Wall Street & Markets

In my post Wednesday about asset-price bubbles and income inequality, I cited finance scholar Richard Roll’s 1987 discovery that economic data and news seemed to explain less than 40% of the stock market’s movements. I had totally forgotten about superquant David Leinweber‘s subsequent—and totally brilliant—discovery: that butter …

The FT’s John Gapper thinks it would be a big mistake for Treasury to allow Goldman Sachs to pay its way out of the strictures of the Troubled Asset Relief Program. He writes:

[W]e now know unambiguously that Goldman is a “systemically important financial firm”. In other words, Goldman is too big to fail and would be bailed out by

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My new column is about the thrilling rebirth of the special drawing right, the currency of the International Monetary Fund. Need I say more?

One expert on the subject who was very helpful, but didn’t make it into the column, was C. Fred Bergsten, director of the Peterson Institute for International Economics. Bergsten was extolling the …

TIME’s Massimo Calabresi has a really interesting little piece about the spectacular lack of interest in the latest round of Term Asset-Backed Securities Loan Facility lending. TALF has $200 billion in potential funding. Last month it loaned $4.7 billion. This month, just $1.7 billion. Writes Massimo:

There are three possible reasons for

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The news, reported by Eric Dash in the NYT, that the stress tests of 19 big banks are almost all done and none of the 19 will be due for an immediate FDIC takeover as a result has been greeted in the financial blogosphere with all manner of hooting and moaning and groaning.

I get the mockery, but I also sort of don’t, given that it was …

Wells Fargo announced this morning that it made a lot of money in the first quarter—”approximately $3 billion.” As I wrote last month when Citi let slip that its January and February looked pretty good, this shouldn’t be all that big a surprise: Federal Reserve liquidity programs and FDIC guarantees have sharply lowered banks’ funding …

The WaPo’s Steven Pearlstein, reviewing Lloyd Blankfein’s big speech in D.C. yesterday, nails the two big blind spots that even an enlightened Wall Streeter like Blankfein can’t seem to rid himself of:

The most important is culture — in the case of Wall Street, a culture that not only tolerates but almost celebrates taking advantage of

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Jed Graham, who covers economic policy for Investor’s Business Daily, has been writing occasional how-to-fix-the-mortgage-market essays for RGE Monitor since last fall. His most recent (it’s about 10 days old, but who’s counting?) begins:

Treasury Secretary Timothy Geithner’s toxic asset plan is a brilliant, highly complex and very

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I like the reading suggestions I get from readers, so I clicked through on bryanfromhouston’s link to this piece by Glenn Greenwald. Greenwald made his name exposing the Bush administration’s disdain for the Constitution and the media’s lame coverage of the Bush administration, and apparently plans to stick with that theme for the rest …

TIME Asia’s Michael Schuman asks Is the Dollar Doomed?

His answer is basically: “Sure. Someday.” And he throws some cold water on the idea that the IMF’s special drawing rights could become the world’s new reserve currency:

And what would take the greenback’s place? Economists say that China’s suggestion of turning to SDRs might be

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The Dutch have had their own bonus brouhaha over the past few weeks, with bailed-out bank ING coming under fire for paying out 300 million euros in bonuses for 2008. It resulted in the bank’s chief executive asking his top 1,200 managers to give their bonuses back, and then a “gentleman’s agreement” (herenakkoord) between Finance …