Bailout

Counterparties

Posted on March 06, 2010
Vikram, you're wrong. the drop in Citi stock was your fault. Not the fault of short sellers -- Alphaville

The arguments for stronger derivatives reform

Posted on March 05, 2010
The big systemic problems happen when leveraged actors think that they're not engaging in risky, speculative behavior -- when banks become complacent about the credit risk in anything carrying a triple-A credit rating, for instance, or when prime brokers are so overconfident with regard to prices moving smoothly and continuously that they unwittingly put themselves on the hook should a highly-levered fund like LTCM suddenly face discontinuous markets...

Why is Treasury denying its TBTF guarantee?

Posted on March 05, 2010
Simon Johnson is right to be dismayed about this:

Jobs chart of the day

Posted on March 05, 2010
Ouch. From Catherine Rampell:

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The lies of bankers

Posted on March 05, 2010
It's journalism-awards season right now, and I've been having a lot of discussions of late about whether and how to give out awards for blogs. And one of the points I make repeatedly is that if you're going to do that (and I'm not convinced that it's a good or workable thing to do), then the quality of the comments has to be a key consideration in the judging...

Counterparties

Posted on March 05, 2010
The day trader with 40 computer monitors -- Lifehacker

Even more incentive for the banks to kill the CFPA

Posted on March 04, 2010
Stacy Kaper has a good story today explaining how the CFPA compromise that we seem to be moving towards -- putting a toothless agency inside the Fed -- is bad not only for consumers but also for banks:

AIG was even sleazier than you thought

Posted on March 04, 2010
I knew that AIG was technically a thrift, but I thought that was just a piece of nimble-footed regulatory arbitrage in an attempt to get itself regulated by the pointless Office of Thrift Supervision. It turns out, however, that AIG was actually a pretty substantial mortgage lender, through its AIG Federal Savings Bank and Wilmington Finance subsidiaries...

The SEC: still toothless

Posted on March 04, 2010
Does Mary Schapiro's SEC have teeth? There was hope that it might, when she was confirmed -- but the tale of her treatment of Salvatore Sodano, the former CEO of the American Stock Exchange, indicates otherwise.

Greece reaps the benefit of its CDS market

Posted on March 04, 2010
Great news from Greece: its brand-new ?5 billion, 10-year bond issue was three times oversubscribed and is already rising in the secondary market, after pricing at a spread of 300bp over the mid-swap rate. Greece is paying a 6.4% yield on the issue, which is pretty affordable in the grand scheme of things, given how much trouble it's in right now...

The politics of debt in Zimbabwe

Posted on March 04, 2010
It's worth remembering, in an era where Greece and other countries are being pilloried for fudging the amount of their national debt to make it look smaller than it actually is, that there's another group of countries which is often accused of the equal and opposite crime...

Counterparties

Posted on March 04, 2010
Citi on sovereign CDS: "You Can't Blame the Mirror for Your Ugly Face" -- Scribd

Did Rubin really say that?

Posted on March 03, 2010
This Huffpo article has no byline, and the quote is mostly an indirect one, but if Bob Rubin said anything like this he deserves all the pillorying that he's getting, and more: Much of the blame for the current crisis falls on the shoulders of the fiscal policy decisions of the Bush administration, Rubin said, under which "we lost a decade to some extent...

CDS demonization watch, Morgenson/Münchau edition

Posted on March 02, 2010
Maybe the reason that politicians spout such nonsense on credit default swaps and the like is that they read newspapers, and believe what they read. Two different high-profile newspaper columnists confused Greek credit swaps in 2010 with Greek currency swaps in 2001, for instance, on Sunday alone, and I'm not sure which was worse, although I'll give the prize this time to the FT.

Counterparties

Posted on March 02, 2010
Morgan Stanley spin-off to wed JP Morgan spin-off: isn't that a bit like marrying your first cousin? -- Reuters

Can government get banks lending?

Posted on March 01, 2010
In 2001, after the 9/11 attacks, former President George W. Bush signed into law a $15 billion airline bailout, and I remember reading (I can't find it now) a cogent argument that it really didn't make much sense, since the airline business was reasonably competitive...

Counterparties

Posted on March 01, 2010
Citi's 2009 compensation. John Havens made more than Lloyd Blankfein -- SEC

Annals of Goldman Sachs client relations, Michael Lewis edition

Posted on March 01, 2010
Vanity Fair has a long excerpt from Michael Lewis's excellent new book, The Big Short. The excerpt follows Michael Burry, a hedge-fund investor who was almost too early getting short the subprime housing market, and who managed to annoy his investors mightily despite making them millions of dollars...

The nonsensical political rhetoric on Greece

Posted on March 01, 2010
Can someone explain to me why and how politicians seem to be particularly susceptible to getting the issue with Greek credit default swaps completely backwards? And why reporters simply parrot their nonsense, rather than calling them on it? Exhibit A is Carolyn Maloney -- my very own representative in Congress, whose district covers all of the big Wall Street firms in Midtown -- as reported in the FT:

What bankers can learn from arc-welder manufacturers

Posted on March 01, 2010
The WSJ today gives a surprisingly favorable review to Spark, by Frank Koller, a book extolling the virtues of Cleveland manufacturer Lincoln Electric and its no-layoffs policy:

The death of the CFPA

Posted on February 28, 2010
Edmund Andrews, freed from the strictures of writing for the NYT, is proving to be a valuable addition to the econoblogosphere: today he not only writes smartly about Chris Dodd's CFPA compromise, but also posts the actual document. That's more than the NYT, WSJ, or Bloomberg managed to do...

Counterparties

Posted on February 27, 2010
Konczal finds a good financial innovation, called TRACE -- Rortybomb

Deconstructing Buffett

Posted on February 27, 2010
Alice Schroeder has two interesting takes on Berkshire Hathaway's acquisition of Burlington Northern. In her BusinessWeek cover story on Warren Buffett, she explains the hidden upside:

In praise of invisible payments

Posted on February 26, 2010
Let's welcome easy ways of paying for parking, along with easy ways of paying taxes. They're a lot less unpleasant than the alternatives.

What happens to house prices when the Fed stops buying MBS?

Posted on February 26, 2010
Paul Smalera asks what's going to happen to mortgage rates after March 31, when the Fed has said that it will stop buying mortgage-backed securities. The answer, predictably, is that they're going up:

Can we spin off a CFPA bill?

Posted on February 26, 2010
Matthew Yglesias proposes a divide-and-conquer strategy when it comes to pushing through financial reform legislation: get the systemic stuff done with the help of Bob Corker, and then draft a second bill, with the help of some other Republican, creating a Consumer Financial Protection Agency.

There?s nothing fabulis about Citibank

Posted on February 26, 2010
Jennifer Valentino-DeVries has a good post on l'affair Fabulis, in which a gay entrepreneur named Jason Goldberg was told by Citibank that his website "was not in compliance with Citibank?s standard policies" before receiving a fulsome apology from Bill Brown, the head of branch banking in New York...

The sensationalist WSJ

Posted on February 26, 2010
Here's the front page of today's WSJ; I think it says a lot about where Rupert Murdoch and Robert Thomson are taking the paper.

Counterparties

Posted on February 25, 2010
Aaargh! The Obama administration is no longer insisting on the creation of a stand-alone consumer protection agency -- Wapo

Ten reasons to ignore David Weidner

Posted on February 25, 2010
In the spirit of Weidner's article, then, let's see if we can come up with ten reasons to ignore it: The headline, "Ten Wall Street Blogs You Need To Bookmark Now", reads like a parody of Blodget link-bait, especially when you realize that they've all been around for a while and that there's really no rush here...

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