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Links: 2009-03-27

Commerzbank reveals toxic assets – BBC News Obviously, there are more writedowns to come. What does this say about what’s on Deutsche’s books? or UBS? MGM Mirage’s City Center Hires Bankruptcy Counsel – Deal Book Fear and Greed – Mark Thoma this is a hilarious post and a must-read Europe fetches the monetary helicopters, at long last – Telegraph Ambrose […]

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1995

The political realities of solving a financial crisis have often meant circumventing legislative approval to meet the exigencies of a particular situation.  This was certainly the case in 1995 during the so-called Tequila Crisis in Mexico.  And I believe it is the case again today in 2009.  Before I go into how this applies to what is presently happening in the Obama Administration, I thought an example from 1995 would be illustrative.

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Video: Geithner calls for single agency to oversee systemic risks

Story from Investor’s Business Daily: Treasury Secretary Timothy Geithner called for “new rules of the game” on Thursday, including a systemic-risk regulator, stronger capital cushions for banks, and more disclosure from hedge funds. The broad-brush vision also would have derivatives such as credit default swaps trade via a central clearinghouse. Higher standards for money-market mutual funds — a weakness exposed […]

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U.S. jobless claims of 652,000 show continued weakness

U.S. jobless claims of 652,000 show continued weakness

Jobless claims for the week ending March 21st are in. There were 652,000 initial claims last week, bringing the unemployment roles to a record 5.56 million. Both figures are seasonally-adjusted and reflect minor changes in seasonal adjustment (SA) factors going back a few years. What do the figures tell us? Well, the year-on-year comparisons with and without seasonal factors are […]

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Are Citi and BofA gaming the Geithner Plan already?

Here we are just days out from the announcement by Treasury Secretary Tim Geithner that the Obama Administration will be buying up so-called toxic assets as originally planned by Henry Paulson during the Bush Administration. The initial reaction has been one of euphoria as most asset markets responded positively to the news.

Now that the dust has settled somewhat, another reaction is taking place behind the scenes and it looks an awful lot like banks — specifically Citigroup and Bank of America — are gaming the system. Note my highlighting.

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Auto Loan ABS market best of the bunch

This comes via Angus Robertson of Research Recap: The performance of auto loan securities has been mixed, but Standard & Poor’s Credit Research points out that overall ratings on the ABS have been remarkably stable in spite of the recession. In a new report on the sector, S & P says that delinquencies and write-downs among certain auto loan ABS, […]

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What are the consequences of the huge U.S. deficit?

This post is a contribution from Rob Parteneau of MacroStrategy Edge about fiscal expansion, printing money, avoiding debt deflation, and U.S. treasuries. He has some great insights on deflationary spirals, the paradox of thrift and the desire of foreign investors to dump dollars. He also argues that the “Blame Asia Meme” is misguided as the ultimate source of credit growth in the United States is domestic. The crux of his statements is that the only way to avoid a deflationary spiral when household savings is increasing is through fiscal expansion, which is one reason I support fiscal stimulus. But, there are consequences.

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Links: 2009-03-26

Here are the main links. A ton more can be found in the news feed (also available via RSS). Enjoy. Has the Gaming of the Public-Private Partnership Begun? – Yves Smith Daddy, tell me, what exactly is a derivative? – James Carville, FT.com Was aus dem Geschäftsbericht der Deutschen Bank über Kreditderivate zu erfahren ist – Blick Log The Same […]

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Video: Barack Obama finally gets angry

OK, well this is just an actor in a comedy skit from Saturday Night Live getting angry.  But, it is pretty funny.

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Fix the real economy first: lessons from James Montier

James Montier has a very good piece out via John Mauldin ([email protected]) on the need for real economy stimulus over financial sector stimulus. The quote I find most memorable goes to the heart of our debate about the financial system: Investors seem to be rather excited about banks posting profits at the moment. Frankly, if a bank didn’t post a […]

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Moody’s anticipates huge increase in leveraged loan defaults

This comes via Angus Robertson at Research Recap. Just as the RMBS post yesterday confirmed, moe writedowns are coming in other credit classes: In a trend likely to accelerate in 2009, the default rate on bank loans to speculative-grade corporations rose sharply in 2008 and recovery rates on leveraged loans dropped over the same period, according to a new study […]

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Links: 2009-03-25

Here are the main links. A ton more can be found in the news feed (also available via RSS). Enjoy. Dear A.I.G., I Quit – Paul Kedrosky The devalued Prime Minister of a devalued Government – Alice Cook This video is good. U.S. wrong to blame China for trade imbalance: Stephen Roach – Xinhua Buffett’s Goldman Sachs Warrants Regain Value […]

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