Commentaries

Now raising intellectual capital

Counterparties

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Well, it turns out there is a secret plot against the dollar — except that it is being hatched in Washington, not in the Persian Gulf or elsewhere. And it could be a very good thing for the U.S. economy and Obama. — Simon Johnson.

The idea of tax credits for companies that create jobs is gaining traction in Washington. — Catherine Rampell.

The rally in gold doesn’t look like much of a rally in euros or yen. — Bespoke Investment Group

The securitization market is still seized up — and that’s a problem for the recovery. — Jenny Anderson, Yves Smith.

from Rolfe Winkler:

Lunchtime Links 10-6

The demise of the dollar (Independent, ht Marco) This article may be the reason gold is up big today. It claims "Arab states have launched secret moves with China, Russia and France to stop using the US currency for oil trading." Perhaps.

Wall Street's near death experience (Vanity Fair) An excerpt from Andrew Ross Sorkin's book on the financial crisis. Can't wait to get my copy. Felix has some commentary here.

Counterparties

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Australia is the first G20 nation to raise interest rates. — Reuters

And you shall know us by our velocity:The Nasdaq stock market is the world leader in share turnover. — Alea.

Is Reagan to blame for our debt crisis? — Megan McArdle

The puzzle of Argentina’s post-war economic fall. — Edward Glaeser.

The recession is forcing hundreds of thousands into early retirement. — Zubin Jelveh.

from Rolfe Winkler:

Lunchtime Links 10-5

Buyout firms profited as a company's debt soared (NYT) Good piece. Shows how private equity/leveraged buyouts can end up as nothing more than looting operations. To be sure, someone has to be stupid enough to buy bonds that fund special dividends for private equity owners. They end up losing, as they should. But so does the company in question.

Borrowing for Dividends raises worries (WSJ) Liz Rapaport files a timely story in light of the above. Reason #256 that we've learned nothing from the financial crisis. Our own Agnes Crane blogged on this last week. It is just one company. But with corporate issuance on fire, it's probably only a matter of time before more companies raise money to pay special dividends or buy back stock.

Counterparties

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Bank of America to pick an “emergency” CEO this week. — Wall Street Journal.

“If you assume, as we do, that the equity of BAC is a zero, where should bond holders be haircut in order to recapitalize the bank without further financial support from the US taxpayer?” — Christopher Whalen

Counterparties

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Simply raising bank capital requirements is not enough. “Better alternatives are to have more uniformitiy in capital requirements across leveraged financial institutions, to require more ‘contigent capital,’ as well as preservation when regulators see a crisis coming.” — Raghuram Rajan

Citadel Investment Group reaps about $1 billion a year from a unit that does high-frequency trading. – Wall Street Journal.

from Rolfe Winkler:

Lunchtime Links 10-1

Comcast denies it has a deal to buy NBC Universal (Reuters) That doesn't mean they aren't working on a deal. Comcast has wanted to own content for some time. The distribution model on its own isn't as powerful. Recall their failed attempt to buy Disney.

Georgian wasn't on problem bank list (Jonathan Weil) Another good one from Weil. He notes that Georgian Bank, which failed last Friday and will cost FDIC nearly $900 million, wasn't even on the problem bank list as of June 30th. There were 416 banks on it at that the time. Not included, of course, are problem banks Citigroup, BofA and Wells Fargo, all of which would be goners if not for direct/indirect government support.

Counterparties

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The financial crisis is far from over. The International Monetary Fund estimates that banks, primarily European ones, will need to write down as much as $1.5 trillion in additional bad debt by the end of next year. — Clusterstock.

How a Cadillac tax could cut healthcare costs. — David Leonhardt.

It’s not that models missed the coming financial crisis, it’s that analysts were using the wrong kinds of models. ” ‘Flow of funds’ models may be the way forward for anticipating finance-induced recessions,” contends Dirk Bezemer of the University of Groningen. — Vox EU.

from Rolfe Winkler:

Lunchtime Links 9-26

Chicago cabbies want $50 puke fee (Sun-Times) Can you blame 'em?

Schadenfreude alert: Ponzi-schemer Stanford gets in fight at Texas jail (Bloomberg)

Fed weighs naming borrowers (WSJ) Ron Paul's "audit the fed" drive, and Bloomberg's FOIA request are pressuring the Fed into disclosing more information about its lending programs.

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