Lunchtime Links 2-12

February 12, 2010

China tightens rules on bank lending to curb inflation (Bradsher, NYT) Banks in China are chock full o’ excess reserves. Because their economy is growing, loan demand is healthy, so excess reserves are being lent out….multiplying the money supply and causing inflation. U.S. stocks are taking it on the chin because China is the world’s main economic driver at the moment…moves to cool it down, while totally prudent, are bad for stocks.

Georgia gives lenders more rope (Fitzpatrick, WSJ) Not such a good idea for the state topping the charts on bank failures…

BofA forecloses on home for which couple had paid cash (Marrero, St. Pete Times)

NJ Governor declares fiscal emergency, freezes spending (Sloan, CBS2) Wow, a Republican is  actually cutting spending instead of talking about cutting spending.

Me writing about the First Energy/Allegheny deal in the Times (Winkler, NYT) Scroll down the page to “Electric Synergy.”

Volcker rule gives Goldman stark choice (FT) This interview with Paul Volcker puts the lie to press arguments that Goldman will be the firm most impacted by his new “Volcker Rules” because it has the largest prop trading operation. All Goldman has to do is give up its bank charter, which it got in November ’08. The bank doesn’t have much in the way of deposits funding its business. The bank charter was just a gimmick to get access to cheap funding via the FDIC and to get access to the Fed as lender of last resort. And if the crisis comes roaring back, Goldman needn’t worry about failing. They’re still so big and interconnected, regulators wouldn’t let them go down…

Subpenny trading (CFA Institute letter) The latest abuse of the equity market?

Small banks hit snag as they try to raise cash (Sidel, WSJ) Trust preferreds remain a problem…

One comment

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Good article on sov debt Rolfe.

Sentiment these days almost reminds me of summer 2008, when we knew some bad stuff was in the pipeline, but nobody acknowledged the extent of it all.

Stock prices didn’t reflect the risk then, and definitely don’t reflect much, if any risk now. They assume uber growth for 5+ years.

Congrats on the NYT byline, btw. That’s pretty cool.

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