“US consumer sentiment is at its worst for more than three decades, suggesting that a destructive argument about the debt ceiling, a ratings downgrade from Standard & Poor’s and a plunge in the stock market are feeding back into an economic slowdown.” Read the full story at the Financial Times
“A partial ban on short selling in the eurozone boosted European bank shares on Friday, but led to confusion among market participants unclear about how the rules would be applied.” Read the full story at the Financial Times
“Fuming traders and marketmakers have scrambled to cover short positions and rejig their trading platforms after a late-night announcement that four European countries were banning short selling of financial stocks.” Read the full story at the Financial Times
“One of the most volatile weeks in market history sparked a bigger flight to safety than the collapse of Lehman Brothers as global investors parked a record $50bn in money market funds this week, yanking money out of bonds and shares.” Read the full story at The Financial Times
“On Thursday, attorneys general in Virginia and Florida filed civil suits against BNY Mellon alleging that the bank cheated pension funds in those states by choosing improper prices for currency trades the bank processed for the funds. The Virginia lawsuit, filed in a Fairfax, Va., state court, cites internal bank emails allegedly showing that senior […]
A European market regulator announced Thursday night that short-selling of stocks in several countries would be temporarily banned in an effort to stop the tailspin in the markets. Read the full story at The New York Times
The Securities and Exchange Commission has asked credit rating agency Standard & Poor’s to disclose who within its ranks knew of its decision to downgrade US debt before it was announced last week, as part of a preliminary look into potential insider trading, people familiar with the matter say. Read the full story at The Financial […]
The real issue around Bank of America is not whether it survives, but whether it sacrifices Countrywide to save itself. More specifically, will Bank of America put Countrywide into bankruptcy? And will this stem the bleeding? Read the full story at The New York Times
Financial companies and their critics will get another chance to comment on the criteria U.S. regulators will use to decide which large firms are so risky as to need stricter policing. In a letter to a top House Republican Wednesday, a Treasury official assured the lawmaker that the updated guidance, when it’s finished, will be […]
“The American right today is obsessed with cutting government spending. In many ways, Mr. Cameron’s austerity program is the Tea Party’s dream come true. But Britain is now grappling with the consequences of those cuts, which have led to the neglect and exclusion of many vulnerable, disaffected young people who are acting out violently and […]
Bank of Ireland PLC, the only Irish lender to escape effective nationalization amid the nation’s deep debt crisis, posted a sharply reduced first-half loss and said it had further evidence that its loan losses had peaked. Read the full article at the Wall Street Journal
“Holders of more than $3 billion in debt issued by Jefferson County, Ala., are about $100 million away from a deal to avert the biggest municipal bankruptcy-protection filing in U.S. history. But there is a hitch: As a Friday deadline looms, debt-restructuring talks have been snarled by the deal’s potential impact on poor residents, people […]
“The past week’s market meltdown is confirming what many business leaders and consumers were already thinking—that the economy is close to tilting back into recession and therefore they need to cling to every penny.” Read the full story at the Wall Street Journal
“Bismarck compared the world economy to a train that follows a consistent and steady path — and then suddenly rushes forward with irresistible force. This is an apt description of the onrush of globalization. And guiding your way out of a crash threatened by irresistible force requires leadership of unsurpassable resolve.” Read the full story […]
Ben Bernanke’s decision to open the door to easier monetary policy Tuesday marked another watershed moment in his 5½-year odyssey as chairman of the Federal Reserve. This time, it wasn’t just the policy that raised eyebrows, but also the manner in which it was decided. Read the full story at The Wall Street Journal
“It was impossible this week not to feel the same dread and helplessness that plagued the fall of 2008 as bank stocks slid into terrifying territory and spreads on credit-default swaps jumped. In part that’s because three years after the financial meltdown, very few of the rules governing finance have changed despite last summer’s enactment […]
Federal Reserve officials are drawing up rules for the largest U.S. banks that won’t be more stringent than global capital standards agreed to in Basel, Switzerland, according to a person familiar with the discussions. Federal Reserve Governor Daniel Tarullo cited a “goal of congruence” between the Basel standards and the Fed’s work on rules under the Dodd-Frank […]
“In early 2010, top officials at the Federal Reserve began to wonder: how would United States banks hold up through the European debt crisis? Investors were fleeing Greece and Ireland, and starting to get nervous about Portugal and Spain, spreading contagion. The conclusion from the stress tests that resulted was heartening to supervisors at the […]
The Securities and Exchange sued Stifel, Nicolaus & Company on Wednesday, accusing the Midwestern brokerage firm of duping five Wisconsin school districts into buying $200 million in dubious investments. The firm in 2006 sold the school districts “unsuitable” securities tied to synthetic collaterized debt obligations that were “far more risky” than advertised and mostly purchased with borrowed […]
“The Goldman Sachs Group was sued on Tuesday by the National Credit Union Administration over claims that the bank violated federal and state laws in the sale of mortgage-backed securities to corporate credit unions that subsequently failed.” Read the full story at the New York Times
“The Federal Reserve made a rare promise on Tuesday to hold short-term interest rates near zero through at least the middle of 2013, in a sign that it has all but written off the chances of an expansion strong enough to drive up wages and prices.” Read the full story at the New York Times
“Wells Fargo & Co. is the winning bidder for Bank of Ireland’s $1.4 billion U.S. commercial-real-estate loan portfolio, according to people familiar with the matter, marking the latest sale of U.S. real-estate debt by a troubled Irish bank.” Read the full article at the Wall Street Journal
“Criticism of the industry’s dominance heightened following S&P’s downgrade, especially after the company went ahead with the downgrade after U.S. officials said they noticed a $2 trillion error in S&P’s calculations.” Read the full article at the Wall Street Journal
“The Obama administration will announce plans Wednesday to seek investors’ ideas for turning thousands of foreclosed properties owned by government-backed entities into rental homes, according to administration officials.” Read the full story at The Wall Street Journal
“Nearly three years after the government infused the banking industry with hundreds of billions of taxpayer dollars, many large banks continue to struggle with the fallout of the housing bust.” Read the full story at the Washington Post
WASHINGTON — Standard & Poor’s downgrade of U.S. debt last week is likely to hasten the replacement of credit ratings within bank regulatory requirements. The Dodd-Frank Act enacted last year required the banking agencies to remove all references to credit ratings within existing rules, but the regulators have dragged their feet on carrying out that […]
Moody’s Corp. and the parent company of Standard & Poor’s have spent increasingly more money to lobby the U.S. government in recent years, data from a money-in-politics research group show, and political contributions from individuals connected to both companies are heavily tilted toward Democrats. Read the full story at Marketwatch
Goldman Sachs Inc. said U.S. securities regulators are investigating whether the securities firm broke bribery laws. Tuesday’s disclosure by Goldman of numerous investigations, regulatory reviews and legal action related to its sprawling businesses included a probe of the company’s “compliance with the U.S. Foreign Corrupt Practices Act,” according to a securities filing. Read the full […]
Standard & Poor’s, whose unprecedented downgrade of U.S. debt triggered a worldwide stocks sell-off, is pushing back against a U.S. government proposal that would require credit raters to disclose “significant errors” in how they calculate their ratings. S&P, which was accused by the Obama administration of making an error in its calculations leading to Friday’s […]
“The Commodity Futures Trading Commission is moving ahead with plans to radically alter the way margin collateral for cleared OTC swaps contracts is protected in the event of a default by a clearing member or one of its customers.” Read the full story here
“You have to love the Financial Times’ Lex column, which has this item today and begins thus: “Caveat emptor. But which emptor?” It also makes the unassailable observation that “A truth and justice commission might be able to allocate blame but lawsuits are unlikely to,” although the odds of such a commission are less than […]
“At the root of today’s credibility deficit is a failure to come to grips with the long, slow growth period that is typical of post-financial crisis recovery,” says Ken Rogoff. Read the full story at the Financial Times
“There is a difference between the amount of equity a bank needs to run its business and the amount it needs to maintain market confidence.” While this observation was made about Bank of America, every bank, banker and regulator should take it to heart. Read the full story at The Wall Street Journal
“‘Most of the world’s largest economies are heading for a period of slower growth, and it is increasingly likely that the U.S. will share that fate,’ according to the OECD.” Read the full story at the Wall Street Journal
“Fears about the health of the U.S. banking system are back in a big way. Bank stocks plunged 11% Monday in their biggest one-day drop since April 2009, as investors questioned how well giant financial firms will weather a slowing economy and tumultuous markets after an unprecedented downgrade of U.S. debt.” Read the full story […]
The Senate Banking Committee has started gathering information for what could become a hearing on the ratings agency Standard & Poor’s, a committee aide said Monday. S&P downgraded America’s sparkling credit rating on Friday. S&P spokesman David Wargin declined to comment. Read the full story at Politico
Discussion of recessions, business cycles, and what is happening now as laid out in Rogoff and Reinhart’s book, with Rogoff quoted as saying “The whole mentality of thinking of this as a recession leads to bad forecasts and bad policy. It’s just not the right framework.” Read the full story at the Washington Post
“AIG Financial Products, the little-known unit that set off a panic on Wall Street and came to symbolize the recklessness and greed behind the financial crisis, died this week. It was 24.” Washington Post
While each graph is worth a thousand words, the lead paragraph says it all: “This is a remarkable sequence of pictures from Calculated Risk showing that no major economic indicator has returned to its pre-crisis level. In other words, after two years of recovery, not a single key broad measure of the economy has actually […]
“The extraordinary actions taken to prevent the financial meltdown from becoming a Second Great Depression are going to limit what governments can do to ameliorate a second recession if it happens.” Read the full story at the New York Times
“SOME of our Congressional leaders, especially in the Republican Party, seem to want the federal government to cease operations. After all, their brinkmanship over the raising of the debt ceiling suggests that they don’t really care whether anything ever gets done in Washington.” Read the full story here: Former Chairman of SEC, Arthur Levitt Jr., […]
“As the political temperature rises over executive pay, it has become more important for large quoted companies to be able to show that however rich the rewards available to their chief executives, they are paid only on the basis of stellar corporate results. Yet a new study suggests that FTSE 100 companies are not a very […]
“The first half of 2011 showed a slowdown of growth – if not outright contraction – in most advanced economies. Optimists said this was a temporary soft patch. This delusion has been dashed. Even before last week’s panic, the US and other advanced economies were odds-on for a second severe recession. America’s recent data have […]
“The decision by the European Central Bank to intervene in the bond markets to buy Italian and Spanish government debt is likely to prove hugely controversial – both inside the eurozone’s chief monetary guardian. Although markets are likely to welcome the action, investors caution that it must be done in sufficient size to remove any doubts […]
Kathleen Casey, a commissioner of the US Securities and Exchange Commission, has said she will depart the agency, even though her replacement has not been confirmed. Ms Casey, a Republican on the five-member commission that governs the agency, was known to be retiring and her term expired on June 5. Read the full story at The […]
U.S. regulators, intensifying their probe of last year’s “flash crash” and other market swings, have sent subpoenas to firms that do high-frequency trading, according to people familiar with the matter. The Wall Street Journal http://online.wsj.com/article/SB10001424053111904480904576494573110465278.html?KEYWORDS=JEAN+EAGLESHAM
Mortgage markets in the U.S., which remain on government life support, could be rattled by the downgrade of the U.S. credit rating, potentially raising borrowing costs for consumers. Given the “sufficiently perilous” state of the U.S. mortgage market, a downgrade “can do nothing but harm the market,” says Karen Shaw Petrou, managing partner of Federal […]
Standard & Poor’s decision to yank away the U.S. government’s vaunted triple-A rating is a vivid reminder of the bond-rating industry’s power even after setbacks in recent years. Read the full article at the Wall Street Journal
Treasury Secretary Timothy F. Geithner has told President Obama he plans to remain in his job through the fall of 2012, keeping in place Obama’s longest-serving economic adviser after the first-ever U.S. credit downgrade and renewed fears of a second recession. Geithner, who has been battling financial crises since 2007 as a top Federal Reserve […]
IT was a blustery day in Washington on Jan. 20, 2009, as it often seems to be on the day of a presidential inauguration. As I stood with my 8-year-old daughter, watching the president deliver his inaugural address, I had a feeling of unease. It wasn’t just that the man who could be so eloquent […]
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