Monetary System

An article in the FT caught our eye that makes plain that the TALF (Term Asset Security Program) is a bailout for the shadow banking system (HT Tom). The bailouts for the banking industry continue unabated despite a change in Administration…

Back on March 6th, I noted that the nationalized insurance company AIG had settled Credit Default Swaps contracts with a number of counterparties at the top of the market. In effect, AIG was offering a hidden subsidy to its counterparties…

The large bonuses at AIG have sparked yet another wave of revulsion amongst American taxpeayers. And rightfully so. This company has cost taxpayers $170 billion and counting and yet the bonuses of the same individuals complicit in the…

Last summer, as a number of sinister revelations were made about the goings-on in the financial services sector, I speculated that we would definitely see the government going after individual executives for illegal activities. I saw…

The Wall Street Journal video gives the scoop.

The goings on down under are not getting that much play in the press outside of Oz. But, Babcock & Brown, Australia's second-largest investment bank has just gone under.

Everyone is talking about marking to market as if its elimination is a silver bullet. So far as the economics goes, I am not sure that mark to market is such a big deal. The whole point of the banks is to make loans and hold them. Look at…

By now you have heard that Warren Buffett's bets on GE, Goldman, and Swiss Re and his derivatives positions have earned him a downgrade from Fitch Rating Agency. Below is the Fitch statement. I have highlighted the key sections.

The FSA has been on the attack of late. First they warned bankers that heavy regulation was in the offing. Now they are directly accusing Gordon Brown, former Chancellor of the Exchequer and now Prime Minister, of aiding and abetting a…

Back in December when the Bernard Madoff scandal first hit, I wrote a post, Madoff as a signal to go for “regulation heavy,” suggesting that Madoff was emblematic of a reckless period in the United States, symbolized by the lax oversight of…