Credit Writedowns

Bill Moyers talks to former Citicorp and Citigroup head John Reed about what's wrong in the banking sector. John Reed readily acknowledges his role in bringing down the Glass-Steagall Act (Hat tip finance Addict).

Fannie and Freddie have already been nationalized and the government is already on the hook for hundreds of billions of dollars of losses as a result. Clearly, this makes it a lot easier to use the GSEs as vehicles to pump money into the…

I was thinking about that last post I wrote on the euro zone and regulatory forbearance. They say a picture is worth a thousand words. So here's a picture that captures my thinking pretty well.

Even if the private sector participation sufficiently high, will it be enough to put Greece's debt on a sustainable path? This seems unlikely and there is increasing risk that the ECB forgoes getting anything but its initial investment…

Clearly, economic policy is now far more complex than it appeared to be before the GFC. As we enter this Age of Deleveraging, the worst thing we can do is apply policies that appeared to work during the preceding Age of Leverage—but were in…

A quote from Former Federal Reserve Chairman Alan Greenspan, who centrally controlled and underpriced the most over-leveraged interest rate in the world for 18 years and is now cashing in like a reality TV celebrity

The Institute for Supply Management reports its January manufacturing survey on February 1. The Bloomberg consensus expects a small increase to 54.5 from 53.9.

This is me thinking out loud about how regulatory forbearance in the S&L crisis mirrors today's policy path.

News links for 1 Feb 2012

The headline story in the Financial Times today is that "Banks set to double crisis loans from the ECB". The report says that "several" large banks from the euro zone told the FT that they "could double or triple" their takes at the LTRO.