House Financial Services Committee Chairman Barney Frank
gave a bank, whose capital ratio equaled only 1.88% of assets at the bank, versus a desired level of about 6%, TARP money after heavy lobbying. Frank inserted into the bill a provision to give special consideration to banks that had less than $1 billion of assets, had been well-capitalized as of June 30, served low- and moderate-income areas, and had taken a capital hit in the federal seizure of Fannie Mae and Freddie Mac. (WSJ link) [more inside]
posted by SeizeTheDay
on Jan 22, 2009 -
Protests have rocked Reykjavík since Tuesday: Envious of Obama, Icelanders hurl yogurt and stage riots for new leaders
, Global financial crisis overwhelms tiny Iceland
, Flickr set of pictures of Tuesday's protest in front of parliament
(complete with pepper spray on camera lens
), AFP photos from Tuesday's protest
, video from protests 1
, Icelandic protesters pelt PM's car
(includes short video). New age of rebellion and riot stalks Europe
, The Icelandic "Facebook Revolution"
, Iceland is Burning part 1
& part 2
and Reuters factbox on Iceland and its economic crisis
posted by Kattullus
on Jan 22, 2009 -
In these difficult economic times, what's a museum to do? Is an art collection a financial asset or a trust to be held in perpetuity? These questions are being raised by The National Academy
in New York's recent sale (or "deaccessioning" in museum lingo) of two important paintings for $15 million to shore up its finances, first reported by Lee Rosenbaum's ArtsJournal blog.
The museum's director told The New York Times
that it was the only way for the 183-year-old academy, which runs a chronic operating deficit, to survive. The Association of Art Museum Directors censured the Academy
and called on its members to suspend any loans of art to the institution. New York lawyer Donn Zaretzky's ArtLaw Blog has
become ground zero for a fascinating debate involving art critics, museum directors, financial bloggers and others.
posted by up in the old hotel
on Jan 7, 2009 -
Every year the Strategy Team at Saxo Bank
, a Danish virtual bank
, publishes a list of ten black swan class market events. Some of the more dramatic possibilities Saxo advance for 2009: crude trading down to $25 a barrel causing severe social unrest in Iran, the S&P 500 falling to 500, Chinese GDP approaching zero and several member states dropping the Euro. The complete 2009 list is here
and for completeness their 2008
[ .pdf ] , 2007
[ .pdf ] and 2006
lists [ .pdf ] are also available. [more inside]
posted by Mutant
on Jan 7, 2009 -
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.
posted by Asparagirl
on Dec 29, 2008 -
are complex little known financial instruments (insurance contracts) that are on the brink of triggering "the most colossal rights issue in the history of the world, all at once .. mandatory." If, out of a list of several hundred major companies, any nine go bankrupt
, the CDO's are in default, which would mean a mass transfer of cash (real money) from unsuspecting investors around the world goes into the banking system. How much? Nobody knows, but it’s many trillions. Banks will be flush with cash, perhaps ending the credit crisis, while many investors (individuals, charities, municipalities) will be wiped out. Alternatively, the triggering of default on the trillions of synthetic CDOs could be a disaster that tips the world from recession into depression. Nobody knows, but it won’t be a small event. Thus far the count is six
: three Icelandic banks, Countrywide, Lehman and Bear Stearns.
posted by stbalbach
on Dec 1, 2008 -
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. [more inside]
posted by jason's_planet
on Nov 15, 2008 -
The End of the Wall Street Era.
“We always asked the same question,” says Eisman. “Where are the rating agencies in all of this? And I’d always get the same reaction. It was a smirk.” He called Standard & Poor’s and asked what would happen to default rates if real estate prices fell. The man at S&P couldn’t say; its model for home prices had no ability to accept a negative number.
The author of Liar's Poker
on the collapse of the subprime industry.
posted by bitmage
on Nov 11, 2008 -
Soros on the banking crisis:
"A deep recession is now inevitable and the possibility of a depression cannot be ruled out.
When I predicted earlier this year that we were facing the worst financial crisis since the 1930s, I did not anticipate that conditions would deteriorate so badly." - Soros lays out some ideas about what can be done to fix the markets ... Planet money had another nicely done piece on the debacle last Friday
posted by specialk420
on Nov 10, 2008 -
Wall Street Lays Another Egg.
"Not so long ago, the dollar stood for a sum of gold, and bankers knew the people they lent to. The author
charts the emergence of an abstract, even absurd world—call it Planet Finance—where mathematical models ignored both history and human nature, and value had no meaning."
posted by homunculus
on Nov 7, 2008 -
Confused about what caused this whole credit crisis? Let me Paddy Hirsch from Marketplace explain it to you in this
surprisingly entertaining and easy to understand video. While you're there, check out his explanation of short selling
and credit default swaps
. I wish this guy was my finance professor.
posted by JPowers
on Oct 23, 2008 -
Afraid to read the daily news?
Need some broader perspective on The Credit Crunch? There are lots of different ideas by lots of different authors floating about ... [more inside]
posted by Mutant
on Oct 13, 2008 -
We already talked
(self-link, sorta) about Zeitgeist: The Movie
. Its author, Peter Joseph, recently released Zeitgeist: Addendum
. (beware: last two links are two hour movies) This time, it’s about money and debt, scarcity and resources. The first, financial part may look like an extended Ron Paul
ad, but then there’s a sudden turn towards resource-based utopian techno-communalism, and an endorsement for The Venus project
. It seems to me like "Kropotkinian anarchism meets The Matrix". In these rough times
, is it time for a big leap? [Also announced: The Zeitgeist Movement
, still not active]
posted by Baldons
on Oct 7, 2008 -
"Through the quarter-century in which China has been opening to world trade, Chinese leaders have deliberately held down living standards for their own people and propped them up in the United States. This is the real meaning of the vast trade surplus—$1.4 trillion and counting, going up by about $1 billion per day—that the Chinese government has mostly parked in U.S. Treasury notes. In effect, every person in the (rich) United States has over the past 10 years or so borrowed about $4,000 from someone in the (poor) People’s Republic of China." James Fallows on how the trade deficit between China and America works and what it means for the future.
posted by afu
on Sep 30, 2008 -
"In the limit of an infinite economy, the number of initial downgrades is Poisson distributed.
This captures the idea that the shock initially affects only a small number of firms.
Nonetheless, the distribution of the total number of defaults has slowly decaying tails ... A firm might well be able to absorb its shock, but it might not be able to absorb both the shock and the resulting deterioration in the average rating. The initial downgrades may thus trigger additional defaults that, in turn, further deteriorate the average rating, and so on. In
a large economy, this cascade can be described by a branching process." Ulrich Horst, Journal of Economic Behavior & Organization, 2007. (Internet supplement!
) [more inside]
posted by geoff.
on Sep 30, 2008 -
A private FDIC
The Certificate of Deposit Account Registry Service
, or CDARS
, is a way to conveniently spread bank accounts across multiple banks. CDARS, run by privately held Promontory Interfinancial Network, offers its customers up to $50 million of deposit insurance
, or exactly 500 times single account limit mandated by the FDIC. Promontory does this by arranging to distribute client funds nationwide in $100K increments to over 2,300 banks. Promontory is nothing if not well connected: while founders Mark Jacobsen previously served as Chief of Staff at the FDIC
, co-founders Alan Blinder was Vice Chairman of the Federal Reserve
and Eugene Ludwig was Comptroller of the Currency
, several former members of the FDIC currently serve on Promotory's board.
Not surprisingly, some folks are openly critical of Promotory, some going so far as to state "It undermines a lot of the safeguards around the FDIC deposit fund."
posted by Mutant
on Sep 26, 2008 -