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 […]
AMID all the talk of debt and default in Washington last week, tiny Central Falls, R.I., went bankrupt. Joe Songer/The Birmingham News, via Associated Press “A protest of potential sewer rate increases in Jefferson County, Ala. One sign took aim at JPMorgan Chase, an adviser to the county on a bond deal. Like many states […]
The day after Standard & Poor’s took the unprecedented step of stripping the United States government of its top credit rating, the ratings agency offered a full-throated defense of its decision, calling the bitter stand-off between President Obama and Congress over raising the debt ceiling a “debacle.” It warned that further downgrades may lie ahead. […]
The frustration in the air was palpable. Officials from the credit ratings agency Standard & Poor’s were meeting with Congressional leaders on a stifling late day in late July to discuss the thorniest issue in Washington: the effort to cut the nation’s deficit and raise the borrowing limit to avert a default. Read the full […]
“Bank of America, the lender that announced a $3 billion settlement with Fannie Mae and Freddie Mac this year, told investors that elevated claims from the firms may cost more than previously forecast. New demands for refunds on soured loans from the mortgage companies, both government-sponsored enterprises (GSE), are coming “in numbers that were not expected […]
At the end of an ominous week for the global economy, Friday brought new signs that the world may not be ending after all — though even the good news came with asterisks. The United States managed modest job creation last month, the government reported. The unemployment rate even ticked down a notch, offering hope […]
“THESE are the worst of times for workers, and the best of times for companies. At least that is one way to read the newly revised national economic statistics.” Read the full story at the New York Times
“One of the greatest casualties of the great recession may well be a decade of lost children.” Read the full story at the New York Times
The U.S. economy added more jobs than expected in July and the unemployment rate edged down, a move that should help ease concerns that a new recession may be around the corner. Nonfarm payrolls rose by 117,000 last month as private-sector employers added 154,000 jobs, the Labor Department said Friday. Payroll data for the previous […]
Red ink continues to flow at Fannie Mae as the mortgage finance company struggles to digest a glut of defaulted mortgages and foreclosed properties. Fannie posted a net loss of $2.9 billion for the second quarter, up from a year-ago loss of $1.2 billion. The company has now reported losses in 15 of the last […]
“Talk of capitulation and a repeat of 2008 seem premature. Key market stress indicators are flashing amber rather than red. But that doesn’t mean the crisis isn’t critical; this time, sovereign-bond spreads may be the best warning signal of future trouble.” Read the full story at the Wall Street Journal
Wells Fargo & Co. reached a $590 million agreement to settle claims with investors in Wachovia securities, another piece of fallout from the fallen bank’s subprime-mortgage portfolio. Wachovia’s auditor at the time, KPMG LLP, will pay an additional $37 million to settle the suit, bringing the total settlement to $627 million. If approved by a […]
LONDON—Banks in Italy and other ailing European countries are encountering challenges securing affordable funding, but the troubles haven’t caused severe problems. Fearful about Europe’s crisis spinning out of control, an increasing number of investors and banks have been yanking funds from some euro-zone lenders, according to bank executives and industry analysts. Other traditional providers of […]
Against the odds, the derivatives-trading business that nearly brought down American International Group Inc. has turned into a profit center. The New York-based insurer’s once-struggling AIG Financial Products division has generated $4 billion in operating profits since the start of 2009 while unwinding the bulk of its derivatives trades, company executives said Friday. Its remaining […]
Federal criminal investigations of IndyMac Bancorp and New Century Financial Corp. have stalled and could result in no charges being filed, said people familiar with the situation. Separately, the U.S. Attorney’s office in Seattle announced Friday it had closed its investigation of Washington Mutual Inc., another failed mortgage lender, with no criminal charges being brought […]
“U.S. stocks fell the most in 32 months this week, erasing the Standard & Poor’s 500 Index’s 2011 advance, as investors fled equities amid signs that the economy is stalling. An early rally faded yesterday as concern grew that S&P would cut the American credit rating, speculation which proved to be true after financial markets […]
Standard & Poor’s removed the United States government from its list of risk-free borrowers for the first time on Friday night, a downgrade that is freighted with symbolic significance but carries few clear financial implications. Read the full story at The New York Times
Viewed from New York, the manner in which this eurozone story is playing out feels unnervingly similar to the pattern behind the American financial turmoil of late 2008…So will this now be followed, as it was in 2008, will a full-scale financial meltdown? Will panic spread when investors suddenly stumble on some overlooked interconnection risks? […]
“The ringfence to be put around Britain’s retail banking operations – the core recommendation of the government-appointed Vickers Commission – will be far stricter than many bankers had anticipated, according to people familiar with the report. Next mont’s final report by the Independent Commission on Banking, chaired by Sir John Vickers, will set the ringfence […]
Investors are going to the mattresses, or the market equivalent of it. As fears mount over sputtering growth and the continued fallout from Europe’s crisis, investors are moving heavily into cash. Read the full story at The Wall Street Journal
“The crisis must be bad: The European Central Bank has resumed its mothballed bond-buying program. After lying dormant for months, the ECB’s Securities Markets Program sputtered into life Thursday to buy Irish and Portuguese bonds, but not Italian and Spanish bonds, which lie at the eye of the current storm and whose yields actually rose. […]
“No country seems to want a rising currency—and that poses a problem for a world economy struggling with weakening prospects for growth in the world’s biggest developed nations.” Read the full story at The Wall Street Journal
The European Central Bank resumed a crisis-management role on Thursday, stepping in after a four-month pause to buy government bonds in response to a debt crisis that started nearly two years ago in Greece and now threatens to engulf Spain and Italy Read the full story at The Wall Street Journal
Before getting too excited about the modest uptick in net job creation and a slight downward move in the unemployment rate, it’s probably worth a look under the hood. Read the full story at CNBC
Bank of New York Mellon Corp. on Thursday took the extraordinary step of telling large clients it will charge them to hold cash. Read the full article at The Wall Street Journal
“The attention-grabbing event in the economy over the past week was Thursday’s 512.76-point plunge in the Dow Jones Industrial Average.” Read the full story at The Wall Street Journal
The New York attorney general is moving to block a proposed $8.5 billion settlement struck in June by Bank of New York Mellon and Bank of America over troubled loan pools issued by Countrywide. A lawsuit filed late Thursday accuses Bank of New York of fraud in its role as trustee overseeing the pools for […]
Wall Street has its hands full with the Volcker Rule, according to a new report by the consulting firm Deloitte. Read the full story at the New York Times
“Citigroup has staked out its ambitions to capture business flowing from sweeping reform of the over-the-counter markets by poaching 14 bankers – mostly from JPMorgan – as the bank relaunches its exchange-traded derivatives business. The move is a sign that even as some banks have shed thousands of jobs amid anaemic trading conditions, some are hiring […]
Dennis Kelleher, president and CEO of Better Markets, is featured on an segment on the process of Dodd-Frank rulemaking. Listen to the segment here
Michael Masters, Better Markets chairman, speaks on efforts to curb excessive speculation in commodity markets with Bloomberg TV.
A Senate panel approved President Obama’s nominee to join the Commodity Futures Trading Commission, Mark Wetjen, setting him up for a full Senate vote. Agriculture Committee Chairman Sen. Debbie Stabenow (D., Mich.) and 10 other senators from both parties voted to approve him in a voice vote, according to committee spokesman Ben Becker. Mr. Becker […]
“Capital One Financial Corp.’s purchase of ING Direct USA should be stopped as it would create another bank whose collapse may imperil the financial system, according to the National Community Reinvestment Coalition.” Read the full story at Bloomberg
Congressional Republicans plan to block President Barack Obama from appointing a director for the new U.S. consumer agency over the August congressional recess. A spokesman for Senate Minority Leader Mitch McConnell confirmed on Tuesday that the Senate would not fully recess for the August break. Instead, it would hold several “pro forma” sessions that prevent […]
Do the former directors of the institutions that collapsed during the financial crisis have anything to worry about? If the experience of Enron is any example, the answer is a resounding no. Read the full article at the New York Times (Dealbook)
Bank of America Corp. is having preliminary conversations about a home-foreclosure settlement that would reduce the amounts owed by some of its troubled borrowers in exchange for a broad release from legal claims against the lender, said people familiar with the talks. Read the full story at the Wall Street Journal
New York Attorney General Eric Schneiderman is poised to take the lead in inquiries by state officials into whether some banks properly charged state and local pension funds for thousands of currency transactions over the past decade. Read the full story at the Wall Street Journal
In the past few days, short-term credit markets, where big financial institutions turn to fund their day-to-day operations, showed signs of stress. Amid relief that the U.S. government will escape default, the strains on these markets eased a bit Tuesday but didn’t disappear. Read the full story at the Wall Street Journal
Americans stepped up saving in June and cut spending, in a broad retrenchment that is both a cause of the slowing economic recovery and a reaction to it. Read the full story at the Wall Street Journal
At last Washington has reached a deal that raises the debt limit and averts a default that would have been a national embarrassment and an economic and geopolitical catastrophe. The forces shaping the deal are multifaceted and so are reactions. Mine has a number of elements. Read the full story at The Washington Post
The Republican chairman of the House Financial Services Committee proposed restructuring the Securities and Exchange Commission on Tuesday, saying he wanted to make the agency more efficient and correct its “organizational incoherence.” “Without fundamental reform, there will never be any real improvement to the SEC’s operations,” Rep. Spencer Bachus (R-Ala.) said in a statement. Read […]
With the U.S. economy flatlining and at risk of falling into a new recession, the Federal Reserve lacks good tools to do much of anything about it — though that won’t necessarily stop the central bank from trying. Read the full story at The Washington Post
It comes as no surprise to find that Alan Greenspan is wrong. But with respect to his latest column, an attempted defense of laissez-faire regulatory policies and lower bank capital standards, it’s worth explaining in a little detail exactly why he’s wrong. Read the full story at Reuters
After playing a key role in creating the greatest economic disaster in three generations, you might have expected Alan Greenspan to lie low. But no, he’s out there issuing opinions, which for some reason still get listened to. Worse: he keeps calling for a return to the very regime he favored before, the regime that […]
Alan Greenspan’s article “Regulators must risk more to push growth” (July 27) involves false characterisations and inappropriate analogies. Therefore, it is misleading about capital requirements and their costs. If banks hold excessive liquid asset reserves, as Mr Greenspan asserts, this has little to do with capital regulation. The reserve levels are the result of banks’ […]
Michael Masters of Better Markets explains why the CFTC needs to take action against commodity speculators. Watch video here
“The Senate Agriculture Committee on Tuesday approved President Obama’s pick for the newest member of the Commodity Futures Trading Commission, an increasingly powerful agency at the center of the financial regulatory overhaul.” Read the full story here
“‘A senior Bank of England official has warned that leaving collateral demands free to fall in good economic times could leave the financial system at “a significant risk of systemic collapse’. International debate over the potential to regulate collateral demands, or ‘haircuts’ in banker parlance, is growing because of their role in exacerbating the boom and […]
“The U.S. manufacturing sector barely expanded in July, a sign that a onetime driver of the economy is waning along with the recovery. The news echoes other reports which show that after a long cycle of rebuilding inventories, factories here and overseas are curtailing production amid softer demand.The Institute for Supply Management’s manufacturing index—a survey […]
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