MetaFilter posts tagged with economy and finance

Wall Street's Near Death Experience

SeizeTheDay — Tue, 06 Oct 2009 17:21:32 -0800

UK and USA might lose AAA rating

memebake — Tue, 26 May 2009 15:11:41 -0800

Standard & Poor’s changed the UK's credit outlook from stable to negative a few days ago, and warned that there is a chance the UK could lose its AAA rating. Meanwhile, Moodys, another of the big 3 rating agencies, has warned that the US might also eventually lose its AAA rating. The UK announcement caused sterling to drop by 1% and the FTSE by 2%. However, many blame the same rating agencies for their part in triggering the subprime crisis. The irony of this is not lost on the Wall Street Journal, who note that "After all, those governments are jacking up spending, in part, to bail out the financial firms who gobbled up those 'AAA' asset backed securities duly blessed by the credit ratings firms." How did the CDO's get AAA rated in the first place? There are reports that it may have been a bug in the rating software, although Greenspan says its because the ratings were based on only the last two decades, giving a too-optimistic outlook. This reseach paper by Vasiliki Skreta and Laura Veldkamp looks through some of the options. Incidentally, all the ratings given by the rating agencies come with a disclaimer: S&P says in small print: "Any user of the information contained herein should not rely on any credit rating or other opinion contained herein in making any investment decision". Joseph Mason, a former economist at the US Treasury Department, points out that "The ratings giveth and the disclaimer takes it away."

U.S. Becoming a Banana Republic?

Rafaelloello — Fri, 27 Mar 2009 18:20:31 -0800

In its depth and suddenness, the U.S. economic and financial crisis is shockingly reminiscent of moments we have recently seen in emerging markets (and only in emerging markets) says Simon Johnson, a professor of entrepreneurship at MIT’s Sloan School of Management, in the next issue of The Atlantic. He was previously Economic Counsellor and Director of the Research Department at the IMF from March 2007-August 2008. In each of those cases, global investors, afraid that the country or its financial sector wouldn’t be able to pay off mountainous debt, suddenly stopped lending. And in each case, that fear became self-fulfilling, as banks that couldn’t roll over their debt did, in fact, become unable to pay. This is precisely what drove Lehman Brothers into bankruptcy on September 15, causing all sources of funding to the U.S. financial sector to dry up overnight. Just as in emerging-market crises, the weakness in the banking system has quickly rippled out into the rest of the economy, causing a severe economic contraction and hardship for millions of people.

What the FEC couldn't figure out

shii — Fri, 20 Mar 2009 23:16:04 -0800

Matt Taibbifilter: Among other things, the GAO report noted that the entire OTS had only one insurance specialist on staff — and this despite the fact that it was the primary regulator for the world's largest insurer! This week's MeFi stories have generally failed to explain the reasoning that caused the recession, even though Jon Stewart was basically on the mark. Now, Rolling Stone's only reporter lays it all out The Big Takeover, a typical combination of zealous snark and the overlooked, damning facts needed to clear up a ridiculously complicated story.

Wall Street on the Tundra

shii — Wed, 04 Mar 2009 18:41:55 -0800

"Iceland is no longer a country. It is a hedge fund." Also: exploding Range Rovers and the environmental impacts on elves. (Pre-vi-ous-ly.)

Religious takes on the global financial crisis

desjardins — Wed, 14 Jan 2009 15:04:30 -0800

The Dalai Lama blames the financial crisis on a decline in spirituality. Hindus blame it on greed. Saudi Grand Mufti, Abdul Aziz al-Sheikh, blames the crisis on ignoring God's rules. Jewish scholars say we could have avoided a crisis by following Talmudic traditions. Pope Benedict sees the global financial system as "self-centred, short-sighted and lacking in concern for the destitute." Is it right to pray for the economy? (a Christian perspective). A Malaysian conference brings together Buddhists, Christians, Muslims, Hindus, Taoists, and Sikhs to discuss the crisis.

If Admiral Ackbar had dyslexia, he'd say...

Asparagirl — Mon, 29 Dec 2008 13:05:22 -0800

TARP, SSFIP, EESA, CPP, TALF, MMIFF... Are you feeling overwhelmed by all the new acronyms coming out of the US Treasury Department lately? Here's a handy PDF reference guide to untangling the US government efforts to rescue banks, financial corporations, and other companies.

Tanta Vive!

mullacc — Mon, 01 Dec 2008 15:12:53 -0800

The Compleat ÜberNerd: a fascinating series of blog entries detailing the nitty-gritty behind the mortgage industry by Calculated Risk's "Tanta." If you're curious about automated underwriting systems or the ins and outs of mortgage servicing or if you just enjoy some Mortgage Pig Excel art, Tanta was the blogger for you. Tanta, otherwise known as Doris Dungey, passed away on Sunday morning (NYT obit, CR obit).

AAA?

Gyan — Mon, 24 Nov 2008 06:47:35 -0800

Anatomy of a Meltdown - Ben Bernanke and the financial crisis (in one page)

Letter From Iceland

jason's_planet — Sat, 15 Nov 2008 10:50:00 -0800

Letter from Iceland. There you see the Iceland of today – the victim of an economic 9/11 and one of the very few places in the world where the words “financial meltdown” can be used without fear of exaggeration. From the article: We live now in a foreign-currency lockdown, and although the government has assured everyone that there are sufficient reserves to buy essentials such as oil, grain and medical supplies for the winter, such assurances only serve to create a further sense of unease in a people who have learnt to take such commodities for granted.

sovereign risk and the current economy

bystander — Mon, 03 Nov 2008 04:37:30 -0800

Another economic post. With the debt and equity markets in a comparative calm, a lot of people are asking what next? One area little examined is the idea of sovereign risk. Basically, those with the armies make to rules, and you don't want to be invested there when they change the rules,. The USA has been the power behind globalisation for over half a century, enforcing the rules of the marketplace we have grown to accept. Some are questioning whether it can maintain this position. Many countries have used their power to set the law to default on external debt, or in some cases, nationalise external investments. It is the last resort when your economy is in trouble, and a growing number of people see it on the cards for the USA (admittedly, with not much credibility). But who will be next?

Waking from "‘the deep slumber of a decided opinion"

Abiezer — Sat, 25 Oct 2008 14:39:13 -0800

Financial Regime Change? Robert Wade, professor of political economy and development at the London School of Economics, "argues that we are exiting the neoliberal paradigm that has held sway since the 1980s" and considers the "causes and repercussions of the crisis, and errors of the model that brought it to fruition." Prof. Wade was making similar predictions last year.

R.I.P Good Times

mojohand — Sun, 12 Oct 2008 07:53:30 -0800

Sequoia Capital presentation on the bleak scenarios for the economy and how start-ups should prepare. Last week the famous (the firm funded Apple, Oracle, Cisco and Google, among others) venture capital firm Sequoia Capital held a meeting for the firm’s portfolio companies. There, partners presented their views on what went wrong with the economy, what the prospects are for a quick recovery (Hint: the presentation is called 'R.I.P. Good Times' ) and what startups can do to survive. Here are the PowerPoint slides used in their presentation. I suggest a stiff drink before viewing. VIA Two points: (1) What's striking this the banality of the analysis. I could have put most of this together, and I'm an ad salesman with a liberal arts degree. Which leads me to point (2) this is just some guys' opinions. Sequoia has no lock on accurate forecating

RTC II

uaudio — Thu, 18 Sep 2008 13:04:56 -0800

Banning short selling? Firing Chris Cox? Treasury Secretary Paulson has reportedly floated the idea of an 80s-style "Resolution Trust Corporation." Maybe we're finally turning the corner...or at least stopping the hemorrhaging.

Oh, the humanity!

Skeptic — Thu, 24 Jan 2008 02:57:20 -0800

HorribleEconomicNewsFilter: Rogue trader costs his bank 7 billion dollar. Take that, Nick Leeson!

We must pay attention to bubbles

languagehat — Sun, 03 Aug 2003 12:20:50 -0800

Argentina Didn't Fall on Its Own. (Single-page, printer-friendly version here.) I don't normally read long articles on economic subjects, but this one is riveting, because it links Argentina's collapse to larger issues of how the world of money works today.

"The time has come to do our mea culpa," Hans-Joerg Rudloff, chairman of the executive committee at Barclays Capital, said at a conference of bank and brokerage executives in London a few months ago. "Argentina obviously stands as much as Enron" in showing that "things have been done and said by our industry which were realized at the time to be wrong, to be self-serving."

...It is like "a bizarre AA program in which you remove booze from the homes of people who are reducing the amount they drink and put it into the homes of people who are drinking more every day," Pettis said. "This is probably not the best way to reduce drunkenness."

Could he be right yet again?

muppetboy — Thu, 13 Feb 2003 11:47:35 -0800

Could he be right yet again? : Interview with Bob Prechter (and another one) If he is, we're all in for a world of hurt. In this three part interview, Elliott Wave International president Robert Prechter discusses his new book, “Conquer The Crash: How To Survive and Prosper in a Deflationary Depression.” During the 1980s, Bob Prechter won numerous awards for market timing as well as the United States Trading Championship, culminating in Financial News Network (now CNBC) granting him the title, "Guru of the Decade." In 1990-1991, he was elected and served as president of the nation-al Market Technicians Association in its 21st year. He has also published a seminal book on Elliott wave analysis titled, “Elliott Wave Principle – Key To Market Behavior,” three books on the major practitioners of wave analysis, and books on his own views in Prechter's Perspective and At the Crest of the Tidal Wave.

Macboy — Tue, 22 Oct 2002 19:56:51 -0800

Post a great earnings quarter then cut jobs and send them to India. Nice job Bank of AMERICA

dopamine — Sun, 11 Aug 2002 22:12:03 -0800

US Airways Bankrupt. It had to happen to one of the big airlines eventually, what with 9/11 and the hesitancy to fly following. But on top of everything else financially as of late... it just deepens that already sick feeling. Who's next?

semmi — Sat, 06 Jul 2002 22:19:38 -0800

"Nobel Prize-winning economist Joseph Stiglitz talks about the corporate looting spree and Bush's woeful mismanagement of the economy." "The fiscal mismanagement of the current administration -- leading to a change in the fiscal position of the United States over the past year -- is absolutely phenomenal; going from huge surpluses to huge deficits and the deficits are probably going to be larger than people anticipated."

electro — Mon, 24 Jun 2002 12:47:18 -0800

High Finance Run Amok [latimes free reg req] is a Kevin Phillips editorial on the "financialization" of the US economy. "As the financial sector, in short, became too important to fail, the Fed and the Treasury abandoned market economics to embrace socialization of credit risk. No other sector of the U.S. economy, save possibly defense, received such governmental assistance."

bjgeiger — Sat, 22 Sep 2001 11:02:16 -0800

CEOs Slash Jobs, but Not Their Pay Too many cheifs and not enough indians. An article I found interesting.

jbou — Fri, 21 Sep 2001 12:34:17 -0800

Will the rich be nicer to the poor? The way the stockmarket keeps plunging the rich might be asking the rest of us how to survive.

aaron — Thu, 01 Mar 2001 22:07:35 -0800

The House has passed the bankruptcy reform bill that Clinton vetoed at the end of the last session. I'm mildly optimistic that it won't pass the Senate, given that the Democratic vote in the House was split. But should we be worried at all? At first glance, it doesn't seem like a bad idea. But so many consumer groups are against it, and it seems to benefit credit card companies while hurting individuals, so I'm inclined to think we should leave things as-is. Especially since personal bankruptcies are down and credit card issuers' profits are up. Anyone know more about this?