Category Archives: Credit markets

Europe’s Black Cygnets Grow

By Delusional Economics, who is horrified at the state of economic commentary in Australia and is determined to cleanse the daily flow of vested interests propaganda to produce a balanced counterpoint. Cross posted from http://www.macrobusiness.com.au/2012/04/europes-lunatics-rise/“>MacroBusiness.

And so the black cygnets scuttle from the shadows again.

Over the weekend, Angela Merkel’s Christian Democrats suffered an 8.3% swing in North Rhine-Westphalia as the Social democrats (SDP) and the Greens garnered a majority. Although this is only a state election, called after the previous SDP led minority government was unable to get approval for its budget, North Rhine-Westphalia is the country’s most popular state and seen the bellwether for national government. Of note is the fact that the SDP-Greens coalition governed Germany under Chancellor Gerhard Schröder from 1998 to 2005. Although this is as much about state politics and personalities, especially the SDP leader Hannelore Kraft, the flow-on effects at a national level from such a large turn around are very obvious:

Michael Olenick: WhaleMu – JP Morgan’s Next Surprise?

By Michael Olenick, creator of FindtheFraud, a crowd sourced foreclosure document review system (still in alpha). You can follow him on Twitter at @michael_olenick or read his blog, Seeing Through Data

In an admittedly strange twist of timing JP Morgan, the same JP Morgan that just announced a surprise $2 billion loss caused by the “London Whale,” became the first and only of 26 banks disclosing subprime investor data to flip me the digital bird, refusing access to the public loan-level performance data for their Washington Mutual loans.

Michael Hudson: Paul Krugman’s Economic Blinders

By Michael Hudson, a research professor of Economics at University of Missouri, Kansas City and a research associate at the Levy Economics Institute of Bard College. His new book summarizing his economic theories, “The Bubble and Beyond,” will be available in a few weeks on Amazon.

Paul Krugman is widely appreciated for his New York Times columns criticizing Republican demands for fiscal austerity. He rightly argues that cutting back public spending will worsen the economic depression into which we are sinking. And despite his partisan Democratic Party politicking, he said from the outset in 2009 that President Obama’s modest counter-cyclical spending program was not sufficiently bold to spur recovery.

Occupy the SEC to Jamie Dimon: We Told You So

By Occupy the SEC

Jamie Dimon’s plan to enfeeble the Dodd-Frank reforms, specifically the Volcker rule, has blown up spectacularly.

JP Morgan Loss Bomb Confirms That It’s Time to Kill VaR

One of the amusing bits of the hastily arranged JP Morgan conference call on its $2 billion and growing “hedge” losses and related first quarter earning release was the way the heretofore loud and proud bank was revealed to have feet of clay on the risk management front.

Mirable Dictu! Moody’s to Adjust Bank Ratings Downward for Regulatory Arbitrage

It’s hard to imagine anyone will take tough-sounding stances by ratings agencies seriously, but Moody’s, in a chat with the Financial Times, says it has (finally) taken notice of how banks play games with regulatory capital requirements.

Jamie Dimon Misrepresented “London Whale” Risks, Admits to $2+ Billion Loss Plus Risk Management Black Eye

As readers likely know by now, Jamie Dimon hastily arranged an after hours conference call today, in which he admitted to $2 billion in losses in the last six weeks from a trade by the “London Whale”, Bruno Michel Iksil in the bank’s Chief Investment Office, with as much as another potential $1 billion in losses in the offing.

More on Frontline’s Astonishing Whitewash of the Crisis

As readers may know, a recent post, “Frontline’s Astonishing Whitewash of the Crisis,”discussed the first half of the Frontline series, “Money, Power & Wall Street.” Producers Mike Wiser and Martin Smith sent a letter taking issue with this review, and I made an exception to my usual practice and posted their missive.

The major dispute is over whether their series lets the financial services industry off too lightly.

Shale Gas Hype: Subprime 2.0?

If my RSS reader is any guide, most of the press about shale gas has focused on two issues. First, shale gas is in considerable supply, cheap to produce, and burns far cleaner than other fossil fuels. Second, shale gas does not look so hot environmentally, all in. Fracking can pollute ground water (and potable water is our most scarce resource) and releases enough methane to make shale gas as detrimental as coal. Still, it has been treated as the Great Hope for America’s energy woes, a way to turn the US into an exporter, and maybe it will cure cancer too.

Frontline Takes Issue With Our Critique of Its “Money, Power & Wall Street” Shows

I received this e-mail last week. I will issue my rebuttal Tuesday during the day. Check back in then!

Economists, Liquidity Mongers and the Banker Assault on Financial Reform

This has been a bad stretch for advocates of financial reform – and therefore for the economy as a whole. One after the other, new financial regulations contained in the Dodd-Frank law are being gutted or delayed by regulators and Congress, while the bankers – escorted by a phalanx of paid economists, lawyers and lobbyists – are squealing “wee, wee, wee” all the way home.

Draghi Departs the Solar System

By Delusional Economics, who is horrified at the state of economic commentary in Australia and is determined to cleanse the daily flow of vested interests propaganda to produce a balanced counterpoint. Cross posted from MacroBusiness.

Last night the ECB met in Barcelona and once again held on rates. Mario Draghi opening statement is below. As I have spoken about many times previously I considers Mario Draghi’s statement about what is happening in Europe to be a view from some other planet.

Philip Pilkington: Inflation-Targeting Experiment May Start in Japan… But at What Cost?

By Philip Pilkington, a writer and journalist based in Dublin, Ireland. You can follow him on Twitter at @pilkingtonphil

Rumors abound that a deal is fomenting in Japan that might lead to the inflation targeting proposal that so many progressives champion on their blogs being put in place.

Is Wells Fargo a Lehman in the Making?

Banking maven Chris Whalen has a must-read piece on the reckless real estate risk taking underway at Wells Fargo, the sanctimonious #4 bank.

Dan Kervick: The Astonishing Case of the Impenetrable Zero Bound

Yves here. I rather like the storytelling format of this post.

By Dan Kervick, who does research in decision theory and analytic metaphysics. Cross posted from New Economic Perspectives

In a small, peaceful town there once lived three people: Abbie, Baker and Carlie.