Monthly Archives: February 2009

Obama’s Housing Plan Unveiled

Posted on February 18, 2009 by Felix

I have to say I like the look of Obama’s housing-bailout plan. It’s quite elegant, and makes full use of the fact that Fannie and Freddie are now owned by the US government — which means they can be forced … Continue reading →

Posted in housing | 3 Comments

Did the Feds Kill the SEC’s Stanford Investigation?

Posted on February 18, 2009 by Felix

There’s a tantalizing tidbit at the end of the NYT’s Stanford report today: The current S.E.C. charges stem from an inquiry opened in October 2006 after a routine exam of Stanford Group, according to Stephen J. Korotash, an associate regional … Continue reading →

Posted in fraud | 4 Comments

Stanford: Criminal Charges Almost Certain

Posted on February 18, 2009 by Felix

The SEC case against Allen Stanford comprises little more, right now, than a civil complaint; more private cases are now being filed. What does this mean for Stanford himself? Is he subject to arrest anywhere in the world? I asked … Continue reading →

Posted in fraud | 4 Comments

MBIA’s New Structure

Posted on February 18, 2009 by Felix

It’s taken rather longer than anybody exepected, but MBIA has finally put in place its long-promised plan to split up the company into its component parts, with the relatively strong public finance insurer getting a new name — National Public … Continue reading →

Posted in insurance | 3 Comments

Extra Credit, Tuesday Edition

Posted on February 17, 2009 by Felix

Automakers Seek $14 Billion More in Aid: And will surely seek more still, in a couple more months, if they get this now. Bill Moyers interviews Simon Johnson: Video here. Investors caught as regulators swoop on Stanford: The game was … Continue reading →

Posted in remainders | 1 Comment

Adventures in Flackery, Private Jet Edition

Posted on February 17, 2009 by Felix

Two high-profile financial columnists filed two strikingly similar opinions on corporate jets today: A private plane is really a flying office. It is a way for a busy executive to get from one place to another as efficiently as possible, … Continue reading →

Posted in ben stein watch, Media | 2 Comments

Allen Stanford, Ponzi Operator

Posted on February 17, 2009 by Felix

Patrick Kidd says that Allen Stanford is "another victim of the biggest economic crisis since the 1930s"; Joe Wiesenthal says that nobody is accusing Stanford of being another Ponzi scheme. So before this meme takes root, let’s be clear about … Continue reading →

Posted in fraud | 5 Comments

Stanford: The Manhunt Begins

Posted on February 17, 2009 by Felix

Given the amount of time that the SEC and the media have been sniffing around his operation, today’s fraud charges can’t have come as much surprise to Allen Stanford. And given that he owns banks in many different jurisdictions (the … Continue reading →

Posted in fraud | 2 Comments

Millennium: A Stanford Copy-Cat

Posted on February 17, 2009 by Felix

Adrienne Carter has found what looks very much to be the first — but surely not the last — of banks which won’t withstand much if any scrutiny in the wake of the Stanford collapse. Does any of this sound … Continue reading →

Posted in banking, fraud | 2 Comments

Stanford: How Quickly did the SEC Move?

Posted on February 17, 2009 by Felix

According to the SEC press release, it has acted with lightning speed: Said Linda Chatman Thomsen, Director of the SEC’s Division of Enforcement: "We are moving quickly and decisively in this enforcement action to stop this fraudulent conduct and preserve … Continue reading →

Posted in fraud | 2 Comments

Highlights of the SEC Complaint Against Stanford

Posted on February 17, 2009 by Felix

The SEC complaint against Stanford is quite astonishing. Here are some of the highlights, which include a slew of outright lies and even an investment with Bernie Madoff. Impossibly, Stanford’s portfolio managed to rack up identical 15.71% back-to-back returns in … Continue reading →

Posted in fraud | 3 Comments

Stanford: The SEC Moves

Posted on February 17, 2009 by Felix

The SEC has frozen all the assets of Allen Stanford and his companies, as well as those of his CFO and CIO. I think you can guess why: The SEC’s complaint, filed in federal court in Dallas, alleges that the … Continue reading →

Posted in fraud | 2 Comments

Taxing Falling Carbon Emissions

Posted on February 17, 2009 by Felix

Back in November 2007, in a long post on the relative merits of a carbon tax and a cap-and-trade system, I said that one big advantage of cap-and-trade was that it was "a dynamic hedge of fat-tail CO2 risk". The … Continue reading →

Posted in climate change | 2 Comments

GE Datapoint of the Day

Posted on February 17, 2009 by Felix

Rolfe Winkler has run the numbers on how GE compares to other banks (yes, GE is a bank) and has come to the conclusion that as of December 31, GE had total tangible common equity of… wait for it… $5 … Continue reading →

Posted in stocks | 2 Comments

Geithner’s Vagueness Explained

Posted on February 17, 2009 by Felix

How could Geithner’s much-vaunted financial rescue plan have been so stunningly vague on arrival, given the amount of time he’d worked on it? The Washington Post reveals that in fact he’d only been working seriously on it for less than … Continue reading →

Posted in fiscal and monetary policy | 1 Comment

Stanford vs Citi

Posted on February 17, 2009 by Felix

Comment of the day comes from John Slater: You’ve had some interesting posts on Stanford. It appears that they have taken deposits to acquire trading/speculative assets. Not sure that what the big trading banks have done is all that different … Continue reading →

Posted in banking | 3 Comments

Extra Credit, Monday Edition

Posted on February 17, 2009 by Felix

Wristcutters: An Economic Story: My Bloggingheads diavlog with Jesse Eisinger. Saving Federal Arts Funds: Selling Culture as an Economic Force: The Senate voted against it, but $50 million in extra arts funding did make it into the final stimulus bill. … Continue reading →

Posted in remainders | 1 Comment

Alex Dalmady, the MSM, and Stanford

Posted on February 16, 2009 by Felix

Alex Dalmady, the analyst who broke the Stanford story, has a blog now, and he’s not afraid to use it: his latest blog entry has appeared with the headline "The WALL STREET JOURNAL can kiss my ass!": (Update: Dalmady’s entire … Continue reading →

Posted in fraud, Media | 1 Comment

America’s Insolvent Banks

Posted on February 16, 2009 by Felix

John Hempton has 5,155 words on bank insolvency today, and makes the good point that "insolvency" is not well-defined. So what do I mean when I say that some big banks are insolvent? I mean that when you look at … Continue reading →

Posted in bailouts, banking | 2 Comments

The Psychic Bailout

Posted on February 16, 2009 by Felix

Guess what? It turns out that hope is a plan, after all! Six middle-aged Englishwomen have decided that they can get the country to "overcome whatever obstacles and difficulties we may face as a country, an economy and as individuals": … Continue reading →

Posted in bailouts | 1 Comment

How the Economic Sausage is Made

Posted on February 16, 2009 by Felix

Gregory Clark reveals all: Recently a group of economists affiliated with the Cato Institute ran an ad in the New York Times opposing the Obama stimulus plan. As chair of my department I tried to arrange a public debate between … Continue reading →

Posted in economics | 1 Comment

The Kanjorski Meme, Mark II

Posted on February 16, 2009 by Felix

Tyler Cowen is now talking about the Kanjorski Meme Mark I (I thought I’d dealt with that one already) — but that’s not the end of the story, as Sam Jones demonstrates today. Sam has what you might call the … Continue reading →

Posted in bonds and loans, Politics | 2 Comments

Japan’s Whiplash

Posted on February 16, 2009 by Felix

Edward Hugh has a good summary of what he calls Japan’s “unimaginable” contraction — the one which resulted in that 12.7% annualized fall in GDP in the fourth quarter. One important lesson, here, is that it’s foolish placing much faith … Continue reading →

Posted in economics | 1 Comment

Extra Credit, Sunday Edition

Posted on February 15, 2009 by Felix

GM to Offer Two Choices: Bankruptcy or More Aid: And if it gets the "more aid", it’ll surely be back for yet more later. This risks becoming the bottomless bailout. Do Androids Dream of Apple-Blackberry Crumble? The demise of the … Continue reading →

Posted in remainders | 1 Comment

New York Employment Datapoint of the Day

Posted on February 15, 2009 by Felix

From Richard Florida’s Atlantic cover story: Financial positions account for only about 8 percent of the New York area’s jobs, not too far off the national average of 5.5 percent. By contrast, they make up 28 percent of all jobs … Continue reading →

Posted in cities, employment | 1 Comment