Bailout

Timing a Greek default

Posted on May 05, 2010
Willem Buiter has joined the group of people convinced that Greece will default. I think he's too optimistic:

How the CDS market could help Greece

Posted on May 05, 2010
Amidst the sober analysis and the bloody riots, one expected artifact of the chaos in Greece has been notable by its absence: fevered finger-pointing at speculators in the credit default swap market.

Art market datapoint of the day, Picasso edition

Posted on May 05, 2010
Holland Cotter today does a great job of disproving Sotheby's auctioneer Tobias Meyer's infamous maxim that "the best art is the most expensive, because the market is so smart".

Who could be chairman of Goldman Sachs?

Posted on May 05, 2010
Splitting the roles of chairman and CEO at a public company is nearly always a good idea. It makes sense at Goldman Sachs, which is reportedly considering it, but if it were to happen, the decision would be a fraught one.

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Counterparties

Posted on May 04, 2010
El-Erian on Greece: "The program and the financing package are bold and unprecedented. They are also incomplete." -- FT

Reinhart explains that Greenspan quote

Posted on May 04, 2010
It's official: Greenspan wasn't talking about the housing bubble, or economic policy at all, in the now-famous quote from the March 2004 minutes where he talks about the risks "of inducing people to join in on the debate". We've got it straight from the horse's mouth: Vincent Reinhart is the man that Greenspan was talking to, and he explains exactly what the context was:

The Goldman defenders

Posted on May 04, 2010
Is it just me, or are the defenders of Goldman Sachs becoming more vocal and more numerous these days? Andrew Ross Sorkin today seems to come down squarely on the side of Warren Buffett and Bill Ackman, defending Buffett from accusations that his stance on Goldman is self-serving ("his stake in Goldman is more a loan than an investment, so he?ll no doubt be paid no matter what happens with the Abacus suit") and agreeing with Buffett that there seems to be something of a witch-hunt going on:

Failing to regulate the buy side

Posted on May 03, 2010
Politico's Chris Frates has a good story today on the magnitude of buy-side lobbying efforts:

Counterparties

Posted on May 03, 2010
This will go down in history as the high point of Charlie Rose's career -- WSJ

Why should Americans care about Greece?

Posted on May 03, 2010
I was on All Things Considered Sunday, talking about "why Europe's debt crisis matters to Americans". It's a question I've been asked quite a lot of late, and I have to admit I'm having difficulty answering it. I'm a sovereign-debt geek -- just ask me about collective action clauses, exit consents, and the Sovereign Debt Restructuring Mechanism next time you're suffering from insomnia -- so I naturally find all of this fascinating...

Did Greenspan try to quash a housing-bubble debate?

Posted on May 03, 2010
The Huffington Post is running hard with Ryan Grim's story about recently-released Fed minutes from 2004. "Greenspan Wanted Housing-Bubble Dissent Kept Secret" is the headline, and it's running with a large and unflattering picture of Greenspan.

Goldman enters rehab

Posted on May 03, 2010
Mihaela Lica was writing about Goldman Sachs hiring ?Master of Disaster? Mark Fabiani last Tuesday, with the news that he had helped prep Lloyd Blankfein and Fabrice Tourre for their Congressional grillings. Maybe that's why those two came out of the hearings better than most of the other Goldman executives who testified.

Why the Greek bailout won?t work

Posted on May 03, 2010
Paul Krugman has an intriguing pair of back-to-back blog entries. On Sunday afternoon, he wrote this: The plan still requires savage austerity on Greece?s part, and ensures a terrible few years for the Greek economy. But it does rise to the scale of the problem, and it might work...

Blaming Rubin

Posted on May 01, 2010
My commenters are pretty unanimous that I shouldn't have published yesterday's post on Bob Rubin. So I'll not mention the subject again, and leave that debate to the comments of that post. For there's more than enough Rubin debate to go around, especially now that Jacob Weisberg, who co-wrote Rubin's memoir, has published an essay entitled "In Defense of Robert Rubin".

Counterparties

Posted on April 30, 2010
Justice Dept. Said to Open Goldman Inquiry -- NYT

Angus Maddison, RIP

Posted on April 30, 2010
My reference library is the internet. But I do have a few indispensible books on my shelves, and right next to the OED is Angus Maddison's magisterial The World Economy: A Millennial Perspective. The product of a lifetime's erudition and research, it might get updated over the coming few decades but I doubt it will be replaced for a very long time, if ever.

Has Greece hired restructuring advisers?

Posted on April 30, 2010
Euroweek's Southpaw column starts off explosively:

Bob Rubin sex scandal: He can?t get past second base

Posted on April 30, 2010
Now this is what we really need on a Friday afternoon: a Bob Rubin sex scandal!

Does Justice care if Goldman settles its SEC suit?

Posted on April 30, 2010
Why did Goldman stock fall so far today? It's pretty standard practice for SEC complaints to get forwarded over to Justice, so the news that Justice was looking at Goldman could hardly have come as all that much of a surprise to the market. But perhaps Justice isn't looking at Abacus: if it's looking at Timberwolf instead, then that's a whole new can of worms for Goldman to deal with, and would help turn one bad deal into a fully-fledged pattern of criminal behavior.

Housing quiz answers

Posted on April 30, 2010
The wisdom of crowds, it turns out, is pretty reliable. I asked for the names of the two cities at the top of the housing-price and price-to-rent scales, and the correct answers started rolling in immediately: Honolulu and San Jose. Here's the chart with a bunch more names added in:

Europe?s strained marriage

Posted on April 30, 2010
On Monday, I looked at Germany's attitude to Greece from a nationalist/tactical perspective, and promptly got slapped down by dsquared: "Congratulations," he wrote, "you?ve proved the impossibility of not only the 2004 and 2007 accessions, but also of the Common Agricultural Policy...

Switzerland?s non-exposure to Greece

Posted on April 30, 2010
Remember all those Swiss banks with massive exposure to Greece? Er, never mind. The WSJ's Brian Blackstone has this great little chart, which shows Switzerland's $79 billion of exposure falling by 95% between the third and fourth quarters. He's got to the bottom of what exactly happened, too...

Goldman?s settlement strategy

Posted on April 29, 2010
I believe Mark DeCambre's sources: Goldman Sachs is seeking to settle with the SEC -- and with the hedge fund which invested in the "shitty" Timberwolf deal, too. More generally, if you bought any toxic assets off Goldman during the financial crisis, now is probably the best possible time to sue them for losses...

Counterparties

Posted on April 29, 2010
Two great posts on Goldman by Steve Waldman -- Interfluidity, ibid

Is USAID broken?

Posted on April 29, 2010
My panel at the Milken conference was pretty sparsely attended, for good reason: not only was it up against comic-book superheroes, but it was also up against a real-life superhero, Clare Lockhart, who was on the Expeditionary Economics panel and who has some trenchant and compelling ideas about how to fix failed states...

Housing quiz

Posted on April 29, 2010
Chart of the day comes from Richard Florida:

Fuld?s perjury

Posted on April 29, 2010
Dick Fuld said under oath that he was paid less than $310 million from 2000 through 2007, and that he held, rather than sold, the "vast majority" of his shares, if not all of them. But it's becoming increasingly clear that he was lying. The latest bombshells come from former Lehman lawyer Oliver Budde, who spent many years drafting the bank's compensation disclosures and hiding the restricted stock unit (RSU) component of Fuld's pay...

Another RSS feed gets truncated

Posted on April 29, 2010
One of the things missing from the Great RSS Truncation Debate (see me, passim, ad nauseam) is much in the way of empirical data. So, in the wake of the WSJ's recent decision to truncate its blogs' RSS feeds, it's going to be interesting to see what happens over at Above The Law...

How the Greek crisis is the ECB?s fault

Posted on April 29, 2010
Peter Boone and Simon Johnson have a long and dense post on the eurocrisis today, which has a lot of different diagnoses and conclusions. I don't agree with all of it, but I do think they touch on something important when they trace it all back to the way that the ECB became a quasi-fiscal agent:

El-Erian says Greece will default

Posted on April 28, 2010
Mohamed El-Erian has an important piece on Greece in tomorrow's FT; if you want to boil his 750-word article down to 3, it's basically "Greece will default".

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