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New Zealand in recession: who’s next in Asia?

Last night, on Bloomberg TV I heard that New Zealand had become the first Asian economy to officially slip into recession. Today, I have seen the stats confirming this. Jim O’Neill, Chief Economist at Goldman Sachs, says the chance of global recession is only 10%. I don’t see how he can believe this with economies weakening globally. New Zealand joins […]

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Quote of the day – Richard Fisher, head of the Dallas Fed

Richard Fisher of the Dallas Fed shows that some of the Fed Presidents get it. He is now on record for saying that interest rate cuts won’t solve America’s credit crisis problems. In fact, interest rate cuts will make them much worse. If only Greenspan had felt this way, we wouldn’t be in this mess. “Since the beginning of the […]

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Lehman’s gone, WaMu’s toast, who’s next?

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 at WaMu. So, it is […]

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News Round-up: 26 Sep 2008

I am going to do this round-up of news early because the news cycle is very fast. Top billing today is the WaMu bankruptcy and asset seizure by the FDIC and immediate asset purchase by JP Morgan Chase. Please see my synopsis here. There is the Economic Patriot Act proposed by Hank Paulson and the long and short on the […]

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JP Morgan Chase buys WaMu out

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 a bankruptcy as much […]

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Quote of the day: TARP not based on any facts

I caught this quote via Political Wire. It reminds me of Paul Wolfowiz’s quote for why the Bush Administration used WMDs as the rationale for war in Iraq. Some of the most basic details, including the $700 billion figure Treasury would use to buy up bad debt, are fuzzy. “It’s not based on any particular data point,” a Treasury spokeswoman […]

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How to tackle systemic malaise

Marshall Auerback here. Ed has had a few posts on the Swedish bailout plan with which I agree. I think the main political argument (made by Bo Lundgren in yesterday’s NY Times) is that you have ZERO political legitimacy unless everybody is perceived to be making sacrifices and getting some long term benefit via equity. Therefore, I have my own […]

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News round-up: 25 Sep 2008

The big news is about Paulson’s Economic Patriot Act, which looks set to pass Congress. The ultimate question is in what guise the plan passes. Will it give the U.S. Treasury carte blanche or will Congress have oversight? What provisions for homeowners will be connected? Will pay restraint be associated with the bailout? These are all important questions. In addition, […]

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Gateway Bank sold, hurt by Frannie preferreds

When Fannie Mae and Freddie Mac went bust, a number of major players were stung as the value of Fannie and Freddie preferred shares plummeted. Principal amongst these players was Gateway Bank, which had a huge percentage of bank capital tied up in the preferreds. Now Gateway has arranged a takeover by a rival smaller bank, Hampton Roads Bankshares. Given […]

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Jim Chanos: short sellers are heroes

Jim Chanos: short sellers are heroes

I just watched a great clip of an interview Jim Chanos, the famous head of hedge fund Kynikos Associates, did with the FT’s Gillian Tett (Hat tip FT Alphaville). Chanos does a very good job of arguing hat short sellers are being unfairly victimized by government. Basically, he and other hedge fund managers like John Paulson have been warning al […]

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Paulson’s Economic Patriot Act is about marking to market

The interesting thing about the Paulson proposal is that it gives the U.S. Treasury carte blanche to buy any of these toxic assets at any price it chooses. This is relevant because of mark to market rules in FAS 157. I have posted a few times on the mark to market rules of FAS 157 that have caused a ton […]

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Durable goods orders down 4.5%, double expectations

Economists had expected the durable goods report for August 2008 to be weak, but the report showing durable goods orders down 4.5% was much weaker than expected. While I do believe that the United States is in recession and the durable goods report is considered a key indicator of future manufacturing activity, I do not put that much weight in […]

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