Monetary System

I have had a number of posts on mark-to-market accounting in the recent past.  Most recently, the posts have suggested that accounting is going to be favourable to banks and their quest to present a well-capitalized face to the world (see…

On the face of it, Nationwide’s earnings report looks extremely good: 15% Tier 1 Capital, Pre-tax profit of nearly £400 million.  Given this financial institution’s leverage to the residential housing market, their results stand in…

Earlier today I posted an article about how accounting was favourable to banks in that it could help them weather the storm and appear well-capitalized until a recovery is underway.  Afterwards, a buoyant economy would increase…

I received a high-quality note from Marc Chandler, Chief Currency Strategist at Brown Brothers Harriman, which I think worthy of posting.  He makes several points which are game changers regarding fiscal and monetary policy.  They…

The following Bloomberg article points out why I have repeatedly argued that banks will be earning a lot of money, Meredith Whitney’s counter-arguments notwithstanding. It also points out why the likes of John Hempton believe that the FDIC…

Kyle, a long-time reader, recently asked why I think mark-to-market accounting actually matters.  After alI, savvy investors know that accounting does not necessarily change cash flows.  I think his question has a lot to do with not just…

A recent post I published on both Credit Writedowns and Naked Capitalism, “Both initial claims and continuing claims now pointing to recovery,” has left the impression that I am a wild-eyed bull – for which I have been duly smacked about…

Strategic Capital and Morton Community Bank were seized by the FDIC tonight.  Below are the FDIC announcements on the matter. The FDIC estimates a cost to taxpayers of $173 million (nearly 30% of assets) for Strategic Capital and $106…

This e-mail came to my inbox from the FDIC last night: The Federal Deposit Insurance Corporation (FDIC) announced today the approval of GMAC Financial Services to participate in the Temporary Liquidity Guarantee Program (TLGP) allowing…

I was heading to dinner with Marshall Auerback when the news of the BankUnited bust came into my inbox. I see this as fairly big new for what it represents. We are witnessing a sea change in how FDIC seizures are done here with private…