All Content

Case-Shiller Home Price index shows a 17% fall

Case-Shiller Home Price index shows a 17% fall

The S&P/Case-Shiller® Home Price Indices were released yesterday. Unfortunately, I was away all day and could not post. The indices showed a further decline in home prices in the United States through September 2008 (the data most recently available). In the year to September, prices dropped 17.4% for the Composite-10 index and 18.6% for the Composite-20 index versus 17.7% and […]

Read more ›
Jeremy Grantham: In-depth television interview with Consuelo Mack

Jeremy Grantham: In-depth television interview with Consuelo Mack

The renowned money manager Jeremy Grantham has had his first television interview ever with Consuelo Mack on Mack’s program WealthTrack. Below is the video from that interview. Mack has promised to make a longer video available to those who subscribe to her podcast. Please find the podcast audio link here and the podcast video link here.

Read more ›

News round-up: 26 Nov 2008 – Politics, Economy and Markets

Politics As the time for Barack Obama to take office moves ever closer, his policy team is coming into view. Obama has appointed a slew of economic advisors including Tim Geithner, Larry Summers and Paul Volcker. In addition, he looks to have filled out the key positions in his White House staff and to have nominated veterans to other key […]

Read more ›

The Citigroup Bailout: a blogosphere post-mortem

When a bank with $2.2 trillion in assets is saved from potential ruin, it is big news. So, as you can imagine, every one and his brother has a take on what went wrong at Citigroup and whether the solution to ‘fix’ Citi was the right one. Below are a number of the best links to commentaries around the blogosphere regarding Citi’s demise.

Read more ›

The problem with comprehensive banking crisis solutions

I have come down on the side of sweeping change when it comes to the banking system in the United States. Basically, I fear a further downward spiral due to the fear and panic that the banking crisis has unleashed. In my view, this necessitates a comprehensive solution, one which we have yet to see. However, there is one problem with comprehensive solutions I would like to highlight: asset confiscation.

Read more ›

The Citigroup Bailout

It looks like we have a solution to Citi’s crisis. The U.S. Government agreed to bailout Citigroup, backing $306 billion of debt in exchange for preferred equity and warrants plus a host of other details I will enumerate below. On the whole this looks to be a better deal for the U.S. Government and American taxpayers than the AIG deal. However, it is yet another ad-hoc band-aid when a comprehensive solution is preferable.

Read more ›

Citigroup: Panics, Banking Confidence, Bailouts and Fractional Reserves

Citigroup is in serious trouble. The storied institution with $2 trillion in assets has seen its shares collapse and its reputation is in tatters as it goes cap in hand to the U.S. government for a bailout. Indeed, a solution must be found as Citi is a monster of a bank, three times the size of Lehman Brothers, whose collapse caused untold damage two months ago. As I write this, Citigroup is meeting with U.S. Government officials to hammer out an agreement to set the firm on the right path. We can only hope these talks bear fruit.

Read more ›

Obama White House: Add Larry Summers and Robert Gibbs

Yves Smith at Naked Capitalism is reporting that Larry Summers is to be tapped to head Barack Obama’s National Economic Counsel.  Summers had been considered for the Treasury position, one that looks likely to go to Tim Geithner, the head of the New York Fed.  It is notable that Robert Rubin held Summers position in the Clinton Administration before heading […]

Read more ›

Citigroup talks with US Government as bankruptcy looms

Reuters is reporting that persons familiar with the matter have indicated that Citigroup began talks with the U.S. Government as contingency planning. With Citigroup’s share price having plunged dramatically in recent days, rumors have been circulating about the firm. Yesterday, the Board of Directors met to discuss strategic options including a sale of all or part of the firm. It is now evident that the government may need to get involved.

Read more ›

GM Board: Bankruptcy is an option we will consider

In direct conflict with the statements in Washington by its Chief Executive Rick Wagoner, the General Motors Board of Directors is willing to consider bankruptcy as one of many options. The Wall Street Journal released a story late last night attesting to this fact. Below is a snippet of that story. Members of General Motors Corp.’s board of directors are […]

Read more ›

Bankruptcies: US Bancorp takes over at Downey and PFF

Another Friday and another three FDIC Friday Night Specials. This time, the notables were Downey Savings and Loan Association and PFF Bank & Trust which were seized by the FDIC. Downey is especially notable as it has been in the news a lot recently with many speculating about the demise of the parent company Downey Financial. Earlier this evening, Community Bank of Loganville, Georgia was also declared insolvent and seized by the state regulator.

Read more ›

Geithner is the man at Treasury, Richardson and Clinton also in

So I go away for a few hours and the whole world changes? Apparently Barack Obama has made a decisive move to fill out his cabinet and we are about to witness three appointments: Tim Geithner at Treasury, Hillary Clinton at State, and Bill Richardson at Commerce. All three come steeped in experience on Capitol Hill and the U.S. Government. However, all three are fairly safe picks too. Whether this is change we can believe in is only time will tell. At a minimum, we know that Obama is going to make swift and reasoned if conventional decisions as President.

Read more ›