Posts Tagged ‘subprime’
Friday, May 20th, 2011
We sometimes get too busy to comment on some important issues as was the case with last month’s announcement that Standard & Poor’s revised its outlook on the long-term AAA rating of U.S. debt to negative from stable. It caused a stir especially from tea party folks and GOPers who only discovered the budget deficit recently.
What struck me most about the announcement was the source. Frankly, I can’t give much credence to any of the official ratings agencies who arguably are the most guilty entity in our current economic crisis. They are the ones that slapped AAA ratings on the toxic subprime assets behind the crisis and who had conflicts of interests with those that created those securities. Turns out their current analysis may not be much better. Jay Feuerstein talks about how they are off the mark in a recent op ed piece titled “S&P is dead wrong about U.S. debt.”
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Tags: bailout, Economic outlook, subprime
Posted in economy | 1 Comment »
Friday, December 3rd, 2010
The Financial Times reported yesterday that non-U.S. banks were among the biggest users of the $3.3 trillion in emergency lending facilities and programs created to address the financial crisis that emerged in the summer of 2007.
We know this thanks to the Dodd-Frank Act, which requires the Federal Reserve to post transaction level details of the 13 facilities and programs instituted by the Fed to help alleviate the global credit crisis.
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Tags: bailout, Congress, Federal Reserve, subprime, TARP
Posted in Regulatory/actions, creidt crisis | No Comments »
Wednesday, November 24th, 2010
Warren Buffett wrote an interesting op ed piece in the New York Times last week thanking Uncle Sam for the bailout. In it he points out the dire consequences we were in back in 2008 and while acknowledging that the government missed the numerous warning signs leading up to the crisis he gives the government and the leaders who orchestrated the bailout high marks.
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Tags: bailout, Federal Reserve, subprime, TARP, Treasury
Posted in economy | No Comments »
Tuesday, December 22nd, 2009
The Nation recently published an interesting article on the financial crisis of 2008 citing the head of the obscure regulatory body the Office of the Comptroller of the Currency (OCC), John Dugan, as one of the prime architects of our current economic woes.
I’ve read several lists citing people to blame for last year’s financial turmoil and Mr. Dugan, if cited, certainly wouldn’t be on the list of usual suspects.
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Tags: bailout, Congress, subprime, Treasury
Posted in General, Regulatory/actions | No Comments »
Monday, April 6th, 2009
Many fingers have been pointed in who started the subprime mess. Which administration is to blame? What regulator dropped the ball? Although it’s been said this is a very long term problem (perhaps had its genesis as far back as Reagan), the constant tinkering of rules and regulations and pressure by administrations to push home ownership have continued feed the fire that now is an inferno. Some enterprising person found this story nytimes1999 from the New York Times pretty much predicting the financial crisis today. Peter Wallison of the American Enterprise Institute is the soothsayer in the 1999 article. In February 2009 he wrote a piece for the American Spectator providing an updated view and laying the blame at alot of doors.
Tags: American Spectator, Fannie Mae, New York Times, Peter Wallison, subprime
Posted in economy | No Comments »
Monday, September 29th, 2008
Albert Einstein is noted for stating, “you should make things as simple as possible but not any simpler.”
Perhaps that could help us in understanding the current debate over the possible bailout of our credit markets. I know the $700 billion bailout package worked out over the weekend was voted down today but the 777 point drop in the Dow Jones Industrial Average should bring some folks back to the bargaining table. I get the feeling that a lot of people, including people in the U.S. Congress still don’t understand what this is about and faced with that lack of understanding many of our representatives put their collective fingers up in the air and voted accordingly. The winds may be shifting after today’s carnage in the markets.
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Tags: bailout, Federal Reserve, subprime, Treasury Dept.
Posted in Regulatory/actions | 1 Comment »
Monday, July 21st, 2008
The opening paragraph of the Securities and Exchange Commission’s (SEC) emergency order restricting naked short selling of Freddie Mac, Fannie Mae and primary dealers issued on July 15 read:
“False rumors can lead to a loss of confidence in our markets. Such loss of confidence can lead to panic selling, which may be further exacerbated by “naked” short selling. As a result, the prices of securities may artificially and unnecessarily decline well below the price level that would have resulted from the normal price discovery process. If significant financial institutions are involved, this chain of events can threaten disruption of our markets.”
This preceded the SEC using Bear Stearns (BSC) as an example of what can happen when rumors get out of control, which begs the question as to why the government allowed—and supplemented through guarantees— JP Morgan’s purchase of BSC at such a discount. Shouldn’t shareholders get compensated?
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Tags: ewmergency order, false rumors, SEC, subprime
Posted in Regulatory/actions | No Comments »
Wednesday, July 9th, 2008
There has always been something controversial about the Federal Reserve System and it has been a target for conspiracy theorists thanks to its complex structure and mix of private and public underpinnings. For an institution that is not technically part of government it wields a huge amount of power over our economy and has the authority to picks winners and losers as demonstrated by its recent intervention in the blow-up of investment bank Bear Stearns.
Tuesday Fed Chairman Ben Bernanke politely asked for additional powers. He noted in a speech to the Federal Deposit Insurance Corporation that, “Another possible step to reduce the incidence and severity of financial crises, recently proposed in the Treasury blueprint for regulatory reform, would be to task the Federal Reserve with promoting the overall stability of financial markets.”
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Tags: Bear Stearns, Bernanke, Federal Reserve, subprime
Posted in Regulatory/actions | No Comments »
Tuesday, June 24th, 2008
It has been almost one year since the subprime problems first surfaced last July as two Bear Stearns hedge funds acknowledged that they had lost virtually all of their funds. It was the beginning of a slow drip of disturbing information regarding the extent financial institutions, primarily investment banks, were affected by subprime holdings.
While it was the collapse of a couple of hedge funds that introduced us to the problem, it was the investment banks that had the greatest exposure. So much so that the Federal Reserve had to open its lending window to these institutions for the first time in 80 some odd years and arrange the bailout of Bear Stearns. And while hedge funds continue to be watched with suspicion, it is the banks who have had to book billions of dollars of losses due to this exposure.
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Tags: Hedge funds, Investment Banks, subprime
Posted in Markets, Mergers, Regulatory/actions, Trader/Managed Funds | 1 Comment »
Friday, June 6th, 2008
This week The Tonight Show’s second banana Ed McMahon has been discussing his financial difficulties in People magazine and last night he appeared on Larry King Live to discuss the foreclosure of his home, being $644,000 in arrears on the $4.8 million house.
While many celebrities have been sharing the Celebrity Foreclosure spotlight, including NLB outfielder Jose Canseco, Motown superstar Aretha Franklin, boxer Evander Holyfield and that jerk from the NBA Latrell Sprewell, McMahon, still recuperating from having broken his neck, is certainly more sympathetic and took the opportunity to publicly address the situation in a way that could potentially help someone else.
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Tags: foreclosure, Housing, subprime
Posted in Uncategorized | No Comments »
