Monthly Archives: August 2007

140 Million Facing “Arsenic Time Bomb”

Yves Smith at Naked Capitalism submits: The BBC, reporting on a meeting at the Royal Geographical Society, says that 140 million people in developing countries are drinking water with such high concentrations of arsenic as to constitute poisoning. Experts estimate … Continue reading

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Bush’s Mainly Cosmetic Homeowner Rescue Proposals

Yves Smith at Naked Capitalism submits: The Wall Street Journal, in “Bush Moves to Aid Homeowners,” reports that today the President will set forth a program to help stressed borrowers at risk of losing their homes. Main elements: Allowing the … Continue reading

Posted in bonds and loans, housing, Politics | Comments Off

AAA to CCC and Other Rating Agency Horror Stories

Yves Smith at Naked Capitalism submits: The news from rating agency land goes from bad to worse. This Bloomberg article does much to explain why investors are avoiding subprime like the plague. AAA paper revealed to be CCC. Repeated incidents … Continue reading

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Hedge Funds: Good Activists?

Yves Smith at Naked Capitalism submits: Hedge funds, even at their peak of popularity, were regarded with considerable suspicion. They have taken a shellacking in the last few months as subprime tainted funds have folded or reported poor results, and … Continue reading

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Commercial Paper Market Still in Distress

Yves Smith at Naked Capitalism submits: Bloomberg tells us that the commercial paper market is shrinking rapidly. This is a more serious issue than might appear. Commercial paper is an important, if not the most important, source of short-term funding … Continue reading

Posted in banking, bonds and loans, fiscal and monetary policy, regulation | Comments Off

The WSJ’s Greg Ip Defends Bernanke Against Martin Wolf

Yves Smith at Naked Capitalism submits: Frankly, this is pathetic. If Bernanke and his minions can’t take the heat of some well-deserved criticism from the highly-regarded Martin Wolf of the Financial Times, they don’t belong in public service. To recap: … Continue reading

Posted in Media, Politics, regulation | 4 Comments

How Greenspan Diminished the Fed

Yves Smith at Naked Capitalism submits: It must be miserable to be a central banker these days. Not only are they confronted with the worst mess in at least a generation, but too many interested parties, from the financial services … Continue reading

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S&P: Wall Street May Take Worse Hit Than in 1998

Yves Smith at Naked Capitalism submits: Bloomberg reports that a Standard & Poors report points to a steeper fall in Wall Street earnings for the second half of 2007 than in the Russia default/LTCM crisis period, the second half of … Continue reading

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Climate Change Flooding Risk Underestimated

Yves Smith at Naked Capitalism submits: The BBC, citing a study in Nature, informs us that climate change models have underestimated the risk of flooding. High atmospheric carbon dioxide levels mean plants suck less water out of the soil. Wetter … Continue reading

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New Business Opportunity: SMS Loan Sharking

Yves Smith at Naked Capitalism submits: Lucy Kellaway, a Financial Times columnist who writes about corporate fads, once said no new business technique is too ridiculous to be put into practice. The Springwise newsletter (“New business ideas for entrepreneurial minds”), … Continue reading

Posted in banking, bonds and loans, personal finance, regulation | 1 Comment

Martin Wolf Takes Bernanke to the Woodshed

Yves Smith at Naked Capitalism submits: Oh, I do so enjoy it when the Financial Times’ chief economics editor, the normally measured and thoughtful Martin Wolf, works himself into a lather. Wolf blasts what he reads as the Fed’s vow … Continue reading

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Foreigners Demanding a Say in US Market Regulation

Yves Smith at Naked Capitalism submits: Some reformers have argued that we are at the end of a regulatory paradigm and need to consider fundamental change in securities laws. It turns out some foreign regulators are already making that case. … Continue reading

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Corporate Deleveraging May Be Overstated

Yves Smith at Naked Capitalism reports: BreakingViews (free subscription required) reports that the degree of deleveraging of corporate balance sheets may be exaggerated. Yet another reason to look at stocks with a wary eye. Readers may know that the level … Continue reading

Posted in bonds and loans, investing | Comments Off

Default Rates Set to Rise?

Yves Smith of Naked Capitalism submits: The Financial Times’ Lex column today (subscription required) takes issue with those who take comfort in the oft-quoted statistic that default rates are at a 25 year low. The article shows a long-term, unrelenting … Continue reading

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Do We Need to Bail Out Homeowners? (Nouriel Roubini Edition)

Yves Smith of Naked Capitalism submits: Has Roubini gone to the Dark Side? Nouriel Roubini, normally the voice of prudence, makes a marked shift in his latest post, “Fiscal versus Monetary Solutions to the Subprime Crisis. ” He sympathizes with … Continue reading

Posted in banking, bonds and loans, housing, Politics | Comments Off

Larry Summers’ Unanswered Questions

Yves Smith at Naked Capitalism submits: Today, in a comment at the Financial Times, “This is where Freddie and Fannie step in” (subscription required), Harvard’s Larry Summers argued that the subprime crisis highlights three questions. Most commentators focused on the … Continue reading

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Bear Liquidation May Create New Woes for Hedge Funds

Yves Smith at Naked Capitalism submits: Bloomberg tells us a judge is questioning the legal domicile of the failed Bear funds for bankruptcy purposes: A federal judge refused to grant permanent protection from U.S. lawsuits for Bear Stearns Cos.’ two … Continue reading

Posted in hedge funds, law | Comments Off

The Falling Price of Luxury Cars

If Jaguar slashed the price of its cars by 75%, demand would go through the
roof. So what’s going to happen now Ford is slashing the price of Jaguar?
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Extreme Measures II: Gillian Tett at the Financial Times

Yves Smith at Naked Capitalism submits: Recently, we’ve noticed a new theme among economics writers: Extreme Measures. Commentators have looked toward the end of the road we are on and fear it leads to a precipice. Hence the calls for … Continue reading

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Willem Buiter on How Central Bankers Are Co-Opted

Yves Smith of Naked Capitalism submits: A reader pointed me to Willem Buiter’s blog, and it is a real find. For those who haven’t heard about him, he (along with Anne Siber) has proposed a rethinking of central bankers’ roles … Continue reading

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Extreme Measures I: Bill Gross at Pimco

Yves Smith of Naked Capitalism submits: We’ve noticed a new theme among economics writers: Extreme Measures. Commentators have suddenly looked into the abyss, either of the depth of the US subprime/housing problem or the progressing credit crunch that has already … Continue reading

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Dispelling the Myth of Low Unemployment

Yves Smith of Naked Capitalism submits: Doing some weekend catch-up, and a reader pointed me to a very good post by Barry Ritholtz, which confirms something I’ve believed but haven’t gone to the trouble to prove, namely, that unemployment is … Continue reading

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Fed Acts More Directly to Shore Up Battered Asset-Backed Commercial Paper Market

Yves Smith at Naked Capitalism submits: To recap the turmoil in the money markets: the problem stems from a near-complete repudiation of asset-backed commercial paper, which constitutes roughly half of commercial paper outstandings. The reason for the concern is most … Continue reading

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Thinking the Unthinkable: Regulating the Brave New World of Finance

Yves Smith at Naked Capitalism submits: Earlier this week, I sought to frame the prevailing views of what the supervising adults, namely central bankers, should do about the turmoil in the financial markets. They break down into four groups (names … Continue reading

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Ken Lewis’s Savvy Countrywide Investment

Bank of America has managed to nab itself a very attractive
investment in Countrywide.
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Posted in banking, housing | Comments Off