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Citigroup grabs Wachovia on the cheap

Wachovia Corporation has agreed to be bought out by Citigroup in a deal supported by the U.S. government. Exact terms of the deal are still forthcoming, but this could be seen as a best case scenario for a bank which was increasingly under stress due to the global credit crisis. In 2006 Wachovia’s shares changed hands for nearly $60. On […]

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Stephen Roach has a bone to pick with Congress

Echoing my sentiments in the last post, “The U.S. banking crisis: where are we?,” Stephen Roach, the head of Morgan Stanley Asia has made a blistering attack on the U.S. Congress. He has labeled Congress’s response to crisis over-regulation and sees many more losses to come from real economy effects of the global credit crisis. Roach went on to say […]

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The U.S. banking crisis: where are we?

The U.S. banking crisis: where are we?

This morning Chris Whalen made some comments on CNBC that hit the nail on the head regarding the U.S. banking crisis: there is a huge wave of old-fashioned loan losses coming down the pike. The writedowns we have seen to date are largely confined to tradeable securities that must be marked to market. There are much bigger unrealized losses sitting […]

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European banking collapse including nationalisation of three banks

UPDATE: 9:30 AM ET: This post has been updated to reflect the events surrounding Fortis. On Friday, I warned that European government officials like Peer Steinbrück of Germany should refrain from chastising the U.S. and the U.K. over problems in banking. After all, Europe is next. At the weekend, the fireworks in Europe began in earnest. Yesterday, top German finance […]

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U.S. Bailout: the mother of all carry trades?

There are some great ideas out there about what the U.S. bailout is all about. Earlier, I mentioned my belief that it had everything to do with marking to market. Just a while ago, I caught a post that has a very intriguing angle on the plan: it’s the mother of all carry trades (hat tip Brad DeLong). For those […]

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Bradford & Bingley may suffer Northern Rock’s fate

Earlier today I highlighted a number of banks that were under severe selling pressure in their respective home markets. This list included Fortis, Macquarie, NCC, Wachovia and CIT. The UK’s Bradford & Bingley is certainly on that list as well. In fact, the British daily “The Telegraph” is openly speculating whether B&B will be nationalized. Given the drop in confidence […]

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Fortis to speed asset sales

The Dutch-Belgian bank Fortis has come under pressure in the aftermath of the WaMu bankruptcy. With the credit markets seized up globally, weaker banks are being attacked regardless of nationality – Wachovia, NCC and CIT Group in the US, Bradford & Bingley in the UK, Macquarie in Australia, and Fortis in Benelux. These are truly trying times for financial institutions. […]

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How the Bailout deal unraveled yesterday

The NY Times has a story on how yesterday’s bailout deal failed. This is an insider’s tale with blow by blow detail. It is a fascinating view into how the U.S. conducts government policy. Below is a snippet from the post and a link to the full story. One interesting facet in the matter was the contention by Democrats that […]

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$700 Billion? Try $5 Trilion – So says Marc Faber

Faber thinks that the U.S. needs a lot more money than the Paulson Economic Patriot Act suggests. I agree 100%. His figure is $5 trillion! That’s a lot of dosh. Here is how he is quoted on Bloomberg: “The $700 billion is really nothing,” Faber said in a television interview. “The treasury is just giving out this figure when the […]

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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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