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All Clear?

We are months into the credit crisis that began last summer, triggered by the meltdown in U.S. sub-prime lending. The crisis has been much deeper, much wider and longer than most market participants have expected. Yet, until the failure of Bear Stearns last month, no major financial institution had suffered. This crisis and the concomitant recession have been marked by […]

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Articles: Bank Writedowns & Failures

I am now updating the information on my Credit Crisis Timeline here: http://pro.creditwritedowns.com/credit-crisis-timeline There have been a tremendous number of economic dislocations during the present financial crisis. Initially written off as a sub-prime crisis, leading policy makers said the crisis was contained. It has since spilled over into Jumbo mortgage rates, Collateralized Debt Obligations (CDOs), all asset backed securities, High […]

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Banks tightening the screws on consumers

The banking crisis in the U.S. is taking on a significant turn for the worse as banks tighten the screws on consumers. With banks facing record writedowns to their equity capital, they are looking to limit their exposure to the mortgage market. The latest salvo in this battle is banks terminating unused lines of credit for homeowners. This reduces the […]

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Global Bank write-offs and failures

Since the housing bubble created a global credit crunch in June 2007 after Bear Stearns announced the collapse of two funds it ran (its High-Grade Structured Credit Fund and its High Grade Structured Credit Enhanced Leveraged Fund), there have been a massive number of announced write-offs and bank failures. As a result, a number of banks have also had to […]

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UK sure to follow the US into recession

I have been in Europe for a while and am back at blogging after a two-week hiatus. This morning I was listening to “Wake Up To Money,” a British finance show that one can hear via podcast. The gist of the discussion was that the UK economy is slowing markedly with consumers really pulling back. In fact, the show said […]

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Interesting Articles

2008 06 – Next Phase of the Credit Crisis to Hit Credit Default Swaps $62 Trillion Market 2008 06 – Frank-Dodd Rescue Prolongs Housing Crisis by Deferring Defaults 2008 06 – Federal Reserve and ECB are in no mood to save us from the consequences of our debt 2008 05 – Immoral Hazard 2008 05 – Government Numbers cover up […]

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Bank bankruptcy or bailout?

Update: Also see my list of Bankrupt global financial institutions. Recently, the pace of writedowns by major money center banks has increased. UBS announced today it wrote down $19 billion. Deutsche Bank announced today it wrote down $4 billion. Lehman Brothers was forced to raise over $4 billion in equity capital. Merrill Lynch and Citigroup are expected to write down […]

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News Round-Up: 01 Apr 2008

Food Price Inflation Changes How We Shop – Chicago Tribune (3/31/2008)Fed eyes Nordic-style nationalisation of U.S. banks – UK Telegraph (4/1/2008)UBS writes off $19 billion – Yahoo! News (4/1/2008)Deutsche Bank Expects $4B Subprime Hit – Yahoo! News (4/1/2008)WaMu Alt-A Pool Deteriorates Further – Michael Shedlock (4/1/2008)Lehman raises $4 bln of capital to quell critics – Yahoo! News (4/1/2008)The Wheels Fall […]

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How we got into this mess

A few days ago Comstock Partners released a Special Report outlining how we got into the economic malaise that is hitting us right now. Their report is spot on in terms of the genesis of our problems being easy money. They also accurately note that we should have had a major recession in 2001 given the historically large tech bubble […]

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Is the Fed reckless?

Recently, on Mar. 18th, the Federal Reserve lowered the Fed Funds rate to 2.25%. In the accompanying statement, the Fed said the following: “Recent information indicates that the outlook for economic activity has weakened further. Growth in consumer spending has slowed and labor markets have softened. Financial markets remain under considerable stress, and the tightening of credit conditions and the […]

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A populist interpretation of the latest Boom-Bust cycle

This is a story of unequal re-distribution of wealth from the less fortunate to the more fortunate. This is a story of the United States in which the rich get richer at the expense of everybody else. At the conclusion, ask yourself: is this true and, if so, what should we do about it?

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It’s the debt, stupid

Note from June 2010: You’ll forgive me if I have conflated private and public sector debt below as if they are the same. They are not. When I speak of deficit spending in the same voice as private sector debts, I really point to deficits to maintain the status quo ante as promoting the accumulation of private sector debt. The […]

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