Bailout

Is the stock market pricing in U.S. fiscal tightening?

Posted on August 23, 2010
Why are stocks yielding more than bonds? The expected 2011 earnings of US stocks are more than 8% of their current price, while bonds yield much less than that. Rob Dugger has an interesting explanation: the market is looking at fiscal deficits as far as the eye can see, and trusts the US government to close the fiscal gap over the medium to long term...

Why hedge funds are less risky than banks

Posted on August 23, 2010
I’ve been waiting for a good critical review of Sebastian Mallaby’s tome on hedge funds, and the longer that we go without one, the stronger Mallaby’s pro-hedgie case would seem to be. Now, Noam Scheiber comes along in the New Republic, and his criticisms of Mallaby are pretty unconvincing: The Financial Times reported earlier this month [...

ShoreBank, RIP

Posted on August 20, 2010
Remember the Shorebank rescue, back in May? Well, it got lots of headlines at the time, but it didn't pan out in the end, and now Shorebank has failed. The FDIC's deposit insurance fund is taking a $367.7 million loss, and the money which was going to be invested in Shorebank by Goldman, JP Morgan, Citigroup and others is now going to be invested in Shorebank's successor institution, Urban Partnership Bank...

Monetizing Emma

Posted on August 20, 2010
What's scarier than Pride and Prejudice and Zombies? That's easy: Pride and Prejudice and Structured Finance! Which is essentially the theme of Monetizing Emma, a play which I finally got around to seeing at the New York Fringe festival last night. As playwright Felipe Ossa puts it:

To access this complete feed in the blog feed reader login or register for free.

Why Treasury briefings are off the record

Posted on August 20, 2010
Shahien Nasiripour has some excellent detailed notes from the Treasury blogger meeting. And he doesn't hesitate to call out the senior official when doing so is warranted:

Chart of the day: Goldman?s integrity

Posted on August 20, 2010
My Reuters colleague Robert Fullem had a really bright idea a few days ago: he went through all of Goldman Sachs's annual reports, and counted how many times the word "integrity" was used in each one. And the results are pretty interesting. The reports have been getting fatter and fatter: that's the red line in the chart...

401(k) plans aren?t just for retirement

Posted on August 20, 2010
One of the reasons that banks made so much money from overdraft fees is that people are naturally optimistic: they never think, when they open a checking account, that they're going to go overdrawn very often. So overdraft fees aren't a big deal to them at the time...

The WSJ vs Christopher Pia

Posted on August 20, 2010
The WSJ is going big today on this shocker from Susan Pulliam, splashing it across the front page of both the newspaper and the website:

Who rents out houses?

Posted on August 19, 2010
Barbara Kiviat raises an interesting question: who is going to rent out all those houses which got bought by people who never should have been homeowners in the first place?

What is Kroll doing for Montenegro?

Posted on August 19, 2010
Landon Thomas's report from Montenegro is full of fun datapoints, including the fact that the prime minister, Milo Djukanovic, officially gets paid only 1,256 euros per month. There's also a delicious irony in the fact that he avoided prosecution by Italian authorities by declaring diplomatic immunity...

Truth and rhetoric in job creation

Posted on August 19, 2010
The most important and most difficult task facing the Obama administration is making a dent in the unemployment situation. There aren't many things that the government can do to try to boost the number of jobs in the US, but at the top of the list has to be attempts to boost lending to small and medium-sized businesses...

What Treasury?s thinking

Posted on August 19, 2010
Treasury's blogger meeting on Monday has been covered by quite a lot of the participants -- see Lounsbury, Tabarrok, and Smith. On Wednesday, there was another meeting, this time with professional, salaried bloggers, with a decidedly center-left bias...

Google?s email nastiness

Posted on August 18, 2010
Yesterday afternoon, I started wondering why my steady stream of emails seemed to have come to a halt. It didn't take long to get the answer: emails to me were being bounced back to their senders as undeliverable, on the grounds that my Gmail account was over quota.

Counterparties

Posted on August 18, 2010
The software Peter principle: a dying project which is too complex to be understood even by its own developers -- Wikipedia

The Treasury-bubble meme

Posted on August 18, 2010
It's something of an emerging meme: Treasuries are the new dot-com stocks. Barry Ritholtz says so explicitly, while Jeremy Siegel and Jeremy Schwartz lay out the, um, logic:

Can we give minors bank accounts?

Posted on August 18, 2010
Sudeep Reddy has a story today about the latest attempts to try to get bank accounts for the unbanked. Such attempts are always well-intentioned, and nearly always doomed: this is a very tough nut to crack.

How much is Treasury?s housing guarantee worth?

Posted on August 18, 2010
Arnold Kling is incredulous when it comes to Pimco's Bill Gross, who said yesterday that "without a government guarantee, mortgage rates would be hundreds -- hundreds -- of basis points higher, resulting in a moribund housing market for years". "The standard estimate in the literature is that Fannie and Freddie reduce mortgage rates by 25 basis points or less," says Kling, and he's correct: that is indeed the standard estimate...

Counterparties

Posted on August 17, 2010
Steve Schwarzman FTL, by Godwin's law -- Newsweek

I want to rent in Australia

Posted on August 17, 2010
Over recent decades, public companies have steadily paid out fewer and fewer dividends, with little if any complaining from shareholders. They often prefer it when the money is retained in the company or used for share buybacks, because that way they don't need to pay taxes on their dividend income...

Why banks find it so easy to borrow

Posted on August 17, 2010
John Lounsbury attended the most recent meeting between bloggers and Treasury officials, including Tim Geithner. He reports:

Looking at Europe from Uruguay

Posted on August 17, 2010
I had the very good fortune to have lunch today with Carlos Steneri, the veteran Uruguayan debt manager and negotiator who is finally leaving public service after many decades to do some work in the private sector. I've known Carlos for the best part of a decade now, and have the greatest respect for him...

Corporates won?t trade through Treasuries

Posted on August 17, 2010
A rather startling pronouncement pops up on Fortune.com today:

Why the housing bulls never made much sense

Posted on August 17, 2010
Kristopher Gerardi, Christopher Foote, and Paul Willen, of various regional Federal Reserve banks, have a paper which looks at economic research on whether or not there was a housing bubble, and which concludes that "we do not currently have the ability to prevent a bubble from forming or the ability to identify a bubble in real time"...

The mess that is deposit insurance

Posted on August 16, 2010
There are three reasons to have deposit insurance. The first reason is systemic: it prevents bank runs. There's no rush to pull your money out of the bank if you know that the government is guaranteeing your deposits. As a result, the entire banking system becomes much more stable and secure.

The Sheriff Warren rap

Posted on August 16, 2010
Somehow I can't imagine anybody doing this for Michael Barr.

The Fiscal Times vs Elizabeth Warren

Posted on August 16, 2010
What does The Fiscal Times, the online newspaper founded by Pete Peterson, have against Elizabeth Warren?

Do tech entrepreneurs need VCs?

Posted on August 16, 2010
One of the least convincing and most annoying arguments against investing in index funds is the idea that if everybody did it, then the stock market wouldn't be able to efficiently allocate capital any more. Well, yes -- but there will always be people picking and buying individual stocks and funds...

Harvard isn?t divesting from Israel

Posted on August 16, 2010
The noise surrounding a perceived rotation out of Israeli stocks by the Harvard endowment is really rather hilarious. Benjamin Joffe-Walt has managed to amass a whole sequence of quotes from people who have no idea what they're talking about: one person is calling on "all academic institutions in the US" to follow Harvard's lead and "divest from Israeli war crimes"; a second claims Harvard "still have tens of millions of dollars invested"; and a third comes up with the convoluted explanation that it's all to do with the fact that Morgan Stanley no longer considers Israel to be an emerging market:

Counterparties

Posted on August 14, 2010
Freakonomics: if you hated the book, you'll loathe the movie -- YouTube

Regulatory arbitrage of the day, CRA edition

Posted on August 13, 2010
National People's Action have a fascinating report out today about America's big four banks -- Citi, JPM, Wells Fargo, and Bank of America -- and how they all seem to be able to easily obtain "outstanding" ratings on their CRA exams.

Bloggers, promote your law blog by nominating your blog for inclusion in USLaw.com's Law Blog Directory and RSS Reader. Benefits described.