Hidden Benefits of a Greek Debt Default [View article]
I'm sure there are bankers supporting "reform" and additional lending to Greece but the primary culprits behind this bankrupt idea are the political leaders who supported the eurozone and the technocrats in Brussels who embrace collectivism in any and all forms. On any given day, you can see thousands of these little creatures, who populate the EU, EUC, ECB, ESCB and EuroStat, donned in trench coats scurrying about with Blackberry's while busily texting and planning the economic revival of Western Europe. For these progressives, a default within the EU would represent failure of the EU of the itself; this would create a serious fissure in the groundless arguments for collectivism and the need for thousands of apparatchiks. Who knows they might have to join the ranks of many in Greece and get a real job.
Ultimately, Who Benefits from Too-Big-To-Fail [View article]
If we put aside the arguments put forth by Charles Calomiris and concentrate upon the author's headline question, it is immediately apparent in the most narrow sense its the management and the equity stakeholders of too-big-to fail institutions that most immediately benefit the doctrine. Knowing their firm is backstopped by the US Treasury, management of TBTF institutions will be inclined to take outsized risks to generate profits that will increase their bonuses and the equity values of their firms. If the risks are kept within bounds, all is well; if the risks are too great and deals fall apart, the losses will be socialized. As Volcker and Mervyn King have noted, this mentality can not be regulated away.
Does 'Full Nationalization' of Banks Matter? [View article]
I should add that our experience with GSE's might give insight. In addition to being key players in the current financial crisis things like accounting scandals, social directives, insolvency and conservatorship come to mind.
Does 'Full Nationalization' of Banks Matter? [View article]
In a clinical sort of way, you make a number of interesting points.
But how many well run state banks are there?
With the likes of Reid, Pelosi and Frank, I can envision hearings calling for more state directed lending to keep the economy going and to achieve social justice.
Preview from Europe: Fear Trumps Hope as Dow Falls Below 8,000 [View article]
In my mind, it is clearly the global financial crisis that strikes fear and terror into this market. While banking and the real economy are intertwined, yesterdays action was driven by the former.
The comment by Roubini, State Street earnings, a report the BAC would need an additional $80 billion of capital and the international stories all contributed to the massive sell-off.
Credit will not thaw until the global credit crisis is resoved and it is my belief the host of measures already taken will prove insufficient. Sorry for being such a pessimist.
Preview from Europe: Barack Market Bounce or Bump? [View article]
Nice article.
It will very difficult for the market to rally in the face of the intertwined issues of financial market instability and economic contraction.
Thus far, TARP has been poorly handled and the second tranche will be used for banks, the bad asset bank scheme and foreclosure mitigation. If banks are half way through loss realization, $700 billion is in adequate and spreading it around will only dilute its impact.
Details of the stimulus package have been released and it does not square with campaign rhetoric and promises or economic theory. The proposal stands at $825 billion. Of this, $275 billion is in the form of tax relief and out of the remaining $550 billion in spending only $200 billion will be spent on infrastructure and schools. Again, lack of focus and dilution.
As I sign off the futures are under pressure and there is discussion of the timing and adequacy of scale of both programs.
Hidden Benefits of a Greek Debt Default [View article]
Ultimately, Who Benefits from Too-Big-To-Fail [View article]
Does 'Full Nationalization' of Banks Matter? [View article]
Does 'Full Nationalization' of Banks Matter? [View article]
But how many well run state banks are there?
With the likes of Reid, Pelosi and Frank, I can envision hearings calling for more state directed lending to keep the economy going and to achieve social justice.
Preview from Europe: Fear Trumps Hope as Dow Falls Below 8,000 [View article]
The comment by Roubini, State Street earnings, a report the BAC would need an additional $80 billion of capital and the international stories all contributed to the massive sell-off.
Credit will not thaw until the global credit crisis is resoved and it is my belief the host of measures already taken will prove insufficient. Sorry for being such a pessimist.
Preview from Europe: Barack Market Bounce or Bump? [View article]
It will very difficult for the market to rally in the face of the intertwined issues of financial market instability and economic contraction.
Thus far, TARP has been poorly handled and the second tranche will be used for banks, the bad asset bank scheme and foreclosure mitigation. If banks are half way through loss realization, $700 billion is in adequate and spreading it around will only dilute its impact.
Details of the stimulus package have been released and it does not square with campaign rhetoric and promises or economic theory. The proposal stands at $825 billion. Of this, $275 billion is in the form of tax relief and out of the remaining $550 billion in spending only $200 billion will be spent on infrastructure and schools. Again, lack of focus and dilution.
As I sign off the futures are under pressure and there is discussion of the timing and adequacy of scale of both programs.