Arriving at the rush, with extra impetus doubtless imparted by the recent and ongoing Eurobanking panic, we have the Basel III capital and liquidity reforms (there’s a one pager, a full press release and, oh, not wholly unexpectedly, a somewhat anticlimactic phase-in timetable). In fact, the liquidity reforms here are just timetable entries – the […]
Read more...Wow, the EU is increasingly taking steps to force foreign, meaning US and UK firms, to play by its rules or not have access to its investors. The first salvo occurred over private equity funds and hedge funds, where the EU will limit its investors to funds located in the EU, and is also limiting […]
Read more...This post first appeared on March 11, 2008 Oooh, the week has barely started and we’ve already had an overdose of adrenaline-generating news. Thornburg Mortgage and Carlyle Capital, both twisting in the wind, battered by margin calls, look unlikely to escape bankruptcy (Thornburg has already defaulted on financing agreements; Carlyle is seeking a standstill). Freddie […]
Read more...Andrew Ross Sorkin has a rather curious piece up today at the New York Times in that it purports to explain why the banking industry is up in arms about Obama, yet buries and/or omits some key issues. It’s pretty well known that big financial firms have been throwing their weight around, no doubt encouraged […]
Read more...It’s simply astonishing how often the myth of shareholder rule is parroted by the business press. Let’s see, average CEO pay was 49 times average worker pay in 1980. As of the most recent tabulation, 2008, it was 319 times average worker pay. And since that was the worst year of the crisis, and top […]
Read more...This post first appeared on August 27, 2007 Recently, we’ve noticed a new theme among economics writers: Extreme Measures. Commentators have looked toward the end of the road we are on and fear it leads to a precipice. Hence the calls for radical course correction. Paul Krugman and Bill Gross of Pimco, each of whom […]
Read more...One of our regular contributors chatted with a reporter at a major financial media outlet who was frustrated that management was not willing to let him dig into open mysteries from the global financial crisis. Fortunately, the Financial Times takes a broader view, and Gillian Tett today focused on a recent IMF report that describes […]
Read more...This post first appeared on August 21, 2007 A gut-wrenching two weeks in the credit markets have been capped by unprecedented moves by central bankers. The ECB’s offer of an unlimited infusion to member banks the week before last was followed last Friday’ by the Fed’s discount rate cut, which included stern warnings that those […]
Read more...By Yves Smith and Tom Adams, an attorney and former monoline executive Update and correction 4:45 PM: We owe an apology to readers and to Louise Story of the New York Times, for an apparent error in our analysis. We have been informed that, remarkably, there were two separate Pyxis vehicles which were issued in […]
Read more...Why oh why is it that the US media treats financial services compensation levels as a third rail issue? Rent extraction was the driver of the financial crisis, and the financial services sector made it clear in 2009, by paying itself record bonuses on the heels of being saved from certain death, that it had […]
Read more...Augmenting Ed’s recent links re Tom Adams, regular readers will remember Yves got a magazine cover and write-up in Calcalist. Now Tom Adams, another contributor to “Naked Capitalism”, (and ECONned helper, Magnetar sleuth, etc etc), has got a writeup by Calcalist. The main article is here, and it’s all in Hebrew, which Google Translate struggles […]
Read more...Back to this thing to try to work out what it’s driving at. Yves wrote: I have serious trouble with its bottom line: We document that the shadow banking system became severely strained during the financial crisis because, like traditional banks, shadow banks conduct credit, maturity, and liquidity transformation, but unlike traditional financial intermediaries, they […]
Read more...Tonight I am initiating summer reruns, a replay of posts I particularly liked from 2007, 2008, and early 2009 (the blog started in late December 2006). This selection represents roughly the top 1% of the pieces written then. I picked this window because it overlaps with the crisis (although the replays of posts from the […]
Read more...By Tom Adams, an attorney and former monoline executive and Yves Smith A common fallacy is to assume that situations are polar: win/lose, black/white, hot/cold, heads/tails. But more often, given A, “not A” is not the opposite of A. Conventional wisdom in the financial media is that the settlement announced by the SEC over its […]
Read more...Although it was unclear how the high concept behind the Volcker rule would translate into legislation, we had doubts from the get-go. The idea is sound: firms that are ultimately playing with government money should be involved only in socially valuable transaction intermediation and fundraising (and all major dealers around the world are backstopped, pretenses […]
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