Commentaries

from Rolfe Winkler:

Evening links 12-14

December 14, 2009

Substantial bank losses needed to fix housing (Bloomberg) To avoid foreclosures, principal has to be written down. That implies hefty losses, especially for banks that hold lots of home equity loans on their balance sheet. Such loans get wiped out before first mortgages lose a penny. Complicating matters, many big banks service both the first and the second mortgage, which means they are highly conflicted. They don't want to eat a loss on the second mortgage, even if writing it down would make the first perform much better...

Euro at $1.50 — a disaster or an alibi?

By Paul Taylor
October 20, 2009

OUKTP-UK-FINANCIALThe French can never resist blaming a strong currency for their misfortunes. So it should come as no surprise that Henri Guaino, President Nicolas Sarkozy’s influential political adviser, has said that having the euro at $1.50 is “a disaster for European industry and the economy”. Since the euro stood at just above $1.49 as he spoke on Tuesday, Guaino presumably sees the single currency area as on the edge of the abyss. 

Latvia: let the lat go

July 29, 2009

Do as you would be done by. This excellent rule surely applies as much in monetary affairs as it does in other fields of human endeavour. Those who loudly urge Latvia not to devalue its currency should reflect upon it.

IMF undermines EU fight for Lativa peg

By Paul Taylor
July 16, 2009

 Just when it looked as if Latvia’s currency peg to the euro had weathered the storm, the International Monetary Fund has raised fresh doubts by withholding funds for the Baltic European Union newcomer.