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from Rolfe Winkler:

Lunchtime Links 8-18

(send links, pics, vids to optionarmageddon at

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.

Manhattan office sales ground to halt in first half (Bloomberg)  "Buyers and sellers are far apart on bids while low interest rates on existing loans mean many sellers can afford to wait, CB Richard Ellis said."

Tax bills put pressure on struggling homeowners (NYT)  First reported on my predecessor blog OptionARMageddon, investors can make a killing buying tax liens from local governments.  They're just buying a receivable and managing collections.  Municipalities can't (or don't want to) collect delinquent taxes so they sell the liens for cash to investors.  They get cash up front and investors can charge steep interest rates while jumping ahead of other creditors with claims on assets in foreclosure, like the bank that owns the mortgage.   Yeah, there's money to be made here, but most investors probably couldn't stomach it...

A CFPA research brief (Baseline Scenario)  Rortybomb guest-posting on BS this week, links to a helpful research brief that discusses why we need a Consumer Financial Protection Agency.  On a related note, Tim Duy comments on the cover story in today's WSJ about tough regulation in Vermont's mortgage market.  More evidence that "financial innovation" is something we can easily do without.

from Rolfe Winkler:

Lunchtime Links 8-17

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.

Bids for Guaranty due today (Reuters)  Looks like FDIC is teeing up another big bank failure this week!

from Rolfe Winkler:

Weekend Links

Amateur video of the helicopter/plane colission over the Hudson last week (YouTube)  Wow.

You're Bob Dylan?  Jersey cops want ID (AP)  Twenty-something cops in NJ stop Bob Dylan, who was reported to be "wandering around."  They have no idea who he is and demand ID before taking him in...

from Rolfe Winkler:

Lunchtime Links 8-13

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.

The Forgotten (Doug Glanville)  Writing on the NYT op-ed page, former outfielder Doug Glanville writes about the plight of pro athletes trying to find a life after they fade from the spotlight.  Glanville is a fantastic writer.

from Rolfe Winkler:

Evening Links 8-12

Who talks jumpers off the Golden Gate?  Ironworkers.  And they're ridiculously good at it. (SF Chronicle)

Inflation and the fall of the Roman Empire (  Very interesting.  The transcript of a speech delivered in 1984.

from Rolfe Winkler:

Afternoon Links 8-11

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."

American graduates finding jobs in China (NYT)

The continuing threat of troubled assets (Congressional Oversight Panel)  More good work from Elizabeth Warren's group.

from Rolfe Winkler:

Lunchtime Links 8-10

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

Krugman's "mission accomplished" moment (NYT)  I've take some liberties titling this link.  In the column, PK takes a bit of a victory lap, claiming we averted a Second Great Depression thanks to fiscal and monetary stimulus.  Once again, no discussion about the long-run negative consequences of not dealing with debt.  Thanks to these policies, we've put ourselves squarely on the Japanese path: a couple decades of stagnation, financed with stimulus and money printing, that may very well end more violently than if we'd just dealt with the problem late last year.

from Rolfe Winkler:

Lunchtime Links 8-6

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.

Board Meeting Handout (FASB)  This appears to be the outline of the new fair value rules FASB is kicking around internally.  Just to warn you, it's pretty wonky.  Currently trying to make heads/tails of it in order to calculate potential impact on bank balance sheets.  If there are any accountants, analysts reading the blog please take a look and let me know your thoughts.

from Rolfe Winkler:

Lunchtime Links 8-5

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.

Taylor Bean suspended from making FHA loans (WSJ)  Funny business going on at the nation's third-largest FHA lender.  Taylor Bean was one of the two targets of the Neil Barofsky's raids earlier this week.  The other was big bank Colonial.   Taylor is dependent on Colonial for its warehouse line of credit.  With Colonial is on the ropes, Taylor investors put together a quick $300m to keep them afloat, and make them eligible to receive government money.  This is just another way lenders are scamming taxpayers and the government to get bailout funding to support home loans.  Dirty business.  Read the last three paragraphs of this article.

from Rolfe Winkler:

Evening Links 8-3

(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.

Hot Waitress Economic Index (NY Mag)

Wall Street profits from trades with Fed (FT)  Makes a great point.  Too bad there aren't any numbers here. But then the Fed won't make that possible; it won't let anyone audit its books.