A heartfelt congratulations to the United State of Georgia (from whose namesake “University of” I got my Finance MBA), which today passed California in the battle for Most Failed Banks (9 v 8) in the past year. In fairness, California did not have a failure until July, while Georgia waited until August. The two states […]
This is why we don’t believe the bailout will work the way you think it will (i.e., to increase lending): Recently, securities rated AAA have changed hands for roughly 30 cents on the dollar, and most of the buyers have been hedge funds acting opportunistically on a bet that prices will rise over time. However, […]
What my brain wants to do: Bank capitalisation, stress testing, book value, and discussion of other data that clearly indicates the need for the nationalisation of several LARGE banks. What my brain is currently capable of doing: The cheerleader who saves the world? Hayden Pantierre (Heroes) George W. Bush (ex-President of the USA) Christy Carlin […]
A correspondent notes CJR found a good scoop by the FT: Merrill Lynch paid out about $4 billion in bonuses just days before Bank of America took it over, the Financial Times says this morning. What raises the eyebrows is the timing: Merrill paid its bonuses before the year was even up, “an unusual step” […]
Willem Buiter, whose early posts at Maverecon were the epitome of restraint, calls for nationalisation: By throwing cheap money with little conditionality at the banks, the Fed and the US Treasury may get bank lending going again. By subsidizing new capital injections, they reward bad porfolio choices by the existing shareholders. By letting the executive […]
The whining has started, with most people (e.g., Chris Whalen at The Big Picture) making the obvious mistake of confusing GMAC with General Motors. In the interest of history, I quote myself from the Dark Ages (March 2007) at Tom’s Place: The next time GM explains that its pensioners need to take a hit, it […]
by Divorced one like Bush February 26, 2008 I posted a question: How are we going to fix a money from money economy. Quoting that post: There is a nice chart. (A few actually). Especially this one.” And this: Total financial turnover went from $17,804 billion in 1980 to $508,456 billion in 2000. We’ve seen […]
When calling Congresscritters tomorrow, especially for those in NY State, please feel free to remind Senator Schumer’s office that he and Barack Obama were the two people [in contested elections] who finished with the widest margin of victory in 20062004 [h/t to my Loyal Reader and Kohole in comments]—about a 50% margin in both cases. […]
Documentation of a minor disruption: Lehman won’t return “billions” of frozen prime-brokerage assets “in the short term,” said PricewaterhouseCoopers, administrator for the Lehman bankruptcy. Meanwhile, several hedge funds are planning to sing the Bono phrase from “Do They Know It’s Xmastime?”* to their cohorts at Morgan Stanley: Hedge funds that account for less than 10 […]
Let’s stipulate what “everybody knows”: There are some assets in the capital markets, many of which are mortgage-related, that were seriously overvalued over the past several years. Many of the others are Credit-related (CDS and CDOs and the like). Most of the two asset types listed above are reasonable concepts that, if they are commoditized, […]