Author Archives: Felix

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

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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

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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

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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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Suprime Collateral Damage: Homes in Chelsea (London)

Yves Smith of Naked Capitalism submits: Bloomberg tells us that sales of 2 million pound ($4 million) homes and flats in London are on hold as buyers pull back, expecting subprime woes to put a damper on City bonuses this … Continue reading

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Central Bank Efforts to Stabilize Money Markets May Not Be Working

Yves Smith of Naked Capitalism submits: An update from Bloomberg tells us that commercial paper outstandings fell 4.2% in a week, which suggests the efforts of central bankers to restore confidence in that market, and particularly in asset backed commercial … Continue reading

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Special Situation: Lehman Subprime Unit Shutdown

Yves Smith of Naked Capitalism submits: The securities industry is highly cyclical, and like the markets they trade in, Wall Street firms are prone to overshoot and undershoot. Executives cut too deeply in downturns, resolve not to repeat that mistake … Continue reading

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Paulson Hoist on His Own Petard (Yuan Version)

Yves Smith of Naked Capitalism submits: One of the Treasury Department’s big campaigns has been to put pressure on the Chinese to allow the yuan to float more freely (the Chinese now engage in a dirty float in place of … Continue reading

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Do-It-Yourself Dubious Accounting

Yves Smith at Naked Capitalism reports: Part of the hangover that followed the dot-com bubble was rampant accounting fraud. Before then, accounting chicanery was virtually unheard of in Fortune 500 companies. It instead cropped up at high fliers with loose … Continue reading

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Press Burnishing of Presidential Image

Yves Smith of Naked Capitalism submits: The media is typically kind to newly-elected leaders, so now it’s Sarkozy who is getting favorable press treatment. And when we say “burnishing image,” we mean it literally. From the BBC: The French magazine … Continue reading

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Mortgage Delinquency Rises at Fastest Rate in 17 Years

Yves Smith of Naked Capitalism submits: Bloomberg informs us that the FDIC has released data showing that mortgages over 90 days past rose over 36% from second quarter last year to second quarter this year, the biggest increase since 1991. … Continue reading

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The Financial Times’ Martin Wolf Defends the Fed

Yves Smith of Naked Capitalism submits: Normally, I have the highest regard for Martin Wolf, the Financial Times’ lead economics writer. He is forthright, data-driven, articulate, and insightful. However, I take issue with his current article, “The Federal Reserve must … Continue reading

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Bush’s FHA Band-Aid

Yves Smith of Naked Capitalism submits: The Bush Administration, which resisted proposals to have Fannie Mae and Freddie Mac buy more mortgages to alleviate stress in the housing markets, is instead looking to the Federal Home Administration, which traditionally has … Continue reading

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Harvard Gets It Right Again

HMC had a truly phenomenal fiscal 2007.
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Has Smoke and Mirrors Worked?

Yves Smith at Naked Capitalism submits: In an inspired bit of stagecraft, Senate Banking Committee Chairman Christopher Dodd reported today on a meeting with Fed chairman Ben Bernanke and Treasury secretary Henry Paulson that the Fed stood ready to use … Continue reading

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