Lunchtime Links 5-14
Detroit shrinks itself, historic homes and all (Kellogg, WSJ) Right-sizing the city is exactly the right approach to deal with decline. Shrinking the city’s fixed cost base frees up resources that can be spent more productively in places where folks still live.
Bank failure watch: Midwest Bank — $3.2 billion of assets (Daniels, ChicagoBusiness.com) Crain’s says the bank is expected to be seized tonight.
Goldman joins race to save ShoreBank (McKinnon/Williamson, WSJ) Article mentions that this bank has good connections, but doesn’t note a key one: Eugene Ludwig. Ludwig, the former Comptroller of the Currency and lately of Promontory Point, is coordinating the capital raising for ShoreBank as Reuters’ Karey Wutkowski reported. Besides Goldman, BofA, Citi and JPMorgan have signed up to help out. The bank is said to be involved in lending in poor communities and for green projects. BTW, they donated to Obama’s campaign…
Paper: The curious case of leveraged ETFs (Alphaville) Be sure to click on the full PDF in the post. Many are getting burned investing in leveraged ETFs. NOT RECOMMENDED for retail investors…
Morgan Stanley CDOs were doomed even at low default rates (Sheen/Moore, Bloomberg) Unfortunately there’s not a deeper discussion of the “feature” that guaranteed the collapse of the CDO in question.
Sarkozy threatened to back out of the Euro (Guardian) Meanwhile….
Euro goes into power dive (Bloomberg) It’s now below $1.24.
Drama queen (YouTube)