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!
Is this the start of the big one (Yves Smith) Has the bear market rally topped out? Yves also has some choice words for President Obama, who she very correctly describes as being “long on charisma and short on resolve.”
Bears prowl Wall St. as insiders dump stock (Reuters) Drawing on data from InsiderScore, this article reports that company execs have been selling shares at a healthy clip recently. Apparently they aren’t so taken by green shoots.
TALF extended (Federal Reserve) The Term Asset-Backed Securities Loan Facility (TALF) is being extended from the end of this year into next year. This if a financing scheme that provides cheap, non-recourse debt to investors wanting to take a flyer on asset-backed securities. But it’s the Fed (and ultimately taxpayers) who would ultimately bear any losses. Just another example of a “temporary” bailout that the government refuses to eliminate.
Little old lady? (imagevat) Nope, that’s Aerosmith’s Steven Tyler.
Cocaine contaminates majority of U.S. currency (Scientific American) I always thought this was an urban legend…
Fashion, Qaddafi-style (VanityFair) An interesting slide show.
Usain Bolt’s 9.58… (I felt a little cheated when Bolt pulled up to celebrate during the Olympics. What could the guy have run if he finished the race strong? At yesterday’s World Championships, we got our answer. American Tyson Gay ran a 9.71. That’s an astonishing time itself.)