So it turns out that Darren Gersh, Washington Bureau Chief for the Nightly Business Report, addressed the question of what we should call this financial crisis of ours way back in January. He even did some actual research on the subject. What a concept! Anyway, Gersh shared my concern that any name with “subprime” in [...]
It was with a sigh of relief that I read that Visa went through with its record-breaking IPO and started trading on the New York Stock Exchange today. Not because I have any money at stake, but because the column I wrote a couple of weeks ago would have looked pretty silly if the IPO [...]
New Delhi-based economist Ajay Shah has a fascinating column in India’s Business Standard (via Bayesian Heresy) in which he makes the case that the current financial troubles in the U.S. may bring a recession, but can’t really be called a crisis. I recommend reading the whole thing, but here are a couple of key passages: [...]
Okay, so we’re in a middle of a big crisis brought on, in part, by the failure of financial institutions to maintain large enough capital bases as insurance against the risks they’re taking. So now, in an effort to make the crisis go away, the Office of Federal Housing Enterprise Oversight announces this morning that [...]
So they went with 75 basis points (that’s three-quarters of a percentage point to you and me). Big, but slightly less than markets were expecting. Which would seem to mean that Bernanke & Co. are convinced that the economy really is in a recession now, but would prefer not to be seen as entirely doing [...]
Goldman and Lehman reported better-than-expected results this morning, stock markets opened on a decided upswing, and “the iTraxx Europe, which measures the cost of protecting 125 investment-grade credits against default, fell about 17 basis points to 143bp.” (No I don’t entirely know what that means either, but it sounds good.) Which means we probably don’t [...]
Paul Krugman writes: Justin Fox suggests that we learn from the way Sweden dealt with its financial crisis at the beginning of the 90s. I’m looking into it. What Justin doesn’t mention, however, is that (according to Reinhart and Rogoff [pdf!] ) the resolution of Sweden’s financial crisis imposed a fiscal burden — that is, [...]
With markets now closed for the day, you’d have to say the Fed’s frantic actions of the weekend–engineering the fire sale of Bear Stearns, cutting the discount rate and creating yet another “lending facility”–were successful. Stock markets didn’t collapse (Dow up slightly, S&P 500 and Nasdaq down), and, much more importantly, credit markets didn’t either. [...]
Bear Stearns’s share price went from $145 a year ago to $57 last week to $30 Friday to $3.82 this afternoon. That’s still $1.82 above the $2 a share JP Morgan Chase has offered to buy Bear (hope springs eternal, I guess), but it ain’t much. Now the FT’s Alphaville blog reports that “spurious” rumors [...]
See, I’m not the only one pushing the Swedish solution! From Merrill Lynch North American economist David Rosenberg’s Morning Call Notes today: The Japanese credit crisis is usually cited as the benchmark for what not to do. But few cite Sweden’s crisis as a template on what might actually work. … the Swedish authorities realized [...]
