derivatives

This past week I have been particularly distracted by the political headlines in the run-up to the U.S. Presidential election, so I apologize if I have missed a few stories in the financial press.The writedowns do continue unabated and we…

Subscribe to my News Feed   Inequality in major U.S. cities rivals Africa: U.N. UNITED NATIONS (Reuters) - Major U.S. cities including New York, Washington, Atlanta and New Orleans have levels of economic inequality that rival…

Given the historic nature of the Lehman Brothers bankruptcy, it bears explaining how the credit default swaps market work and why it matters.

At this stage in the financial crisis, it is difficult to discern exactly where things are headed. However, let me give a general road map of how I see things shaping up.The credit crisis started in August 2007 as a result of the dual…

This comes via Credit Fixings. The auction process to settle Credit Default Swap trades on Lehman Brothers bonds put the value of the debt at 9.75 cents on the dollar. That is much lower than one would have expected (12 cents on the…

On the heels of weekend trouble at European banks, markets in Asia and Europe are selling off this morning. At the weekend, we learned that Hypo Real Estate, a finance behemoth in Germany with $700 billion in assets was feared to collapse.…

This morning Chris Whalen made some comments on CNBC that hit the nail on the head regarding the U.S. banking crisis: there is a huge wave of old-fashioned loan losses coming down the pike. The writedowns we have seen to date are largely…

The interesting thing about the Paulson proposal is that it gives the U.S. Treasury carte blanche to buy any of these toxic assets at any price it chooses. This is relevant because of mark to market rules in FAS 157. I have posted a few…

I named my blog "Credit Writedowns" because I anticipated an historic wave of credit writedowns in the global banking system which would lead to a wave of deleveraging, systemic risk, and bank failures -- in short, a massive financial and…

Marshall Auerback here.Equity investors, perhaps unlike credit investors, don't get the fundamental insolvency of the financial sector, an artifact of mega-leverage.This is a culture that responds to visual clues and marketing jingles.…