Commentaries

from Rolfe Winkler:

Lunchtime Links 8-18

August 18, 2009

(send links, pics, vids to optionarmageddon at gmail.com)

Cost of credit card debt soaring (Sun-Times)  Terry Savage on the way credit card terms are changing as recently passed legislation goes into effect.  Lots of good detail in here, and I like how she concludes the piece:  Unhappy with high interest rates?  Then pay off your balance.

from Rolfe Winkler:

Lunchtime Links 8-17

August 17, 2009

Squeaking by on $300k (WaPo)

Failed Banks weighing on FDIC (WSJ)  The key paragraph is this: "For the 102 banks that have collapsed in the past two years, the FDIC's estimated cost averaged 25% of assets. That is up from the 19% rate between 1989 and 1995, when 747 financial institutions were closed by regulators, according to the FDIC." I wonder: Is that a weighted average?  Elsewhere the writer notes that 3 of the 5 failures last Friday will cost the DIF >50% of the failed banks assets.  But that's misleading.  The biggest failure by far was Colonial, and the estimated losses there are 11% of assets.  I also would have liked the writer to have drilled down on Joe Patten's quote, that this crisis won't cost FDIC as much as the S&L crisis.  If that turns out to be true it will only be because bailouts rescued FDIC from having to deal with failed behemoths Citi and BofA.

from Rolfe Winkler:

Lunchtime Links 8-13

August 13, 2009

Must Read--Next bubble to burst is banks' big loan values ( Jonathan Weil, ht AK)  In their latest quarterly filings, banks were required to list the fair value of their loan books next to their carrying value.  No surprise, most banks are carrying loans at far above their fair value.  And the difference is enough to wipe out most of their capital.  I'd been working on a table of this data in conjunction with my own column, should be coming shortly.

from Rolfe Winkler:

Afternoon Links 8-11

August 11, 2009

Food among the ruins of Detroit (Guernica)  Previously I linked to an article noting Detroit no longer has a single major grocery store within city limits.  Keeping that in mind we have this very interesting article.  One tidbit: "There is such a dire shortage of protein in the city that Glemie Dean Beasley, a seventy-year-old retired truck driver, is able to augment his Social Security by selling raccoon carcasses (twelve dollars a piece, serves a family of four) from animals he has treed and shot at undisclosed hunting grounds around the city."

from Rolfe Winkler:

Lunchtime Links 8-10

August 10, 2009

Spitzer vs. Blodget: The interview (Tech Ticker)  There are six videos.  See the bottom of this post for links to the other five.

from Rolfe Winkler:

Lunchtime Links 8-6

August 6, 2009

More homeowners upside down on mortgages (CR)  According to a Deutsche Bank report published yesterday, 16 million homeowners owe more on their mortgage than their home is worth.  And the figure will go to 25 million by 2011 as house prices keep falling.  These folks don't actually own anything, since their home equity is negative.  What they own is a pile of debt that is owed to the bank, which itself owns ALL of the home's value.  This is bad news for bank balance sheets, which will be seeing write-downs on bad loans for a while.

from Rolfe Winkler:

Lunchtime Links 8-5

August 5, 2009

MUST READ--The debt-inflation myth, debunked by UBS (Alphaville, ht Yves)  Tracy Alloway has a GREAT piece today debunking the idea that we can "inflate our way out of debt."  As I've argued previously, this assumes debt doesn't have to be rolled over.  But of course is does, especially when you're operating with deficits as high as our own.  The consequence of higher inflation, then, is that lenders demand higher interest rates on new debt.  As legacy debt is inflated away, new debt issuance is MUCH more expensive.

from Rolfe Winkler:

Evening Links 8-3

August 3, 2009

(send links, pics, vids to optionarmageddon at gmail)

U.S. raids Colonial bank office in Florida, serving "TARP-related" warrants (Reuters)  Cheers for kicking butt and taking names.  As the special inspector general for TARP, Neil Barofsky has broad authority, including subpoena power and the right to carry a handgun.  This profile in the WSJ quotes critics that say he's got too much Eliot in him, Ness or Spitzer, "over-stepping" his bounds or other such nonsense.  With the vast legal apparatus that rich banksters are able to hide behind, we need a guy who's not afraid to offend delicate sensibilities.