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The title of this post is somewhat misleading – designed to be provocative to get you to read what I have to say. Indeed, I am going to defend Goldman Sach’s right to pay what it likes to its employees. But, I am also going to defend your right to be outraged and to look [...]

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The Irish government today announced that, if necessary, it is prepared to take majority shareholding in ailing Irish banks. However, it has ruled out full-scale nationalisation. But, what is a majority share by government except nationalisation?
This is a duplicitous parsing of words that hides a more sinister interpretation of what is happening in Ireland.
Here’s what [...]

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Germany never participated in the upswing of the housing bubble. This fact has led German politicians of all stripes to mistakenly believe their banking system was somehow immune to the problems infecting bubble markets like the US or Spain.  Unfortunately, it has not worked out that way because the globalization of finance has shifted risk [...]

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This comes via the Telegraph:
UK Financial Investments (UKFI) said in its annual report that its loss on the two stakes – 70pc of RBS and 43pc of Lloyds Banking Group – had reached £10.9bn at the end of June.
The losses, which are not yet realised, have been wracked up since Gordon Brown was forced to [...]

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Let’s say you’re an American named Maria living in Southern California.  The year is 2006.  You make $45,000 and your husband David makes another $40,000.  You have two children aged six and four and your two-bedroom apartment is getting too small.  So you decide to consider buying a house.  Eventually, you and your husband find [...]

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Apparently the answer to this question is yes.  CNBC is reporting that home ‘owners’ who refinance their mortgages through loans backed by Fannie and Freddie will be able to borrow up to 125% of their homes’ value (hat tip Marshall Auerback).  That’s not a typo: we’re talking no-money down and 25% cash back.  Sign me [...]

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Kyle, a long-time reader, recently asked why I think mark-to-market accounting actually matters.  After alI, savvy investors know that accounting does not necessarily change cash flows.  I think his question has a lot to do with not just accounting, but also with the stress tests.
Kyle writes:
My point is that it has really NOT changed, and [...]

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Bloomberg has the goods on Fannie and they’re not good. Fannie’s regulator wants $19 billion from the U.S. government because the firm has negative capital. Fannie Mae had $23.2 billion in losses last quarter alone. And it says losses in 2009 will be worse than 2008.  Nice.
Here’s the money quote: “Fannie says it does [...]

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The first bank nationalization in German history is about to take place. At issue is Hypo Real Estate (HRE), a troubled Munich-based company that lends to commercial property developers and to build offices, hotels, roads, airports, you name it.
This issue has been building for nearly 7 months. Back in late September, just after Lehman [...]

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This weekend has seen two major European financial institutions forced into the hands of government and a third on the verge of major new asset writedowns and job cuts. The events highlight the fragility of European banking and the need for concrete solutions at the upcoming G-20 summit in London.
First, in the UK, you [...]