.@adamkwolfe: One reason China will not avoid a nasty growth correction in the coming years: lack of SOE reform http://t.co/kD4k8pcYZv
15 minutes ago
Global Macro Channel: Latest Posts
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Finance & Markets
More on the Charge That JP Morgan Withheld $17 Billion From Lehman, Triggering Collapse
Reader Saboor passed along the day’s updates on the case filed by Lehman creditors last week, alleging that JP Morgan, Lehman’s clearing bank, refused to give Lehman access to $17 billion of excess funds held at the bank, precipitating the firm’s failure. I did not see an link to the case yet in a quick [...]
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Finance & Markets
The last opportunity for effective action before disaster strikes
Summary: The Paulson Plan is already irrelevant. New and larger measures are needed immediately. This post considers their size and scope. We are only weeks away from disaster. Fortunately, I am certain that Secretary Paulson and Chairman Bernanke know this. Bernanke, as an expert on the Great Depression, certainly understands the need for fast and effective [...]
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Finance & Markets
Evaluating Toxic Assets – And Where Do We Go Next
Remember that the original Paulson bailout plan and the major function of the revised TARP rescue legislation is an attempt to prevent massive insolvencies in financial institutions that have, on their balance sheets, “securitized” assets (e.g., Mortgage Backed securities [MBS, CDOs, credit default swaps ,etc] that had become virtually illiquid as the market for these [...]
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Finance & Markets
Fed Watch: Rate Cuts Increasingly Likely
Tim Duy says “the Federal Reserve is inching closer to lower interest rates”: Rate Cuts Increasingly Likely, by Tim Duy: This week’s data flow only confirms what was apparent last week – the US economy deteriorated as we headed into the third quarter. By now, there should be no doubt that the US consumer is [...]
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Emerging Markets
Bailout Redux: The Real Choice Ahead
If the choice is between a lousy bailout bill and economic Armageddon, I’d vote for the lousy bailout bill. But make no mistake: This is a lousy bill. It doesn’t do the most important thing — help distressed homeowners avoid foreclosure (that role is given to the Treasury Department, which is the equivalent of putting [...]
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Emerging Markets
Super Liens, FHLB Advances and the Road to Forbearance
“Then faced with the worst financial crisis in a century, U.S. policymakers of the 1930s deliberately enacted a set of reforms that included central bank restructuring, bank regulatory reforms, federal deposit insurance, and a separate, politically accountable, publicly funded rescue mechanism, the RFC. Those policymakers paid careful attention to statutory and institutional structures that separated [...]
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Finance & Markets
Should ‘Mark to Market’ Meet Its Maker?
Journalists probably have a secret rule of thumb that says you lose half your readers every time the phrase ‘accounting rule’ appears in an article. For the half of you who are still with me, let me try to inoculate you against this natural human inclination by pointing out that this week may be the [...]
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Global Macro
Misunderstanding Credit and Housing Crises: Blaming the CRA, GSEs
“It’s telling that, amid all the recent recriminations, even lenders have not fingered CRA. That’s because CRA didn’t bring about the reckless lending at the heart of the crisis. Just as sub-prime lending was exploding, CRA was losing force and relevance. And the worst offenders, the independent mortgage companies, were never subject to CRA — [...]
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Finance & Markets
America is changing. Read some chillling words from a liberal economist
The crash of the post-WWII debt supercycle will ripple out though our society in ways we cannot now imagine. There are a few who can grasp the trend of events and see what lies ahead. Like this article by Brad Delong, economics professor at Berkeley: “Today in Financial History“, posted at his blog Grasping Reality with [...]
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Don't Shoot the Messenger
Russia’s Crisis Spreads Right Across The Domestic Credit Market
Well the action in Russia this week has moved on slightly, and the damage has started to spread from pressure on the domestic stock market (accompanied by capital flight) to the real economy – via a very rapid tightening in credit conditions for Russian domestic users. We are also seeing a rapid slowdown in Russian [...]
