Here we are, in the midst of the worst financial crisis since the Great Depression, and what do we see? Central banks madly pumping water out of leaky, listing vessels, some discussion of how to patch the most visible holes, but perilous little consideration of how to correct the defects of construction, poor choice of […]
Read more...I am still recovering from the Milken Conference, and unlike my fellow blog panelists Paul Kedrosky, Felix Salmon and Mark Thoma, have not written any posts on particular sessions. In part, that was because in my other life as a consultant, I am well aware of the dangers of relying on memory even though mine […]
Read more...Because I have yet to throw my stuff back in my bags to be on a morning plane back to NY, I must be brief. I have not had the chance to think about Avinash Persaud regulatory proposals at VoxEU deeply, but at a first glance, they sound appealing. However, the devil will lie in […]
Read more...Greg Ip of the Wall Street Journal reports on the harsh criticism of the Fed’s role in the Bear deal by Vincent Reinhart, who rcently was the Fed’s most senior staff member. What is ironic about the Fed’s bailout is that it is unpopular on the left and the right. The left does not like […]
Read more...Henry Kaufman, aka Dr. Doom in his heyday as Salomon’s chief economist when the firm was at the peak of its power, argues in “Finance’s upper tier needs closer scrutiny,” that the very biggest financial institutions need a regulator with the savvy and reach to supervise them effectively. Kaufman put the number at roughly the […]
Read more...We have the rare spectacle of Willem Buiter admitting he doesn’t have an answer, but in fairness, he is looking at a throny problem. Buiter considers the question of what to do about the financial sector once the crisis has passed. He provides a scathing assessment of the workings of financial capitalism, but is pessimistic […]
Read more...I am frequently mystified at what goes on in the markets. I am even more mystified when people who ought to know better make pronouncements that appear to be profoundly counter-factual. Even if they are talking their own book, the high odds of being revealed as bald-faced liars proven wrong ought to make them worry […]
Read more...A page one story in the Wall Street Journal, “Merrill Upped Ante as Boom In Mortgage Bonds Fizzled,” tells the sorry tale of how the brokerage giant did so much damage to itself via a pathological disregard for risk at the very time when the mortgage markets were about to sour. The firm is still […]
Read more...John Dizard, in “Fed plan is spoilt by its backing of hypocrites,” returns to a notion he has brought up in some recent Financial Times articles, namely, that the amount of funds that banks need to rebuild their balance sheets is so large that it cannot be obtained without some form of government sponsorship. Note […]
Read more...Henry Kaufman, former chief economist of Salomon Brothers in its heydey and a Wall Street eminence grise, joins the chorus of critics who said that the Fed’s failure to regulate got us into our economic mess. Note that Kaufman is not new to this theme, just more blunt, as a post from June of last […]
Read more...The Financial Times reports a rare bit of encouraging news on the credit crisis front, namely, that investment banks have been making less use of the Fed’s liquidity facilities of late: Direct borrowing from its new primary dealer credit facility fell $8bn from $34bn (£17bn) to $26bn in the week to April 9, the Fed […]
Read more...Floyd Norris of the New York Times, in an otherwise fine piece, “It’s a Crisis, And Ideas Are Scarce” has a paragraph that set my teeth on edge. But let’s deal with the parts that have merit first, and hold the rant in abeyance. Norris uses the Paul Volcker’s speech at the Economic Club of […]
Read more...Just when you think you’ve heard everything about how low the Fed has stooped to rescue an industry that really ought to be left to twist in the wind a bit, another squirmy critter crawls out from under a rock. Investor Scott directed us to a Bloomberg story that cites a Morgan Stanley report which […]
Read more...As Bloomberg reports. Goldman lost money on more trading days in the first quarter than Lehman or Morgan Stanley, although its winning days outnumbered its losers by more than four times. Thus, the fact that Goldman outdid its rivals on this peculiar metric is a sign of undue caution on the part of its competitors, […]
Read more...John Plender in the Financial Times offers a hit list of what he views as the obvious priorities for financial services reform and assesses the odds of them being implemented. It’s a useful exercise, but also a sobering reminder of how difficult it is to effect change in an industry that has proven to be […]
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