Friday links don’t look very encouraging
A long-overdue tab dump which will make me feel much freer over the long Memorial Day weekend:
$400 billion of Lehman Brothers assets (“at nondistressed prices”) are being valued at $45 billion.
Rick Bookstaber: The Flight to Simplicity in Derivatives
Models Didnâ€™t Bring Down Wall Street; People Brought Down Wall Street: I basically agree with this, although it’s couched as though we disagree. (I’m the “author who has been widely published on the subject of Wall Streetâ€™s use of mathematical models” the blog entry is talking about.)
U.S. Household Deleveraging and Future Consumption Growth: The future’s not pretty. Yet another case where a very long boom is likely to be followed by a similarly long bust, and yet another reason not to get too bullish right now.
An interesting question from Willem Buiter: “interest on money is forbidden by the Quran. I donâ€™t know what Sharia scholars would have to say about negative nominal interest rates.”
Ryan Chittum sees “Hints of an Explosive Wall Street Story from FTâ€™s Tett” — he may be right, but I don’t smell the same smoking gun that he smells. On the other hand, if there really are banks which have positioned themselves to benefit from a bankruptcy, only to then push that borrower into bankruptcy, Chittum is right that all hell would break loose — especially if they turned out to be US banks. Banks have a lot of power to decide who gets to roll over their loans and who doesn’t. They should never abuse that power for their own speculative profit.