance on Larry King (the softest of the softies) in protest for this and other media "attacks" on Sarah Palin. And at last night's convention, all the speakers took the media to task for, well, doing their job.......
Posted in politics | 23 Comments »
Tuesday, September 2nd, 2008
The Federal Deposit Insurance Corporation is on the brink of bankruptcy and taxpayers may be forced to pony up hundreds of billions to bail it out—for the second time in a generation.
All the while banks like Washington Mutual are deliberately putting taxpayers at greater risk. But more on WaMu later.
Created ...
Posted in bailout, banking, credit crunch, Economy, taxpayer issues | 16 Comments »
