Dysviz I like this

FT.com - Lehman races to find buyer or investor

Sep 11, 8:16pm    (1 review)  investing, finance, house-of-cards, yankee-dollar  http://us.ft.com/ftgateway/superpage.ft?...

From the page: "Moody's, the rating agency, warned it would probably downgrade Lehman's credit rating unless it quickly found a buyer. The cost of insuring against a default on Lehman debt rose as high as 805 basis points on Thursday, before falling later as it became apparent the bank was trying to find a buyer. Lehman's 10-year bonds were trading at distressed levels. Another option for Lehman is to agree rapidly a deal to sell a majority stake in its asset management subsidiary to acquire much-needed capital. A number of private equity groups are expected to submit final bids for the business this weekend, people close to the bank said, although an agreement is likely to be some way off. The turmoil weighed heavily on employees. "There are 25,000 people who are sitting there crying," one banker said on Thursday. "I just hope there's a solution." Lehman Brothers was on Thursday night in talks with potential buyers, including Bank of America, in a last-ditch attempt to stave off collapse after investors gave a thumbs-down to its survival plans. Shares in Lehman, which had halved in value this week, plunged a further 41.8 per cent on Thursday as uncertainty rose about the bank's ability to continue as an independent entity. Lehman executives, led by chairman and chief executive Dick Fuld, began contacting rival banks on Thursday morning after the shares took another tumble in pre-market trading. By Thursday night several banks were in talks with Lehman about buying all or part of it. In addition to Bank of America, those banks believed to be interested include Barclays. Lehman, BofA and Barclays all declined to comment. Nomura, of Japan, which has also been considered a potential buyer, could not be reached for comment. Any bank would be unlikely to mount a solo rescue without a form of support from the US Federal Reserve, similar to the facility the central bank provided to JPMorgan Chase when it agreed to rescue Bear Stearns in March. Bankers said the Fed was keeping a close eye on the situation but it was unclear on Thursday night whether such government support would be on offer and whether it would only be extended to US banks. Pressure on Lehman to find a buyer or investor mounted after both equity and debt investors concluded that plans outlined on Wednesday to spin off its troubled commercial property arm and shrink remaining operations were not sufficiently robust to retain the confidence of clients and trading counterparties."

FT.com - Debate shifts to systemic solution

Sep 11, 8:14pm    (1 review)  investing, finance, house-of-cards, bailout, yankee-dollar, notsofreemarket  http://us.ft.com/ftgateway/superpage.ft?...

Foreign buyers of american debt are becoming worried. That drove the fed to rescue the fanny and freddie may mortgage giants, but will they continue to buy at all? From the page: "he expects a change in the attitude of Asian central banks, which until recently have been a mainstay of the agency market. "They took a long time to get into this market and they are not going to be adding to their positions. Central bank governors are embarrassed at being caught holding this paper. The over-riding mandate of a central bank is to hold liquid assets and the risk of being unable to sell a large amount of agency paper has become more apparent." The problem is that without buyers for troubled mortgage assets and continued uncertainty for buyers of assets that now hold a temporary guarantee from the US government, the markets will remain gridlocked, leaving banks such as Lehman and Washington Mutual scrambling for cover. now the banks want A CUSHION UNDER THE WHOLE FINANCIAL SYSTEM, A GIANT BAILOUT FOR THE WHOLE SORDID MESS OF GAMBLERS! "Investors appear increasingly fearful that, while the Federal Reserve and the US Treasury have undertaken several increasingly dramatic interventions in financial markets this year - including emergency interest rate cuts, the bail-out of Bear Stearns and the government takeover of Fannie and Freddie - a plan is needed to address the market's problems as a whole. Alan Greenspan, former chairman of the Federal Reserve, argues that a more formal framework is needed to address financial institutions in crisis. The tabular content relating to this article is not available to view. Apologies in advance for the inconvenience caused. In the latest edition of his book, released this week, Mr Greenspan says a high-level panel of financial officials should be given broad authority to determine if an institution's failure is dangerous enough to require taxpayer support. If so, the company would be taken into conservatorship, the equity wiped out, a charge imposed on the debts before they are guaranteed and the assets sold.

Atlantic Free Press - Hard Truths for Hard Times - Rouble Crash Course...

Jul 2, 4:36pm    (1 review)  economics, finance, derivatives, credit-crunch, deckofcards  http://afp.cj2.nl/index.php?option=com_c...

telegraaf headline on fortis bank warning i went to the Telegraaf, did find the DFT.nl section, found some comments on the Fortis bank statement, generally people figured that this was not wise to say out loud, yes there was a big problem, nobody disputed that, esp after today's employment figures from the US indicate corporate head offices are shrinking upper level management positions, and the stock exchanges dropped worldwide with the exception of the german market where Deutsche Babk had good quaterly results. But also it was seen as an excuse for the lousy position the bank found itself in, their topman is under a lot of pressure to resign due to bad financial results. The shareprice dropped 20% over the weekend, but climbed back 2% on wednesday. There is heavy criticism of the company, which is a bank insurance company that was involved in the take-over of ABN-AMRO, two large Dutch banks, They had financial problems and raised a lot of money to replenish their coffers. The top man blamed the american bank crisis for their precarious situation, and nobody disputes that, but he is criticised for his role in the bank take-over. His assertion about imminent bank failures in the states is probably of some consideration, as he is in the inside circle of the world's reinsurance business and knows more than the rest of us.. Add to that continuing rumours about City Banks's exposure to bad loans, as well as other reassurance outfits who are on the brink and meaanwhile the situation is not getting any better in the home mortgage area...

Beat the Press Archive | The American Prospect

Jun 2, 8:29am    (1 review)  economics, politics, finance, msm  http://www.prospect.org/csnc/blogs/beat_...

From the page: "I often have occasion to comment on the failure of the media to report on the housing bubble and the risks that it posed to the economy and to families†personal finances. I have made the same complaint about reporting on the stock bubble. There were few stories in any of the major media outlets that warned of the bubble and its likely demise prior to the collapse in the years 2000-2002. I have heard many comments (on BTP and elsewhere) that I am being unfair to reporters, because they are just reflecting the consensus within the economic profession, which managed to overlook the growth of both bubbles. This is an entirely valid complaint against the economics profession. The overwhelming majority of economists completely missed the stock bubble even as it hit its peak in 1999 and 2000 (Iâ€m referring to their public forecasts, not their personal comments to friends). They also completely missed the housing bubble until its deflation was already well underway in 2007. It is easy to verify these facts. The Philadelphia Fedâ€s Livingstone Survey [http://www.philadelphiafed.org/econ/liv/] summarizes the predictions of more than 30 leading forecasters. There is no evidence that these forecasts reflect the expectation of an imminent collapse of the housing bubble in 2006 or even 2007, or the collapse of the stock bubble in 2000-2001. (Another good source is the Blue Chip Financial Forecasts, which present the forecasts of 50 prominent economists. In the fall of 2000, not one of the 50 economists saw the recession coming the following winter. Unfortunately, these forecasts are proprietary and therefore not freely available on the web.) Since the vast majority of economists failed to recognize two huge financial bubbles, the collapse of which had enormous consequences for the economy, it is reasonable to conclude that there is some inherent problem with the nature of the consensus within the economics profession. Either these economists hold views about the world that prevent them from seeing financial bubbles, or the sociology of the profession is such that they are unable to express independent opinions. Regardless of which scenario is accurate, the consensus within the economic profession has twice in the last decade been demonstrated to be a grossly inadequate source for information on the economy. Good reporters should recognize this fact. This means that going to 2 or 3 standard well-credentialed sources will often not be sufficient to obtain a range of views. It is reasonable to expect that reporters will try to find economists who were not surprised by the collapse of the stock and housing bubbles when getting views on the economyâ€s prospects. "

CBC News: Analysis &38; Viewpoint: Heather Mallick

May 27, 5:30pm    (1 review)  business, history, finance, ecomomics, sub-prime  http://www.cbc.ca/news/viewpoint/vp_mall...

From the page: "Ignoring the lessons of history Author argues 'wild finance' is taking down the U.S. economy May 26, 2008 We are living in black swan times. This is an elegant way of describing a deeply frightening phase of economic change as the U.S. begins its economic slide, with power shifting to other blocs and world populations going into convulsions of change. Swans are white. A black swan is next-to-impossible. Thus we are in the midst of a near-impossibility. Nevertheless, it is happening. There are five reasons, as the American commentator and historian Kevin Phillips tells us in his latest book, Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism. They are the "financialization" of the U.S. economy, the private debt bubble, peak oil and the domestic and international politics surrounding it, military imperialism and a political failure to plan ahead. We are familiar with some, less so with others, but no one has summed up this positive flotilla of black swans as well as Phillips has. He is an interesting man, his intellectual restraint appearing startlingly novel when he was recently interviewed on The Colbert Report, a show designed as a backhanded tribute to stupidity. Phillips, 68, was a devoted Republican who helped devise the polarizing Southern strategy that brought Nixon into office in 1968. The inconvenient barrier between Phillips and the party line has always been his talent for observation and deduction. For him, the facts had to fit. In 1993, he wrote a book, Boiling Point: Democrats, Republicans and the Decline of Middle Class Prosperity, that Bill Clinton used to find a new constituency. Appalled by what he helped inspire politically, he has since turned on the Republicans and to a lesser extent the Democrats, most recently writing a trilogy of books - American Dynasty on the dangers of inherited power, the second, American Theocracy, on the triple threat of radical religion, oil reliance and debt and this, the third, on how wild finance, a.k.a. bad money, has become the biggest - and least-known - sector of the U.S. economy. The truism that the West has a post-industrial economy makes me wince. In fact, we do have a manufacturing economy; it just happens to be in China. But yes, the West has a financial economy, so to speak, a huge thing like landfill with a thirst for human flesh. The man in the street doesn't know it exists. In 1950, manufacturing made up 29.3 per cent of the U.S. economy, and finance only 10.9 per cent. In 2004-05, manufacturing was at 12 per cent and finance at 20.4 per cent. Since then-president Clinton deregulated much of the financial system in 1999, the sector has ballooned to popping point. It is the biggest part of the economy, the most badly measured and the least understood. Here's the short form: As manufacturing died locally, along came the '80s, with mergers, debt-fuelled corporate buyouts, massive layoffs, greenmailing and asset shuffling. This era was marked by government bailouts of financial institutions coated with criminality (remember the S&L scandal). That was the seed. Without the bailouts, Americans might have been reminded of the healthy fear of debt that had gripped them since the Depression, of Richard Nixon's loathing of speculators, of Dwight Eisenhower being perfectly happy with a top income tax rate of 91 per cent. But if Washington bails you out every time you take a crazy gamble . . .? Times have changed. Rich and middle-class Americans became smug and the investment cowboys looked upon them with a wild surmise. "

http://www.reportonbusiness.com/servlet/story/RTGAM.20080411.wfedtrans0411...

Apr 11, 8:07pm    (1 review)  economics, finance, deflationrisk, alangreenspan  http://www.reportonbusiness.com/servlet/...

From the page: "Fed feared deflation when it cut rates in 2002 MARTIN CRUTSINGER The Associated Press April 11, 2008 at 12:10 PM EDT WASHINGTON â€" Just-released transcripts show the U.S. Federal Reserve was worried about the threat of deflation when it decided to cut a key interest rate by a half-point in November 2002. The transcripts, released Friday, show then-Federal Reserve Chairman Alan Greenspan and his colleagues were concerned about a sluggish recovery from the 2001 recession and the possibility that the country could tumble into a period of deflation, or falling prices. Mr. Greenspan expressed concerns about the country falling into a â€oedeflationary hole.” â€oeIt's a pretty scary prospect and one that we certainly want to avoid,” Mr. Greenspan told other members of the Federal Open Market Committee. The Fed did cut the federal funds rate, the interest that banks charge on overnight loans, by a half-point, moving it from 1.75 per cent down to 1.25 per cent, the lowest level in 41 years. The United States last experienced a prolonged bout of deflation during the Great Depression of the 1930s. But Fed officials worried that the country could fall into the same problems that Japan faced in the 1990s â€" a decade of falling prices and a stagnant economy. The Fed would cut the funds rate one more time the next year, pushing it to a 45-year low of 1 per cent on June 25, 2003. The central bank left the funds rate at that level for an entire year until it began a gradual move to raise rates in June 2004. Some critics have argued that there was never a serious threat that the United States would experience a bout of deflation and that the extremely low interest rates engineered by the Fed created a housing boom in this country that drove prices and sales up to record levels only to burst in 2006, sending shock waves through the economy. The transcripts show that Fed officials at the time were not that worried about the effects that an extremely low funds rate might have on the economy, arguing that if inflation started rising, the Fed could reverse course and start raising rates but that a bout of deflation would be harder to combat. On the possibility that a half-point cut might be too much, Mr. Greenspan said, â€oeIt's a mistake that does not have very significant consequences. On the other hand, if we fail to move and we are wrong, meaning that we needed to, the costs could be quite high.” On deflation, Mr. Greenspan said, â€oeI don't think we could adjust all that easily if we were to fail to move and the economy began to deteriorate and we were looking into a deep deflationary hole.” William McDonough, president of the New York Federal Reserve Bank, argued that if the Fed decided to cut rates by only a quarter-point, financial markets would view Fed officials as â€oea bunch of wimps, which is not an attractive assessment for a group that is supposed to be a very important public body.” Current Fed Chairman Ben Bernanke, who had joined the Fed earlier that year as a board member after having been an economics professor at Princeton, supported Mr. Greenspan's recommendation that the central bank cut rates by a half-point. In discussing the economy, Mr. Bernanke said it appeared that the country was experiencing the same type of â€oejobless recovery” that had occurred for a prolonged period after the 1990-91 recession and that a cut in rates was needed to boost growth. "

reportonbusiness.com: Feeling betrayed, Greenspan hits back

Apr 11, 7:04pm    (1 review)  economics, politics, finance, derivatives, dollar-meltdown  http://www.theglobeandmail.com/servlet/s...

From the page: "Neither tougher regulation nor tighter monetary policy would have suppressed the real estate bubble, Mr. Greenspan added, taking an apparent swipe at those now intent on re-regulating Wall Street. "I am reasonably certain that I am right here," insisted Mr. Greenspan, an early admirer of libertarian philosopher Ayn Rand. And if someone can prove him wrong, he's ready to take responsibility. "I do not have a vested interest in holding wrong ideas." So what is to blame for the credit crisis? Mr. Greenspan points the finger at a global savings glut that pushed interest rates everywhere to exceptionally low levels, in spite of his own efforts to push them higher in 2004. "We tried and we failed," Mr. Greenspan told CNBC. Secondly, the core of the subprime mortgage mess "lies with the misjudgments of the investments community," he wrote on FT.com, the Financial Times website. Mr. Greenspan seemed particularly aggrieved by the jabs of fellow economists, who once hailed him as "the greatest central banker who ever lived." The Journal described Mr. Greenspan as "bemused and dismayed" by the ferocity of his antagonists, some of them his friends. Among them is John Taylor, a former top U.S. Treasury official and Stanford University economist, who says low interest rates overheated housing prices. Two men who sat alongside Mr. Greenspan on the Fed's interest-rate-setting committee - William Poole and Robert Parry - have concluded that, looking back, rates were kept too low for too long. And in a speech yesterday in New York, Mr. Greenspan's predecessor, Paul Volcker, took both Mr. Bernanke and Mr. Greenspan to task. Mr. Volcker, who chaired the Fed from 1979 to 1987, said the current Fed was operating "at the very edge" of its legal authority by bailing out investment bank Bear Stearns. And he faulted regulators in the Greenspan era who allowed the subprime mortgage mess to morph into "the mother of all crises." Since leaving the Fed in 2006, Mr. Greenspan has written a best-selling book, The Age of Turbulence, and launched a successful career as a speaker and consultant to banks and hedge funds. He reportedly commands fees of up to $250,000 (U.S.) for his speeches."

26econ.com & Economics Blog Directory &038; Ranking

Apr 8, 9:32pm    (8 reviews)  economics, finance, meltdown, recession  http://www.26econ.com/economics-blog-dir...

a list of top rated economics blogs listed by traffic count

http://www.myprops.org/content/McCains-chief-economic-adviser-Phil-Gramm...

Apr 5, 11:19pm    (1 review)  economics, politics, banking, finance  http://www.myprops.org/content/McCains-c...

more revealing info on the banking regulations and liberalisation. Turns out Mc cain's economic adviser was instrumental in deregulating banks and made a handsome profit in being a lobbyist for them... http://themoderatevoice.com/politics/bill-clinton/18787/phil-gramm-mccains-terrorist-in- pinstripes/ Phil Gramm, who is co-chair of McCain's campaign, is not just another lobbyist. He is the man most responsible for the repeal of Depression-era banking regulations that have led directly and inextricably to much of today's economic turmoil, and parlayed that classic example of legislative legerdemain into a lucrative lobbying career for the very people who scratched the smug Texan's back -- as well as McCain's -- on Capitol Hill. Gramm was the biggest of the big guns behind the 1999 repeal of the banking regulations -- the Gramm-Leach-Bliley Act -- which was officially called The Financial Services Modernization Act. (Don't you just love the name!) Passage of the law was greased with an astonishing $300 million in lobbying money, and it encountered little opposition other than from those old-fashioned banks that actually insure your deposits, while receiving the enthusiastic blessing of the Bill and Hillary Clinton co-presidency. And you had better believe that the so hands-on First Lady was all for it. for more information listen to this fabulous interview with Michael Greenberger In this highly educational interview, Mr. Greenberger discusses the Phil Gramm led repeal of Depression-era banking regulations multiple times: http://www.npr.org/templates/story/story.php?storyId=89338743 "Perplexed by the U.S. economy? You're not alone. Law professor Michael Greenberger joins National Public Radio's Fresh Air to explain the sub-prime mortgage crisis, credit defaults, the shaky future of other types of loans and what we can expect from the U.S. financial markets. Greenberger is a professor at the University of Maryland School of Law and the director of the University's Center for Health and Homeland Security." Click "Listen Now" near the top of the page.

THE REAL SPITZER STORY | The News is NowPublic.com

Mar 23, 5:12pm    (1 review)  banking, finance, derivatives, subprime  http://www.nowpublic.com/world/real-spit...

From the page: "THE REAL SPITZER STORY by White Noise | March 14, 2008 at 10:55 pm | 342 views | 10 comments THE REAL SPITZER STORY "This is not the Mounties who get their man, this is the Mounties who get the political targets for their man ! " Greg Palast Just a hint¦Follow the money ! While New York Governor Eliot Spitzer was paying an escort $4,300 in a hotel room in Washington, just down the road, George Bush's new Federal Reserve Board Chairman, Ben Bernanke, was secretly handing over $200 billion in a tryst with mortgage bank industry speculators. Both acts were wanton, wicked and lewd. But there's a BIG difference. The Governor was using his own checkbook. Bushâ€s man Bernanke was using ours. Headlines in the financial press: One was Wall Street Declares War on Spitzer - It was the night of February 13 when Spitzer made the bone-headed choice to order take-out in his Washington Hotel room. He had just finished signing these words for the Washington Post about predatory loans :â€oeNot only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye. TWO MILLION FAMILIES WILL LOOSE THEIR HOMES ...but lonesharks will get their money & the houses too !!!!! Bush, Spitzer said right in the headline, was the "Predator Lenders' in Washington to launch a campaign to take on the Bush regime and the biggest financial powers on the planet. Eliot's Mess : The $200 billion bail-out for predator banks and Spitzer charges are intimately linked http://www.gregpalast.com/elliot-spitzer-gets-nailed/"