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Clearinghouses are the wrong remedy for CDS, but that horse has left the barn and is already in the next county. And I must confess, they sound deceptively appealing (I was a proponent early on) until you dig further into how they would work for CDS. They need to be regulated intrusively, with the intent of shrinking the market considerably over... - http://quotingthecrisis.tumblr.com/post...
Productivity increased 9.5 percent in the nonfarm business sector during the third quarter of 2009 as unit labor costs fell 5.2 percent (seasonally adjusted annual rates). In manufacturing, productivity increased 13.6 percent while unit labor costs fell 7.1 percent… Back in the 1930s there was a Polish Marxist economist, Michel Kalecki, who argued... - http://quotingthecrisis.tumblr.com/post...
A market where everything is rising is not an efficient market: it’s a market which is failing to do its job of allocating capital efficiently to where it can be put to best use, and away from areas where it can cause big problems. - http://quotingthecrisis.tumblr.com/post...
Novation Releases All MIDI Details for Launchpad - http://createdigitalmusic.com/2009...
Now maybe I am just hopelessly out of touch, or perhaps more accurately, the Fed has created such a ridiculously favorable environment for banks and traders that if you are moderately competent, making money is like shooting fish in a barrel. But a winning streak this consistent looks like a rigged game. Is this just, ahem, “information... - http://quotingthecrisis.tumblr.com/post...
Digital Sales Up, But is Apple Monopoly the Price? NPD, Mint Data, Editorial Analysis - http://createdigitalmusic.com/2009...
And an indication of just how much of a hedge fund Goldman has become instead of a client servicer, the firm’s Equities Commissions revenue for the quarter dropped to $930 million from $1.2 billion YoY, while prop Equities Trading skyrocketed from $354 million to $1.8 billion YoY! And just in case you were wondering someone, somewhere was... - http://quotingthecrisis.tumblr.com/post...
Goldman lost money on just one trading day in Q3, making money on all the other 64. As a reminder, even in Q2 Goldman lost money on two trading days. The statistical probability distribution of 1 out of 65 is something that not the SEC, but Richard Feynman should be looking into, as Goldman Sachs, after rewriting the lass of risk/return, is now... - http://quotingthecrisis.tumblr.com/post...
My concern now is that it appears we haven’t learned anything from the turmoil that happened all of 8-12 months ago. As Nouriel Roubini recently pointed out, the correlation of all risk assets has approached one as all assets have all moved in one direction… up. - http://quotingthecrisis.tumblr.com/post...
I’ve previously written about Goldman’s shift from an investment bank to a hedge fund, but hey at least they’re a VERY VERY profitable hedge fund. That said, with a 98% hit-rate while client orders are also flying about, the argument for front-running makes a lot of sense. - http://quotingthecrisis.tumblr.com/post...
Municipalities dealt with the separation between taxes and expenses by borrowing. In the mid-1990s, states and cities were retiring as much debt as they were incurring. During the 2000s, though, they borrowed about $150 billion per year in aggregate, peaking at $215 billion in 2007 by which time $2.7 trillion in debt was outstanding, more than two... - http://quotingthecrisis.tumblr.com/post...
The same reckless lending that characterized the subprime mortgage business in residential was also characterizing what went on in commercial real estate in the mid 2000s.
Everything’s going in the wrong direction and I think we’re going to see quite a lot of tragedies in that sector. - http://quotingthecrisis.tumblr.com/post...
Profit and capital gains may look much the same to the individual bank – a stream of revenues – but they have different macroeconomic consequences. Lending to the real sector is self-amortising: it creates a debt, but also the value-added to repay principal and interest. Such loans enlarge the economy in proportion to the debts created and are... - http://quotingthecrisis.tumblr.com/post...
But the correct conclusion to draw is not that major governments (such as Japan and the United States) can easily borrow as much as they want. It is that they can easily borrow as much as they want until confidence that they can do so evaporates — and we don’t know when, how or whether that may happen. - http://quotingthecrisis.tumblr.com/post...
In the 1980-2007 era of cheap credit and deregulation, banks had every incentive to move from real-economy projects, yielding a profit, towards lending against rising asset prices, yielding a capital gain. In the 1990s and 2000s, loan volumes rose to unprecedented levels, supporting global assets booms in property, derivatives and the carry trade.... - http://quotingthecrisis.tumblr.com/post...
The Wall Street Journal reports today that Goldman Sachs is trying to arrange to buy tax credits from Fannie Mae. Obviously, it would buy them at a discount. Goldman, you may recall, was saved with taxpayer money when the panic spread last year. A naïve person might think such a company would see a patriotic virtue in paying taxes. Fannie Mae is... - http://quotingthecrisis.tumblr.com/post...
Periodic Table of Bloggers - http://www.ritholtz.com/blog...
People of good faith debate whether the gold standard, or national, state or local public banking is the best solution. But they agree that the current fiat currency system where the creation of credit is controlled by the private banks has pushed us into an economic crisis and a credit crunch, with little hope of stability for the future.... - http://quotingthecrisis.tumblr.com/post...
robot-heart-politics: Four graphs created by the International Federation of Health Plans that compare how much US residents and people in other countries pay for health care. As Jay Livingston of the Montclair SocioBlog says, “Our Lipitor must be four to ten times a good as the Lipitor that Canadians take.” (via Charts showing how much US... - http://quotingthecrisis.tumblr.com/post...
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This brand of economics is the conservative obsession with personal responsibility taken to the nth degree. We are weak, selfish, and we spend frivolously. If only we’d buckle down, pull ourselves up by the bootstraps, and limit ourselves to “necessary” expenditures we would be fine. Yes, we can cherry pick an example here or there of a person who... - http://quotingthecrisis.tumblr.com/post...
If, as happened in the USA on a vast scale, the central bank allows itself to be used as an off-budget and off-balance-sheet special purpose vehicle of the Treasury, and refuses to provide to the Congress some of the information essential for the quantification of the fiscal transfers it has made, the central bank not only subverts the... - http://quotingthecrisis.tumblr.com/post...
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