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For a few months now, I have been wondering where all the hedge fund fallout from global market turmoil was hiding. Now it seems that the turmoil in the hedge fund world is becoming more apparent — hedge funds are imploding left and right according to the FT.
This turn of events will mean one [...]

I have said before that a systemic response is necessary to deal with the present banking crisis in the United States. This crisis has nothing to do with subprime assets and little to do with things like predatory lending. Those are issues that populists will use to prosecute the scapegoats we are likely to see down the line. The crisis has everything to do with low interest rates, zero regulation and a credit bubble of monumental proportions.

The banking system of the United States is effectively insolvent. Buying up $700 billion in assets is not going to solve this basic fact. A systemic response is needed. If we do not address these issues, we may see significant dead-weight loss as many institutions fail.

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Earlier today I highlighted a number of banks that were under severe selling pressure in their respective home markets. This list included Fortis, Macquarie, NCC, Wachovia and CIT. The UK’s Bradford & Bingley is certainly on that list as well.
In fact, the British daily “The Telegraph” is openly speculating whether B&B will be [...]

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Judging from today’s open on Wall Street, it looks like that’s the question people are asking. Wachovia and NCC are the two companies under the heaviest selling pressure, both down about 20% already at 9:45.
Remember that National City is under OCC scrutiny. That is the sort of problem that led to massive deposit withdrawals [...]

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JP Morgan Chase has taken over the deposit taking subsidiary of Washington Mutual. The transaction is effective immediately, meaning it has closed. This is the biggest deal in FDIC activity yet.
Note: I originally heard this story just before 9PM ET and Yves Smith at naked capitalism has her take on the news.
Obviously, this is [...]

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The U.S. and the UK are not the only countries suffering from a housing bust and a credit crisis. Ireland and Spain have had massive busts as well and it is only a matter of time before we begin to see affects on the banking sector. And there are many other countries that [...]

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Marshall Auerback here.
Equity investors, perhaps unlike credit investors, don’t get the fundamental insolvency of the financial sector, an artifact of mega-leverage.
This is a culture that responds to visual clues and marketing jingles. Substance is at best a second thought, and seriously, there is not time in these markets for second thoughts. It’s all about maximal [...]

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Today, after the markets closed, in another Friday Night Special, the FDIC announced the failure of Ameribank. This represents the 12th bank failure this year and the 14th since the credit crisis began last August.
See my list of Bankrupt global financial institutions for major bankruptcies and my Credit Crisis Timeline for all bank writedown [...]

Why did Lehman really fail? The equity window is effectively closed for most financial services companies. This fact was the true trigger for the meltdown in AIG and Lehman and the problems at WaMu, HBOS and Merrill Lynch.

Moreover, it will be the trigger for a lot of the financial services bankruptcies going forward.

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The bankruptcy of Lehman Brothers, with assets of over $600 billion is the largest in U.S. history. Wikipedia has catalogued the list of the largest U.S. bankruptcies of all time. (Hat tip: Börsennotizbuch)
Drum roll, please.
The current Bankruptcy Code was enacted in 1978 by § 101 of the Bankruptcy Reform Act of 1978[34], and generally [...]