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Moral Hazards, Too Small to Fail, Mark-to-Market, Bernanke and Obama, P2P Lending

October 21, 2008 By Leave a Comment
p2p lending

When Lenders and Investors Objectives Aren't Aligned The Big Picture does a nice summary of how disconnects between lender and investor alignments can create moral hazard on the scale of mortgage implosion and financial market meltdown. Overstructuring risk mitigation combined with dangerously low interest rates makes credit feel like cash, debt like wealth. And, here we are... Seth Godin Reminds Us There is "Too Small to Fail" A great little post about the value of being small. It doesn't imply … [Read more...]

Weekend Notes

October 18, 2008 By Leave a Comment
baseball economy

Weekend Read File: Will economic collapse hurt contracts for baseball players? Time to Clean Up After the Party An Example of Economics at Work Bernanke is Fighting the Last War Churchill's Dictum and Henry Paulson PIMCO's Gross sees market confidence restored 'in weeks' on bank rescue (this guy is incredible-sarcasm in voice) Have we learned the right lessons from the Great Depression? Mark Cuban helping to watchdog our tax dollars Sequoia tells portfolio companies to hunker down … [Read more...]

Mortgage Rates, Gordon Brown, New Bank Capital, and Credit Crisis in 30 Slides (or Less)

October 15, 2008 By Leave a Comment
hair nails gifts mortgages

Mortgage Rate Update: Volatile, Float UK Prime Minister Gordon Brown claims to be leading the world through the global banking crisis and it looks like he may be right, as the US and Treasury Secretary continue to take queues from UK government action. The mounting question on the US financial crisis rescue execution front is: Will banks lend or hoard new capital? Crisis of confidence #2: Recession begins new market slippage. Major US banks begin to report quarterly earnings this week. … [Read more...]

Obama, All Markets Surge, Hedge Funds Retract, Recession

October 14, 2008 By Leave a Comment
finviz_thumb

Barack Obama on the Economy President hopeful Senator Barack Obama sought to capture some of the stock market rally euphoria and lock-up control of the economic issue. Presenting a much broader economic vision, Obama promised an additional $60 billion to help state and local governments, increase jobs, let individuals dip into their retirement savings tax-free, and issue a moratorium on foreclosures. Heading in to the third and final debate, it promises to be all about the "Economy, … [Read more...]

Update on Troubled Asset Relief Program Implementation

October 13, 2008 By Leave a Comment
kashkari update on tarp

Interim Assistant Secretary for Financial Stability Neel Kashkari gave his 10 day update on implementing Congress' $700 billion Treasury-led bailout. This is the visual synopsis of his remarks: (tag cloud: wordle.net, technique hat tip: Paul Kedrosky, full text: WSJ) Kashkari higlighted a strategy "with one simple goal--to restore capital flows to the consumers and businesses that form the core of our economy." Some of the highlights of implementation ("tools") include: MBS purchase … [Read more...]

Good Quick Analysis on UK Bank Bailout

October 8, 2008 By Leave a Comment

Mish's Global Economic Trend Analysis does a quick, down and dirty analysis of the UK banking bailout. Bailout plan sends European indices and US futures into a predictable downward trend. Mish predicts coordinated US Fed, Bank of England, European Central Bank rate action. … [Read more...]

Government to Buy Unsecured Corporate Debt

October 7, 2008 By Leave a Comment

The Government is now REALLY wading taxpayers into dangerous waters-considering buying (unsecured corporate debt) commercial paper. Link tour of the issue: Credit crunch continues to spread, freezing corporate credit (NYTimes) Federal Reserve and Treasury discuss buying commercial paper (Reuters) $95 billion has flowed out of the commercial paper market in the first week of October (Telegraph) Bill Gross of PIMCO never saw a bailout he didn't like (Bloomberg) … [Read more...]

Global Contagion-UK Banks Need Capital-RBS, Barclays, Lloyds

October 7, 2008 By Leave a Comment
rbs, barclays, lloyds stock prices

The bad part of globalization, Global Contagion! UK banks, RBS, Barclays, and Lloyds TBS met to discuss the potential need for 15 billion pounds each. According to BBC reports the banks are not in need of capital "on paper," but are needing to shore up investor perception of their need for capital and strengthening their balance sheet. The investors definitely took the news of the meeting and "possible" request for government bailout to their stocks: Expect another roller coaster ride today … [Read more...]