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What is a credit writedown?
A credit writedown is a reduction in the value of an asset as it is carried on a company's balance sheet. As these losses must also be reflected on the income statement, credit writedowns result in massive losses.
America’s decline will not be easily reversed
This commentary in the Financial Times from Byron Wien, the former Morgan Stanley guru, is spot on. Everyone making a decision to vote for President in the U.S. should heed Wien's word before pulling that lever.America’s decline will not…
Quote of the day: trickier than LTCM
On Friday, Bloomberg quoted a former LTCM partner as saying the $1.9 trillion hedge fund industry faces "much worse'' conditions than in 1998, when Long-Term Capital Management LP collapsed. "It's definitely a trickier…
The inflation – deflation debate redux
I'm getting a lot of mail about the Rosenberg post and my mea culpa on inflation. To be blunt, a lot of you think I'm out to lunch and Rosenberg is too -- after all inflation is over 5% and that's just the bogus CPI measure our governments…
Writedowns hit $500 billion
After RBS's writedowns on Friday, Bloomberg estimated that we have had nearly $500 billion in writedowns in the so-called 'sub-prime' crisis to date.Barclays, Britain's third-biggest bank, had first-half writedowns of 2.8 billion pounds, it…
I was wrong on inflation
For much of the past year I have been a critic of the Fed for keeping rates in easy money territory. One major reason was that they were going to let the inflation genie out of the bottle and that was going to be a problem.
Now, I feel…
On Wall Street, ignorance is not bliss
Another blurb on David Rosenberg of Merrill Lynch, this time from the Globe & Mail in Canada where Rosenberg is from. This one is more about Merrill and its culture than Rosenberg. The paper points out the irony of Rosenberg being the…
One on One with David Rosenberg, Chief North American Economist at Merrill Lynch
This is a transcript from the Nightly Business Report interview with David Rosenberg last night. He has consistently been one of the best economic commentators on Wall Street during and after the bubble. His comments regarding…
The 3 a.m. moment – McCain blows it
Ben Smith has a good column on McCain's bellicose response to Russia's invasion of Georgia. Even George W. Bush has shown more statesmanship here.‘Invasion of Georgia’—a ‘3 a.m. moment’When the North Caucasus slid into war Thursday night,…
Chart of the day: low ARM rates
This chart from the New York Times demonstrates visually what happens when the Fed lowers interest rates too much: it skews simple economic decisions like what type of mortgage product to use, often with unintended consequences.
Similarly…