Afternoon Links 3-25

March 25, 2010

Must-Read: Debunking Michael Lewis subprime short hagiography (NakedCapitalism) Worth reading the whole piece. Lewis, it must be said, is a storyteller first, a journalist second. Witness his habit of hyperbolizing his subject matter. In Moneyball, the Oakland A’s success was attributed to on-base percentage. He mentioned, but completely underplayed, the fact that they had the best pitching staff in the majors. In The Blind Side, his description of Michael Oher’s size made him out to be the second coming of Paul Bunyan. At 309 lbs, he’s not even the biggest guy on the Ravens line. And Healtheon wasn’t exactly The New New Thing after all…

Social Security to see payout exceed pay-in this year (Walsh, NYT) A year ago this wasn’t supposed to happen till the end of the decade, then the estimate was revised down to 2016. Now it’s this year. Yet still we’re not including our unfunded entitlement obligations in our calculation of the national debt. Speaking of which…

Treasurys slide after tepid auction (Zeng, WSJ)

Bernanke signals asset sales may have bigger role in exit plan (Lanman/Torres, Bloomberg) Would be happy to be proved wrong here, but even if the Fed unwinds some of these positions (or simply lets them run-off as mortgages are prepaid), my bet is that they’ll use continued deflationary pressures to justify future asset purchases.

Q4 mortgage metrics report (OCC/OTS) Oodles of data on mortgage performance. I’ll have a post on this later.

State regulators take over part of Ambac’s book (Wilchins/Comlay, Reuters) Ambac’s CDS counterparties will get about 25 cents of cash on the dollar from this deal, with more coming later potentially. When Eric Dinallo was Chairman of the NY Dept of Insurance, he forced counterparties to settle for pennies as well (see Merrill accepting 13 cents on the dollar for contracts sold by XL Guarantee). Compare to Tim Geithner, who paid out 100 cents to AIG’s counterparties.

Casting TBTF the movie (HuffPo) A very clever slideshow. I think Ben Kingsley as Bernanke is my favorite choice. Who’s seen Sexy Beast? That’s the portrayal of the Fed Chair we need. 😉

Why didn’t I think of this? (imgur)

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