Archive for May, 2010
Posted in Federal Reserve Bank of NY: Ratings Agencies Rubber Stamped Mortgage Backed Securities
May 31st, 2010
“The Federal Reserve Bank of New York is out with a report which shows the credit ratings agencies did in fact rubber stamp “shitty” mortgage backed securities (MBS). This report is going to hurt firms like Moody’s (NYSE: MCO) which are already under investigation by the Securities and Exchange Commission. S&P (NYSE: MHP) and Fitch will be shaking too.”
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Silver Price Manipulations Appear to Have Failed this time
May 31st, 2010
“As federal government documents have been declassified and released to the public, it has been confirmed that the US government has intervened to manipulate gold prices starting as early as the end of World War I. In a letter to the Gold Anti-Trust Action Committee, Inc. (GATA) dated September 17, 2009, Federal Reserve Bank governor Kevin M. Warsh confirmed that the Fed has gold swap arrangements in place with other central banks, one of the means by which gold prices can be manipulated.”
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Top German Bankers See Plot To Funnel Bailout Money To French Banks
May 31st, 2010
“From the beginning, it’s been clear that the bailout of Greece would be a bailout in large part of French banks, owing in part to the fact that French banks had the biggest exposure. Yet apparently some top German bankers are alarmed at how things are playing out. A report in Der Spiegel (in German) suggests that top Bundesbank bankers see a “plot” underway at the ECB.”
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Skewed Wealth Distribution and the Roots of the Economic Crisis
May 31st, 2010
“What I do know is that while “social psychology” may have had some small role as a causal factor in the Crash of ’08, it was the actual structure of the American and world economies which brought on the crisis. And if in fact we enter a second round of this Crash, it will not stem from what Dr. Shiller calls a “weakness and vulnerability of confidence,” but will result from the same structural elements of our economy as those that brought on the “first dip.””
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The U.S. Government Bond Bubble
May 31st, 2010
“What follows will read like an indictment on our entire economic system. But underlying my (relatively mild) harangue is an observation that people are ignoring the most obvious bubble out there; that is, the bubble in U.S. government bonds. The following is my attempt to figure out why.”
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So What Hit Us In ‘08 Anyway? A Battle Over Narrative
May 31st, 2010
“AEI’s Peter Wallison (a hard-core free markets ideologue) has a fascinating discussion (hat tip Chris Whalen & IRA) on how the regulated-markets people seem to have achieved the inside track on explaining what really happened in the course of the Panic of 2008. Wallison proposes how the free enterprise party might be able to win back the initiative before it’s too late.”
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China Real Estate Bubble Bursts in Bond Market: Credit Markets
May 31st, 2010
“Dollar bonds sold by China real estate companies this year are the worst performers among Asian non-financial corporate debt denominated in the U.S. currency amid concern the nation’s property market is overheating.”
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Economist Declares “Mission Accomplished” on Repairing Bank Balance Sheets
May 31st, 2010
Reader Richard Smith provided a sighting of bank boosterism, courtesy The Economist:
The happy secret of Western banking is that the system in aggregate now has lots of capital (see chart) relative to the net losses experienced over the crisis. The kind of erosion of capital forecast by the Federal Reserve’s stress tests last year, for example, has simply not materialised. That means the Basel club can legitimately argue that banks in aggregate do not need to raise much new capital.
Books That Matter: Crisis Economics, by Nouriel Roubini & Stephen Mihm
May 31st, 2010
“I just finished reading: Crisis Economics – A Crash Course in the Future of Finance, by Nouriel Roubini & Stephen Mihm. It was really good… great even.”
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