Monti breaks "Eurobond" news to Merkel: "Honey, we're in trouble. We need to pawn the family gold." €2.3TT #lastresort http://t.co/ctFPKRfz
Finance & Markets Channel: Latest Posts
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Finance & Markets
Statement of the Shadow Financial Regulatory Committee on Regulation of Short Selling
During the recent turmoil, short selling has been widely blamed by managers, the media and the Securities and Exchange Commission (SEC) for causing unwarranted declines in the value of financial institutions. The SEC has expressed its fear that false “rumors” might artificially reduce the stock price of financial services firms in particular. This triggered a [...]
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Finance & Markets
Statement of the Shadow Financial Regulatory Committee on The Future of the Government-Sponsored Enterprises
On September 7, the Treasury Department and the Federal Housing Finance Agency (FHFA) announced that the FHFA would take over both Fannie Mae and Freddie Mac (the GSEs) as a conservator for each company. As described by the FHFA, as a conservator it is empowered to put a company “in a sound and solvent condition.” [...]
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Finance & Markets
The Crisis of Confidence and the Banks
“In the autumn of 1929 the mightiest of Americans were, for a brief time, revealed as human beings. Like most humans, most of the time, they did some very foolish things. On the whole, the greater the earlier reputation for omniscience, the more serene the previous idiocy, the greater the foolishness now exposed. Things that [...]
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Emerging Markets
AIG Downgrades of Monday Do Not Trigger Collateral Posting for Swaps, But $14 Billion Needed ASAP
I’ve revised the post since first putting it up, since the point of the two excerpts (assuming the reporting is correct) is that whle the AIG ratings downgrades did trigger the need to post additional collateral, it did not do so for swaps-related exposures. A senior debt downgrade would lead to the need to put [...]
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Finance & Markets
Nivana For Nibbling
There’s a rumor going around that Wall Street’s troubles, which have become every investor’s troubles, reach back only a year or so. In fact, the genesis of the mess goes back much further. It’s true, of course, that most investors have only been paying attention for the last year or so, thus the rumor. The [...]
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Finance & Markets
Opening Comments September 16 2008
Prices of Treasury coupon securities, on balance, registered small losses in overnight trading but in the context of the historic price advances yesterday the losses are minimal and even meaningless. The yield on the 2 year note has increased by 2 basis points to 1.72 percent. The yield on the 5 year note is unchanged [...]
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Finance & Markets
Closing Comments September 15 2008
Prices of Treasury coupon securities exploded higher today as fears of financial Armageddon gripped investors around the globe. The bankruptcy of Lehman Brothers and the melting of equity value at AIG prompted a flight to the safety of government securities.The yield on the 2 year note has tumbled an incredible 45 basis points and rests [...]
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Asia
The Terrible Lessons of Bear Stearns
As Lehman Brothers (LEH) became a single digit midget, on its way to zero, as Washington Mutual (WM) works its way towards a dollar, as Wachovia (WB) drops 80% over the past year, and as Fannie Mae (FNM) and Freddie Mac (FRE) — returning as divisions of the United States of America, priced now in [...]
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Finance & Markets
Opening Comment
There is a great song by Bob Dylan entitled “Desolation Row”. It contains a line which is quite apropos this morning. Dylan, in the song says, “after the ambulances go,the only sound left is Cinderella sweeping up on Desolation Row”. Wall Street is Desolation Row this morning. The ambulances (Fed and Treasury) have left the [...]
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Finance & Markets
JPMorgan on the Federal Reserve Announcement on Sunday Evening
Here is the JPMorgan summation of the meaning of the Fed announcement on Monday evening: In an effort to support financial markets, the Federal Reserve this evening announced several changes to its liquidity facilities and regulatory policies. Although it would appear as of writing that the Fed has resisted calls to directly support the purchase [...]
