Evans-Pritchard, again:
… UBS is also gearing for a big rebound, convinced that the Fed’s move to shoulder $30bn of Bear Stearns liabilities has changed the game.
In its latest report -”Ready for a Rally” - it said financial shares rose 448pc in the 12 months after the Swedish rescue in 1992, 88pc after Japan’s Revitalisation Law [...]
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Not sure where they got the ‘reluctant’ from …
“Comrade Ben is determined that there will be no financial meltdown and no depression while he is in command,” economist Ed Yardeni wrote to clients. “Given the initial reaction [on Wall Street], I suppose this means we are all financial socialists now.”
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When a country’s government starts to blame “unscrupulous dealers” for economic collapse, reach for your wallet.
Iceland Bank Default Swaps Rise Amid `Unscrupulous’ Speculating
By Abigail Moses
March 31 (Bloomberg) — The cost to protect the bonds of Iceland’s three biggest lenders from default rose after central bank Governor David Oddsson said “unscrupulous dealers” are trying to [...]
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Ambrose Evans-Pritchard:
The Fed has been criticised for its rescue of Bear Stearns, which critics say has degenerated into a taxpayer gift to rich bankers.
A senior official at one of the Scandinavian central banks told The Daily Telegraph that Fed strategists had stepped up contacts to learn how Norway, Sweden and Finland managed their traumatic crisis [...]
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Iran’s state of play is as follows.
Ahmadinejad wants Barack Obama, not John McCain, as the next US president.
Ahmadinejad is facing severe inflation at home, brought about by an oil windfall combined with US financial sanctions. This constitutes a political threat to his survival.
The Ahmadinejad faction of the Iranian military-industrial apparatus has the most to lose [...]
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The SEC:
… Fair value assumes the exchange of assets or liabilities in orderly transactions. Under SFAS 157, it is appropriate for you to consider actual market prices, or observable inputs, even when the market is less liquid than historical market volumes, unless those prices are the result of a forced liquidation or distress sale. …
Considering [...]
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Things started getting very difficult with the internet about six months ago as the great firewall got tighter, but in the past few weeks internet access has been far more frustrating than it has ever been during my over six years living in Beijing. It takes me hours (literally) to post anything on my blog. [...]
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Rumors, rumors …
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Right on cue …. via the Financial Times:
US aids Iraq security forces with air strikes
By By Steve Negus, Iraq correspondent, and Demetri Sevastopulo in Washington
Published: March 28 2008 18:20 | Last updated: March 28 2008 18:20
President George W. Bush on Friday called the Iraqi government offensive in Basra a “defining moment” as violence continued to [...]
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China’s chronic undervaluation of its currency implies that the country should have a rate of inflation approximately proportional to its persistent current account surplus. China’s current account surplus has been exploding recently, which means that China is in the throes of an inflationary monetary trap. It also means that you can look at China’s forex [...]
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Posted in doomsterism, politics on March 28, 2008 | 8 Comments »
I saw a lot of my extended family over the Easter holiday. We are all rabidly conservative, so naturally we discussed the 2008 elections in great detail.
Everyone else, being conservatives of the [obliviously] optimistic sort, was jubilant about the Wright controversy, was certain that it had badly damaged Obama’s prospects both for the Democratic nomination [...]
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Chase mortgage memo pushes ‘Cheats & Tricks’
The bank says it never backed the strategies, which detail how to get an iffy loan approved
Thursday, March 27, 2008
JEFF MANNING
The Oregonian Staff
A newly surfaced memo from banking giant JPMorgan Chase provides a rare glimpse into the mentality that fueled the mortgage crisis.
The memo’s title says it [...]
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King to consider special help for UK banks
By Chris Giles, Economics Editor
Published: March 26 2008 12:08 | Last updated: March 26 2008 12:23
Mervyn King indicated on Wednesday that the Bank of England was poised to take a revolutionary step and buy or swap illiquid assets on banks’ books for cash or liquid assets as way [...]
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Posted in dollar, inflation on March 26, 2008 | No Comments »
Nice:
Gold has potential to double: UBS
[...]
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Posted in politics, volatility on March 26, 2008 | No Comments »
Economies have lots of forms of leverage besides the borrowing of money by hedge funds through prime brokerages.
For example, a national deficit is also a form of leverage. Thus, lower-than-long run average taxation is a form of leverage. Inflation, being a tax, is a form of leverage.
Another form of gearing would be weakness in workers’ [...]
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The FT indicates that little Iceland, which in 2006 had a current account deficit of 26 percent of GDP (”only” 16 percent in 2007) has gotten mauled by the credit contraction. Considering that Iceland’s economic profile — low taxes, low regulation, small finance-centric economy, massive current-account deficit — is so similar to Eastern Europe (particularly [...]
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On March 17, Lehman dropped more than 40 percent in one day, at one point.
How’d they survive?
Portfolio, not normally my favorite magazine, has an interesting article on the subject:
Bear Stearns collapsed for two reasons. It had a short-term funding crisis where lenders pulled their loans and customers pulled their cash. But it also had a [...]
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Posted in geopolitics, politics, war on March 25, 2008 | No Comments »
Iraq: Medhi Army Starts ‘Civil Disobedience’
March 24, 2008 1642 GMT
Members of Iraqi Shiite leader Muqtada al-Sadr’s Mehdi Army on March 24 moved into Baghdad’s southern al-Ilaam, Shurta, Bayaa and Amil districts and western Washas district, ordering shop owners to close, Reuters reported, citing witnesses. Militia members used burning tires to close down roads in one [...]
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Long-run inverse correlation between the USD (two methods of calculating its value used here), and CPI:
Hey, it looks like an inverse correlation to me. ;-)
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Bloomberg:
Federal Home Loan Banks May Buy $150 Billion of Bonds (Update1)
By Dawn Kopecki and Jody Shenn
March 24 (Bloomberg) — Federal Home Loan Banks were freed to increase their purchase of mortgage-backed bonds by about $150 billion as part of a government effort to pump money back into a market that slumped as the housing [...]
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