Links 4/16/09

BBC

Data Center Knowledge

Wall Street Journal. On the one hand, banks lent a lot of money to people who shouldn’t have gotten as generous terms as they did, so the retrenchment makes sense. But the whole pitch for the bailout was to get lending going again (a premise we’ve questioned). It’s becoming increasingly apparent that the rescues are really about protecting bondholders.

Eurointelligence

William Cohan, New York Times. I’m a day late to this, but it is still worth reading.

Brad Setser

Paul Krugman. The banks as Iraq.

Jesse

Dani Rodrik

Financial Times. Consistent with Tyler Durden’s thesis. Also a very surprising statement.

Tyler Durden. I’m not big on market calls, but the detail about the recent whackage is informative.

Economic Policy Journal. Short but important.

Steel Guru (hat tip reader Michael)

Mother Jones. Unfortunately, it seems to be only venues like Mother Jones that are picking up on the issues raised by former bank regulator William Black.

Times Online

Independent. Another great use of your tax dollars.

TPMMuckraker

Antidote du jour:

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9 comments

  1. LeeAnne

    Luv the partners in crime tot and kitty -all shiny, pure – and evil.

    I’m keeping that one.

  2. LeeAnne

    Richard

    Now that I have the blogger working -back to my comment on yours yesterday referring to lawlessness ‘since Nov ’08.’

    As one of my favorite commentators I was taken aback -surprised that you referred to lawlessness since Nov ’08, the implication being that it began with Obama -odd that.

    Wall Street lawlessness leading to the demise of investment banking and of the world economy as we’ve known it began in earnest with the coming of age of baby boomers in the 1980s led by senior Sandy Weill.

    Lawlessness took a leap forward under Bush, and yet another quantum leap with the appointment of Paulson that continues under Obama.

  3. lambert_strether_openid

    Yves writes:

    [I]t seems to be only venues like Mother Jones that are picking up on the issues raised by former bank regulator William Black.

    This issue precisely delineates how far the Overton Window can be pushed left when the Beltway is run by Finance Democrats. Answer: Not very far. Where is the Krugman column on this, for example?

  4. Jon Hendry

    When I was 16, my dad gave me the ‘don’t drink’ lecture. I asked what he was doing at 16. He replied, “Drinking at the Raffles Club in Singapore”.

    (He joined the Navy at 15)

  5. joe

    “TARP Cash Isn’t Moving Forward”

    Deflation is not purely or even predominately a monetary problem. This is the lesson we’re now in the process of relearning, taking away the tax cuts from Obama stimulus, the rest is not nearly enough to stem the tide, particularly since much of the banking system remains crippled.

    We’re Japan, if were lucky.

  6. tyaresun

    OT:

    Elizabeth Warren was on the Daily Show. She certainly needs more press so spread the word.

  7. monte_bel

    Regarding the Goldman link, Mr. van Praag has inspired me to comment – apologies if this is widely accepted or I’m completely missing something – isn’t it common knowledge that the non-AIG monoline insurers have been unwinding financial guarantees on CDOs generally for 30 cents on the dollar with the extreme trash like CDO^2s around 50 cents? If the AIG book was better vintages then a ‘market’ rate or recovery would be less than a 30 cent recovery. None of the non-AIG monoline insurers have technically defaulted / had a credit event despite the massive losses this voluntary unwind caused for the counterparties that faced them. So being long protection from a non-AIG monoline and long protection on the non-AIG monoline was a wildly losing trade, as opposed to Goldman’s long protection from AIG, long protection on AIG being a huge winner. And while we’re on the topic, would you pay a 100mm premium for an 11 figure insurance policy? Yes 100mm is a lot of money but not on that kind of notional. The only counter argument I can think of would be that some or all of the AIG trades were papered as TRSes instead of FGs but in the context of the broader market goings on falling back on that distinction seems like a punk kid pointing at the label on a deck chair of the Titanic. Remarkably unimpressive letter. Fire up Celine Dion. I’m done.

  8. Richard Kline

    Say there, LeeAnn, I don’t recall offhand saying Nov 08, but to clarify my remarks in that instance had nothing to do with Obama or his team in the first instance. I was referring, with inadequate reference, to the passage of the TARP program which in practice gave unlimited and unchecked authority to officials of the Executive branch to reward and intervene in the financial system quite at their own discretion. They had already been ignoring any statutes which they deemed ‘inconvenient in a crisis’ and the tacit more than official sanction from Congress implied in TARP made them financial proconsuls. Both the last Administration and the present one proceeded with all good speed to abuse even that excessive authority. I’m not saying, at all, that every regulator in the Government is on board with all this; clearly many are not. But the official policy regarding statures at present is “Simon sez.” And the thing about power, everyone likes having it. Last Admin, this Admin, next Admin: having the acquired unchecked power to reward friends and make the system more friendly to them and theirs, who would think that their actions will show restraint.

    Barack Obama is definitely not the source of our problems. But as, at present, a major enabler of said problems continuance, he stands accused, and the more so with each passing day. He wasn’t part of the problem when he arrived, though his subservience to the existing system was symptomatic of that problem, but he _is_ part of the problem as of April 09.

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