Category Archives: banking

Commercial Paper Market Still in Distress

Posted on August 30, 2007 by Felix

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 →

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New Business Opportunity: SMS Loan Sharking

Posted on August 29, 2007 by Felix

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

Default Rates Set to Rise?

Posted on August 28, 2007 by Felix

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)

Posted on August 28, 2007 by Felix

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

Posted on August 27, 2007 by Felix

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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Extreme Measures II: Gillian Tett at the Financial Times

Posted on August 27, 2007 by Felix

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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Extreme Measures I: Bill Gross at Pimco

Posted on August 26, 2007 by Felix

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

Posted on August 24, 2007 by Felix

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

Posted on August 24, 2007 by Felix

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

Posted on August 24, 2007 by Felix

Bank of America has managed to nab itself a very attractive
investment in Countrywide.
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Central Bank Efforts to Stabilize Money Markets May Not Be Working

Posted on August 23, 2007 by Felix

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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Has Smoke and Mirrors Worked?

Posted on August 21, 2007 by Felix

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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Stretching Credulity on Identity Theft Costs

Posted on August 21, 2007 by Felix

Yves Smith of Naked Capitalism submits: A solid article in ComputerWorld tells us that data theft is getting worse. In the ongoing struggle between the security mavens and the data thieves, the bad guys are gaining ground. They are getting … Continue reading →

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The Fed Kills the Shorts?

Posted on August 17, 2007 by Felix

Traders were supposedly heavily on the put side today, an options expiration day, so the stock market response to the Fed’s discount rate cut seems surprisingly subdued.
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Paul Krugman Does a Hail Mary Pass

Posted on August 17, 2007 by Felix

Krugman recommends that the Federal government buy mortgages to rescue stressed borrowers. Does he realize that the only realistic way to make this happen in our Brave New World of voodoo credit is to expropriate assets?
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Posted in banking, housing, regulation | 1 Comment

Our Fragile Financial System

Posted on August 16, 2007 by Felix

Funny how quickly our financial system went from “robust” and “well-diversified” to “fragile.”
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One Question for David Viniar

Posted on August 14, 2007 by Felix

What, exactly, was it that saw a 25 standard deviation move?
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When Volatility Strikes

Posted on August 10, 2007 by Felix

We’re not on the brink of Armageddon.
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Countrywide vs Barclays in the Stock Market

Posted on August 10, 2007 by Felix

A quick update for those of you keeping track of shares in the finance industry.
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Analyzing Bear Stearns’s Credit Portfolio

Posted on August 8, 2007 by Felix

I find the bearish case more persuasive than the bullish.
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Credit Market Datapoint of the Day

Posted on August 8, 2007 by Felix

Serena Ng says that Bear Stearns paid
"a heavy price" when it issued $2.25 billion of five-year bonds
at 245bp over Treasuries on Monday.
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Andre Esteves, UBS’s Very Expensive New Debt Head

Posted on August 7, 2007 by Felix

At the end of 2006, UBS bought Brazil’s Banco Pactual for $2.6 billion. The
managing partner of Pactual, Andre Esteves, owned 30% of Pactual,
and so, naturally, he stayed on salary at UBS.
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Subprime in Germany

Posted on August 3, 2007 by Felix

Who or what is an IKB? I know there are lots of obscure European banks, but
IKB is obscure even by German standards. And somehow – really, no one
seems to have the foggiest notion how – IKB’s Rheinland Funding vehicle
seems to have contrived to amass an eye-popping €17 billion ($23 billion)
in US
subprime exposure.
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Why Chuck Prince Should Embrace His Unexciting Side

Posted on August 3, 2007 by Felix

No one, with the possible exception of Sandy Weill, has ever
been particularly impressed with Chuck Prince. But Citigroup’s
CEO has always seemed at least to be a feet-on-the-ground kind of guy, a safe
pair of hands for when the bank is going through regulatory storms.
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Why Bear Stearns Might Be Sold

Posted on August 3, 2007 by Felix

Thanks to Helen Thomas for reminding
me that I reckon a Bear Stearns takeover ain’t going to happen – or
at least that I thought
that a month ago. But since the FT is revisiting
the issue, it’s worth taking another look.
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