Posts tagged as:

banks

SIGTARP confirms: TARP an exercise in moral hazard

January 31, 2010

The Special Inspector General's report on TARP has been released from embargo. It concludes that TARP was unsuccessful, and even its (debatable) short-term corrections are overshadowed by the extent to which it has returned the economy to its previous bubble state -- "we are still driving on the same winding mountain road, but this time […]

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Interviewing Myron Scholes

May 16, 2009

Speaking of LTCM (and of this Sunday's Times Magazine, for that matter), here's an interview that's going to run with Myron Scholes, who comes off like a bad comedian. The questions are poor and the answers arguably worse. Let's take a look, shall we? The second question: "You're known as the intellectual father of the […]

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Projections of future losses may appear closer than they are

May 7, 2009

AK pointed me toward this piece from The New Yorker, "Stress Test Results: In Line With Other Estimates," which I excerpt here in its entirety. I've bolded the last sentence: From the moment the Treasury Department announced its plan to stress-test the country’s nineteen biggest “bank holding companies,” the process was dismissed as a whitewash. […]

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Quick thoughts: stress tests and such

May 6, 2009

Front page of the NYT tonight: "As Stress Tests are Revealed, Markets Sense a Turning Point." I know I'm a cynic, but my first thought was "...which way?" Is it even possible to turn upward after a 40% rally? Sure enough, the article is quickly laced with the caveat "All of this assumes that the economy […]

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How (not) to design a stress test

April 25, 2009

Of course the big news of Friday afternoon was the preliminary release of the metrics used in the bank stress tests.  Unfortunately it didn't turn out to be much news at all; few hard figures were revealed and those that were came largely within expectations.  The NYTimes published an excellent copy of the document right […]

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Morgan Stanley's missing month

April 23, 2009

Morgan Stanley took a page from the Goldman playbook and disappeared their month of December and it's $1.3B loss. For some reason, the WSJ decided to write an actual article about it, whereas GS's December loss was only worthy of a blog post.

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Batter up: WFC

April 22, 2009

The newest sideshow in the circus that is the banks' 1Q earnings is Wells Fargo, who most recently was spotted igniting a strong rally with the early announcement that earnings would not only beat the expected number of $0.39/share, but knock it out of the park, guiding expectations to $0.55/share. Today the number came in right […]

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Models are just the tool

April 17, 2009

I'm a big fan of Emanuel Derman.  His memoir My Life as a Quant tells the story of a young physics Ph.D. who stumbled into finance and eventually became the head of Goldman Sach's Quantitative Risk Strategies group.  He currently oversees the financial engineering program at Columbia University and is the CRO of Prisma Capital. Today […]

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TIME: "It's over!"

April 14, 2009

TIME magazine has called it over - thanks for coming, everyone, and please watch your step as you disembark the ride. In an article titled "More quickly than it began, the banking crisis is over," the intrepid financial analysts at TIME lay out their argument: But, the great banking crisis of 2008 is over. It […]

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Ken Lewis makes dubious claims

March 9, 2009

BOA chairman Ken Lewis has written an opinion for the WSJ ("Some Myths About Banks")  containing the following "myth" and rebuttal: The banks are insolvent. In the past 18 months, we've seen fewer than 50 bank failures. That compares to about 2,000 failures or closings of commercial banks or savings institutions between 1986 and 1991. There may […]

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The Crisis of Credit Visualized

March 2, 2009

This visualization of the credit crisis is fantastic:

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A sense of despair

February 27, 2009

For once, I agree with Paul Krugman when he writes: There’s so much to like about where Obama is going — health care, transparency in government, ending the war in Iraq. And the stimulus bill is OK, though not big enough. But on the question of fixing the banks, many of us are feeling a […]

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Deus Ex Machina

February 23, 2009

Paul Krugman's new opinion, "Banking on the Brink," contains an excellent point: The real question is why the Obama administration keeps coming up with proposals that sound like possible alternatives to nationalization, but turn out to involve huge handouts to bank stockholders. He follows it up with a bizarre one: What we want is a […]

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Just answer the questions, Mr. Chairman

February 12, 2009

Barney Frank (D - MA) is the chairman of the House Financial Services Committee, which means he plays quite a role in analyzing the meltdown of 2008.  Yesterday, he led the interrogation of the bank CEO's.  Today, Caroline Baum's Bloomberg column hypothesized what would transpire if the situation were reversed: Chairman Frank, on July 14, 2008, you made […]

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