Housing Tornado Warnings Were an Exercise in Futility
> There is a absurd yet fascinating article in the Sunday Times by Gretchen Morgenson, titled A Mortgage Tornado Warning, Unheeded. It is is stirring and emotional. What makes it fascinating is yet another story told about prescient warnings in advance not heeded about the coming mortgage crisis. What makes it absurd is its complete...
Word of the Day: “Zombie Debtor”
zombie debtor: n. An indebted consumer who is only able to pay the debt interest each month. Example Citations: “There’s a new term being coined for payday borrowers who are able only to pay the interest on their loans — zombie debtors — so that the principal debt just rolls on, and while there’s talk...
Another Bad Bank/Housing Deal Coming Our Way
The latest trial balloon in the robosigning fraud cases is being pushed by Housing Secretary Shaun Donovan. It is as foolish and reckless as the mortgages underlying the crisis in the first place. The terms which have been floated look something like this: • $25 billion “fine” • Up to another $17 billion used to...
Government Debt – How Much Is Too Much?
Government Debt – How Much Is Too Much? Satyajit Das January 23, 2012 Economists and policy makers like simple nostrums. Popularised by Economists Carmen Reinhart and Kenneth Rogoff, the unsustainability of a sovereign debt level above 60-90% of a country’s Gross Domestic Product (“GDP”) has become accepted wisdom. But government or corporate debt rarely ever...
Debt Doesn’t Matter ?
Huge chart from Steven Rattner’s Sunday NYT Week in Review Op Ed: > click for ginormous graphic: > Source: The Dangerous Notion That Debt Doesn’t Matter STEVEN RATTNER NYC, January 20, 2012 http://www.nytimes.com/2012/01/22/opinion/sunday/the-dangerous-notion-that-debt-doesnt-matter.html
Cycles of Financial Crises 1810 to 2010
History Shots has a cool new graphic poster for sale looking at the long history of Financial Crises. I can easily see this framed on my office wall: > Click to zoom into graphic: Source: History Shots > Cycles of Financial Crises 1810 to 2010 Size: 36 x 18 inches Price: $32.95
Residential Write Downs, Starts, Remodels
There have been some interesting buzz regarding the residential real estate market. I want to put some of it into a broader context. Yes, the usual bottom callers are out yet again, unrepentant and shameless after getting it wrong for 5 consecutive years. Residential Write Downs: This is resurfacing for the umpteenth time. Today’s version...
Chronology of the Greek Debt Crisis
Edward Harrison is the founder of the finance site Credit Writedowns and a former career diplomat, credit guy and technology executive. Ed just started the subscription newsletter Credit Writedowns Pro this year focusing on global macro investing ideas as well as outcomes from the global financial crisis and the European sovereign debt crisis. Pre-sovereign debt...
A Kazakh bank falls from grace
RTRS-KAZAKH BANK BTA IN OFFICIAL DEFAULT ON $2 BLN 2018 BOND AS JAN.3 COUPON FUNDS NOT RECEIVED-CREDITORS CITE EUROCLEARJanuary 17 marked the end of the grace period for BTA’s...
Germans try to rescue the negotiations with Greek private sector bondholders
China’s forex reserves declined for the 1st time in more than 10 years. Forex reserves as at 31st December fell to US$3.18tr, from US$3.2tr on 30th September. Further declines are likely. The PBoC warned of the likelihood of large capital withdrawals this year. Previous speculative inflows are likely to become outflows, which will slow down...
Building a Troubled Titan
Great graphic in WSJ about the history of Bank of America: > click for larger graphic > I have no position in any money center banks — as long as their books are opaque (thanks to FASB 157), they violate the “know what you own” rule, making it difficult to place them into long term...
QOTD: Who Is Being Rescued
Never forget exactly who is being rescued by Central Bank/Political bailouts! Here’s a hint: It ain’t you or me: “…it is important to remember that the attempt to rescue distressed European debt by imposing heavy austerity on European people is largely driven by the desire to rescue bank bondholders from losses. Had banks not taken...
