Quote of the Day: Sarkozy’s Warning

Nicholas Sarkozy has some sharp words about the crisis

(QOTD) Ben Bernanke: It is not the responsibility of the Federal Reserve to protect lenders

“It is not the responsibility of the Federal Reserve – nor would it be appropriate —  to protect lenders and investors from the consequences of their financial decisions." -Ben Bernanke, 31 Oct 2007 via David Rosenberg’s daily research today I will see if I can find the original source and context. Update:  A-ha, I have

Quote of the day: “Jamie is always hanging around the hoop”

In a 9-page Vanity Fair article “Wall Street’s Near-Death Experience,”giving us a sneak peek into the lives of bankers during the global meltdown last Autumn a hilarious quote of great significance was buried. At issue was the near-death experience that Lehman’s demise caused for Morgan Stanley and Goldman Sachs. After receiving a mysterious call from

Did Tim Geithner blow it?

Politico asked a bunch of pundits from across the political spectrum to size up U.S. Treasury Secretary Tim Geithner’s performance in explaining his plan for rescuing the U.S. banking system. They were asked, “Did Tim Geithner blow it? What should he do now?” One pundit, Jeffrey C. Stewart, had a memorable response (Hat tip Dave): Yes,

Quote of the day: John Kenneth Galbraith – The Bezzle

This comes from Chapter VIII of Galbraith’s classic volume, “The Great Crash 1929.” Given the recent announcement of fraud at Satyam in India and the monstrous Madoff scandal, it is a quote and concept to remember

Austrian banks have emerging-market financial exposure that is 70% of GDP

You probably know that I am gearing up for some serious writedowns in Eastern Europe because I see these countries as having external imbalances which will have to be corrected as the economy softens. In previous posts, I had mentioned that there was considerable exposure to Eastern Europe in Austria, Sweden, Denmark ad Germany in particular. Austria is the worst of the lot. Today, I happened upon an article and a quote which puts the Austrian exposure into context

Stephen Roach: “Rates can go to unusually low levels for much longer than people think”

With the global economy n recession and inflation headed toward zero, government bonds are looking like the best place to put ones money. As a result, we have seen yields on these assets drop to incredibly low levels in the world’s largest developed economies as their prices have increased.

Treasury securities. They may show all the hallmarks of a bubble. But does that mean that the bubble will end now? Here’s what Stephen Roach says

Quote of the day: “The cash has to go somewhere”

With Treasury securities at all time lows you get the feeling fundamentals is not the only thing driving the rally in U.S. government bonds. After all, the Fed has been lowering interest rates and showering the financial sector with money. So, I wanted to highlight a comment that I find fitting

Jim Chanos: “It’s a bear market rally”

Jim Chanos, the famous hedge fund guru and short-seller does not think stocks are going to be up for long.  He sees the recent rally on the back of promised government stimulus as temporary and expects markets to resume their downward course.  In fact, he is now shorting cement as a play on continued weakness

Quote of the day: William White and inflation

Caroline Baum had a good column today at Bloomberg in which she suggests central banks consider asset prices in monetary policy going forward. In the piece she quoted William White, a former economist from the Bank for International Settlements. He said: “The most calamitous downturns were not preceded by any degree of inflation. There was

Quote of the day: Willem Buiter – Tits on a bull

Willem Buiter has a very useful and provocative blog at the Financial Times website called Mavercon.  The Dutch-born former Bank of England MPC member is not afraid to take policy makers to task or call a spade a spade. In his latest post on why banks are refusing to lend to creditworthy customers, he has

Quote of the day: William Jennings Bryan

This is a quote from the populist American politician William Jennings Bryan, a Democrat famous at the beginning of the last century. “There are two ideas of government. There are those who believe that if you just legislate to make the well-to-do prosperous, that their prosperity will leak through on those below. The Democratic idea