Commentaries

from Rolfe Winkler:

Afternoon links 1-13

January 13, 2010

Must Read -- Kyle Bass: Testimony before the FCIC (fcic.gov) Bass is a hedgefunder that made big profits betting against subprime. His testimony has many fascinating facts and figures. [The pie charts on page 9 look familiar.]

from Rolfe Winkler:

Crisis inquiry commission hearings today

January 13, 2010

UPDATE: Wow, if the questioning by Phil Angelides of Lloyd Blankfein is any indication of how these hearings are going to play out, they will be much fun to watch. He really pressed Blankfein and the two got combative. Too bad he didn't have more time...

from Rolfe Winkler:

SEC shifts focus, but new complaint again fails Rakoff test

January 13, 2010

After Judge Jed Rakoff threw out its original $33 million settlement with Bank of America, the SEC shifted the focus of its case. In its new complaint filed today, the SEC still accuses BofA of misleading shareholders for failing to disclose material information. But the issue this time isn't bonuses, it's Merrill's fourth quarter losses.

from Rolfe Winkler:

Of penny stocks and buried treasure

January 12, 2010

Last Friday bulletin-board traded Marine Exploration announced that it had discovered a shipwreck from 1690 off the coast of the Dominican Republic (ht Ari Weinberg). The company issued a press release trumpeting a "great discovery" and its stock popped 50%. But the release smells fishy...

from Rolfe Winkler:

Lunchtime Links 1-12

January 12, 2010

China surprises with bank reserve hike (Xin/Rabinovith, Reuters) The Fed could learn something from the PBOC. This sudden move to tighten bank lending maintains the PBOC's reputation for acting without warning. If the Fed had a similar rep, U.S. lenders wouldn't be so cavalier taking interest rate risk.

from Rolfe Winkler:

Yield curve can’t drive profits if banks won’t lend

January 11, 2010

A steep yield curve should mean fat profits for banks. It hasn’t.

Unable to find qualified borrowers and worried that interest rates have nowhere to go but up, banks are stockpiling cash and securities while letting loans dwindle. It turns out banks won’t lend till rates rise. The trouble is, if rates rise their capital will take another hit, leaving them little to support new lending.

from Rolfe Winkler:

Lunchtime Links 1-11

January 11, 2010

Shoddy tayloring (George Cooper) The author of my favorite book on the financial crisis now has a blog. His first post tears down Bernanke's recent speech absolving his/Greenspan's easy money policies for inflating housing bubble. It's a bit technical, but very good.

from Rolfe Winkler:

CFPA can’t arrive fast enough for the elderly

January 9, 2010

Odd that AARP is only just now throwing its support behind the proposed Consumer Financial Protection Agency, after the House watered down many key provisions in its reform bill. WSJ's Michael Crittenden reports that the lobby group for retirees wrote a letter to Senators Dodd and Shelby of the Senate Banking Committee which said:

from Rolfe Winkler:

Bank failure Friday

January 9, 2010

Only one failure last night (the first of the new year and the first since the week before Christmas).

from Rolfe Winkler:

Lunchtime Links 1-8

January 8, 2010

Bank regulators issue interest rate advisory (FFIEC) This may sound boring, but it's rather important. The FFIEC -- a collection of bank regulators including FDIC, OCC, the Fed, OTS and NCUA -- hasn't issued such a warning since 1996. It wants banks to make sure they can handle rising interest rates....which seems to me a HUGE disincentive to lend. 5% mortgages originated today will lose mucho value as rates go back up. This is a huge reason banks "aren't lending," because up is the only direction for rates to go!