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Archive for the ‘Credit Crunch’ Category

Scrap the Old Plan; Take Action

Posted in Autos, Bailout, Credit Crunch, Monetary Policy, tagged , , , on November 20, 2008 | Leave a Comment »

Halt trading – give these computer drone traders a vacation, and let them come back to reality. Let congress vote on the future of General Motors, Ford, and Chrysler; whatever the result may be, let it settle without any trading.
If they choose to let the Big 3 file bankruptcy, they should facilitate it such that [...]

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The Real Reason to Save the Big 3

Posted in Bailout, Credit Crunch, Structured Finance on November 19, 2008 | Leave a Comment »

There’s really 1 reason that’s important, and the others don’t matter when considering this (from “The New Republic”):
“Bankruptcy need not mean that the company disappears.” But, while it’s worked out that way for the airlines, among others, it’s unlikely a GM business failure would play out in the same fashion. In order to seek so-called [...]

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“The Crisis & What to Do About It”

Posted in Credit Crunch, Housing Bubble, tagged , , on November 10, 2008 | Leave a Comment »

George Soros wrote an Oped in The New York Review of Books over the weekend, which provides updated analysis of his most recent book, The New Paradigm for Financial Markets. It is very comprehensive, and does a good job explaining how past credit crises have culminated into this greater economic turmoil (and pretty much summarizes [...]

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LTCM and Risk Arbitrage; Don’t Try This at Home

Posted in Credit Crunch, Market Sentiment, tagged , on October 24, 2008 | Leave a Comment »

Just found a cool site: www.arbitrageview.com
In addition to defining all of the different forms which arbitrage can take, this site has a section which lists all of the announced M&A deals which are awaiting approval; useful for a strategy called “risk arbitrage,” or betting that announced acquisitions will actually close – you purchase the [...]

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The Worst Week in Review

Posted in Credit Crunch, Market Sentiment, tagged , on October 11, 2008 | Leave a Comment »

From the WSJ:
The S&P 500 has lost 22% of its value in 6 trading sessions.

BusinessWeek gives a nice synopsis of this crash like action. During the crash of 1987, we fell 29.57% in the worst nine-day period before bouncing 15% in two days…the bottom occurred on a Monday. The chart above doesn’t even show the [...]

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The New Center of Attention

Posted in Bailout, Credit Crunch, Financials, tagged on October 5, 2008 | 1 Comment »

This Wachovia episode is only getting more interesting. Before there is a resolution to this cat fight, I thought it would be worthwhile to point out the pros and cons of each outcome.
This deal is a no brainer for everyone but Citi;

Wells Fargo is using private money to buy Wachovia, meaning no tax dollars necessary
They [...]

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Black Monday…

Posted in Credit Crunch, tagged on September 29, 2008 | 1 Comment »

Ironic, isn’t it? Credit markets are frozen (LIBOR is marked at 5.22%, as credit spreads widen even further). I posed a question in an earlier post trying to figure out where the rest of the world stands, and why they haven’t come to our aid…this should help explain:
The U.K. Treasury seized Bradford & Bingley Plc, [...]

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Roubini: “Bailout – No cure for recession”

Posted in Credit Crunch, tagged , , on September 27, 2008 | Leave a Comment »

Nouriel Roubini is an NYU economics professor who has nailed every last detail of our financial crisis to date.
He recently had a conference call with his “RGE Economonitor” subscribers to review the problems at hand, and to discuss where he thinks we go from here. Unfortunately, access to his service is very expensive, but is [...]

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Bailout Aftermath

Posted in Commodities, Credit Crunch, Currency, tagged , , , on September 22, 2008 | Leave a Comment »

I have to first congratulate my old economics professor for nailing the root of the dollar’s weakness in a prior post:
The US economy, rightly, faltered first – With no fiscal policy upon which to draw, Bernanke got it all with not even a blindfold to keep him company. Rates were slashed, time and again. Meanwhile, [...]

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Where’s our help?

Posted in Bailout, Credit Crunch, tagged , , on September 22, 2008 | Leave a Comment »

No, not from the US government. That title would be ridiculous…I meant more along the lines of a global effort to prop up our financial system.
With Paulson’s $700 billion plan, our public debt has increased by 175% (from 400 billion to 1.1 trillion). Since America is the center-piece to the global economy (I shouldn’t even [...]

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