Rob Parenteau: Draghi’s Doom Loop(s) – More Than Just the Euthanasia of the Rentiers
Draghi’s Doom Loop(s): why the ECB’s QE, combined with negative deposit rates, could set a 1987 style crash for bonds in motion.
Read more...Draghi’s Doom Loop(s): why the ECB’s QE, combined with negative deposit rates, could set a 1987 style crash for bonds in motion.
Read more...Greece has decided to up the ante in its negotiations with the Troika. The open question is whether the latest move, the press leak via Ambrose Evans-Pritchard at the Telegraph that Greece will miss its April 9 payment to the IMF so that it can continue to make pension payments, and has started to make plans to issue the drachma, are game-changers that Greece hopes they will be.
Read more...One of the things we’ve stressed is that the Greek government’s repeated claims that it is submitting an anti-austerity reform package is untrue. The Greek government committed to achieving a fiscal surplus of 1.0 to 1.5% and has separately said it will always run a fiscal surplus. We have stressed that running a fiscal surplus is an economic dampener, and is even more damaging in a severely depressed economy like Greece.
So what has Greece done? It has submitted a reform package that it says will meet an even higher fiscal surplus target.
Read more...The Greek government continues to climb down substantively on its promises of resistance to the dictates of its creditors as time pressure intensifies.
Read more...We regularly criticize government-subsidized lending as a terrible way to achieve policy goals. This interview with Sarah Quinn focuses on how Federal credit subsidies have grown and changed over time, with a major objective being to mask the extent of the support.
Read more...By Tom Adams, securitization professional for over 20 years and partner at Paykin, Krieg & Adams, LLP. You can follow him on Twitter at @advisoryA It’s been a while since I wrote here about Ocwen Financial Corporation http://www.nakedcapitalism.com/2015/02/tom-adams-ocwens-servicing-meltdown-proves-failure-of-obamas-mortgage-settlements.html , the large non-bank mortgage servicer, but things haven’t gotten any better for the company or its […]
Read more...This post illustrates how remarkably short investors’ memories are. Or they may be betting that if they have a big enough hissy fit when monetary authorities raise rates, as they did during the taper tantrum of 2013, that central banks will lose their nerve.
Read more...Why the proposed Ukraine bond restructuring is a geopolitical matter, part of the US push against Russia via Kiev, and not mere high finance.
Read more...How the FCIC not merely ignored but actually suppressed information that revealed what and more important, who, drove the crisis.
Read more...As Greece continues to scramble to raise funds to avert default and keep paying pensioners and government officials, the end game is becoming clearer.
Read more...This post by Ed Walker provides a detailed description of how badly municipalities have been fleeced when they bought interest rate swaps from Wall Street as part of financings. It isn’t simply that these borrowers were exploited, but that the degree of pilfering was so extreme that the financiers clearly knew they were dealing with rubes and took full advantage of the opportunity.
But what is even more troubling than the fact set here is the failure of the overwhelming majority of abused borrowers to seek to recover their losses. Walker describes that multiple legal approaches lead you to the same general conclusion: the swaps provider, as opposed to the hapless city, should bear the brunt of the losses. So why haven’t cities like Chicago, that have been hit hard by swaps losses, fought back? Walker does not speculate, but in the case of Rahm Emanuel, it’s not hard to imagine that his deep ties to Big Finance are the reason.
Read more...Get a cup of coffee. This important post gives an in-depth analysis that helps explain how bad conduct was covered up or glossed over by the FCIC, and how much of the media fell in line with the official, sanitized story.
Read more...If the plan of the Troika was to starve the Tsipras government and produce either capitulation or a loss of domestic credibility, their effort appears to be on track.
Read more...As we pointed out early on in the oil price bust, following the argument of John Dizard of the Financial Times, shale gas operators, aka frackers, were often carrying so much debt that they simply could not afford to cut production. They’d keep pumping, even at a loss, to generate cash flow to keep servicing their obligations. Over-production would tail off only when the money sources dried up.
As we’ve since chronicled, even though rig counts have fallen, shale gas production has actually increases. Arthur Berman provides a detailed look at tight oil and shale gas output, and confirms that the rig count cuts for shale gas have not been deep enough.
Read more...It’s hard to fathom Greece’s approach to its dealings with its oppressors, um, creditors.
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