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Browsing Category
Monetary System
Additions to Credit Crisis Timeline
Latest Additions2008 05 26 UBS Falls After Saying More Mortgage Losses Possible2008 05 27 Banks, Brokers Cut 83,000 Jobs as Subprime Losses Mount: Table2008 05 28 Ambac shares hit record low after new disclosure2008 05 28 KeyCorp Slide…
National City is on probation
The bad news in the financial sector keeps coming. Today, the news is about National City, a Cleveland-based regional bank in the US. The Wall Street Journal reports that the Office of the Comptroller of the Currency (OCC) has put Nat…
MBIA, Ambac, $1 Trillion of Debt, Lose S&P AAA Rating
From Bloomberg News in it's entirety. This is a HUGE story. This means that Ambac and MBIA will go bust, no doubt. And there will be significant writedowns in Q2 and Q3. Expect to see a major financial institution fail (one that's…
Caroline Baum: Greenspan, `Master of Garblements’
Caroline Baum, one of the best financial reporters out there, has a new column today about the Fed. I recommend it highly. The article is about a new book by Robert Auerbach, Professor at the University of Texas, Austin called "Deception…
$5 trillion to go on balance sheets again?
Mish over at the Global Economic Trend Analysis caught a story in the FT about the possibility of banks being forced to put $5 trillion back on their balance sheets.The FT article says:Accounting changes could force U.S. banks to take…
De-leveraging redux
Yesterday, in a post entitled "De-leveraging," I argued that credit writedowns and the resulting deleveraging are highly deflationary. This is the core of the problem with the global financial system. I want to expand a bit on that…
Is Lehman the next Bear Stearns?
The Globe & Mail is reporting that Lehman Brothers might have to go back to the capital raising trough again in order to shore up a leveraged and risky balance sheet. In the face of yesterday's credit downgrade by S&P, this sounds…
What’s a central bank to do?
Global financial institutions are deleveraging because they can't build enough equity capital any other way except by going to Asian and Middle Eastern sovereign wealth funds, cap in hand. So, the Fed and the Bank of England (BoE) have…
De-leveraging
The term deleveraging is one bandied about a lot in the press recently. But, what does it actually mean? De-leveraging is the process by which financial institutions and investors reduce the relative size of their assets to equity ratio.…
S&P cuts ratings of big U.S. banks
This just in from the Globe & Mail via Reuters:Standard & Poor's in a sweeping move Monday that rocked markets cut ratings on a number of major U.S. securities firms including Lehman Brothers Inc. and said outlooks on the large U.S.…