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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 […]

Fix the real economy first: lessons from James Montier

James Montier has a very good piece out via John Mauldin (JohnMauldin@InvestorsInsight.com) 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 […]

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 […]

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 […]

Krugman: Geithner Plan “won’t work”

I have the same misgivings about the Public Private Partnership Investment Program that Paul Krugman does. However, I still think it could work in conjunction with all of the other stimulus being applied (at least in inducing a cyclical rebound, which seems to be the goal). Krugman does not. Watch the video to see his reasoning.

Is the economic contraction peaking?

I believe we may be seeing the bottom here. Marc Chandler of Brown Brothers Harriman does as well. Here is what he has to say: Our baseline expectation is that the pace of contraction of the US economy probably peaked in the horrific fourth quarter of last year, which still appears subject to downward revisions. We expect a deep contraction […]

2003

Yesterday, I posted an item on Naked Capitalism about the bankruptcy of Yamaichi Securities in 1996 as testament to lingering weakness in a country’s financial sector if sick financial institutions are not dealt with swiftly. In essence, the entire Japanese banking sector remained weak for years despite multiple cyclical upturns after the Bubble Economy burst. So, let’s fast forward to […]

Goldman: Quote of the day – “Leopards change spots”

If you haven’t noticed, I think the Geithner Plan, while far from perfect, has a reasonable chance of success. Marshall, too, believes the plan could work as he has suggested in his last post. The optics of it are another matter. “Goldman has already said they will repay their TARP money within a month (obviously all of this negative press […]

Since when has the Treasury ever pre-announced the exact maturities that they will buy and when?

Since when has the Treasury ever pre-announced the exact maturities that they will buy and when?

It is almost like they are trying to manipulate the market prices on a day to day basis. At best the total $300 billion is probably less than 1/5th of total treasury issuance (not counting TARP, etc, for fiscal 2010). By the way, I calculated that Treasury interest cost has decreased and is running around $250 Billion, down significantly from […]