Bernanke Panky News

A New Austrian Coin Trick

Implode-Explode Heavy Industries news feed — Mon, 06 Jul 2009 17:17:47 +0000

``Now it's too late for the Bundesbank. The Austrians were first to grasp that in bad times, it makes more sense to mint investment opportunities rather than collector's items.''

Great Inflation Debate: Economist Says Japan Model Doesn’t Fit

Implode-Explode Heavy Industries news feed — Mon, 06 Jul 2009 16:38:51 +0000

" While Berner dances around the core point of whether core prices will or won’t rise, his argument about the distinctions between the U.S. and Japanese economies are worth throwing into the mix."

Georgia banks on brink of collapse? Not quite

Implode-Explode Heavy Industries news feed — Mon, 06 Jul 2009 15:45:31 +0000

"One national newspaper quoted someone calling Georgia the “Chernobyl of banking.” That may be a catchy phrase, but radioactive we’re not."

Fed Study: US Long-Term Interest Rates To Double

Implode-Explode Heavy Industries news feed — Mon, 06 Jul 2009 13:56:40 +0000

The US deficit has blown out from 3pc to 13.5pc in the past year but long-term rates are largely unchanged. Assuming Mr Laubach’s “typical estimate”, long-term rates have to climb 2.5 percentage points.

...

The study is damning because Mr Laubach was the Fed’s economist at the time, going on to become its senior economist between 2005 and 2008, when he stepped down. As a result, the doubling in rates is the US central bank’s own prediction.

Is A Case Of Quant Trading Sabotage About To Destroy Goldman Sachs?

Implode-Explode Heavy Industries news feed — Mon, 06 Jul 2009 06:07:17 +0000

"Matt Goldstein over at Reuters may have just broken a story that could spell doom for if not the entire Goldman Sachs program trading group, then at least those who deal with "low latency (microseconds) event-driven market data processing, strategy, and order submissions." Visions of swirling, gray storm clouds over Goldman's SLP and hi-fi traders begin to form."

The Risk of Junk Upends Leverage

Implode-Explode Heavy Industries news feed — Mon, 06 Jul 2009 05:25:31 +0000

" Lenders are supposed to call the shots in the midst of a credit drought. But a few junk-rated borrowers have been flexing their muscles lately. Using the specter of about $460 billion of high-yield loans that mature from 2011 through 2014, they’ve gotten creditors to agree to change terms in ways that indicate that leverage has swung to the borrowers from the banks."

Another wave of foreclosures is poised to strike

Implode-Explode Heavy Industries news feed — Mon, 06 Jul 2009 01:08:38 +0000

... just recently, said the 37-year real estate veteran, there's been a surge of requests for so-called broker price opinions, or appraisals that lenders often ask brokers to provide just before they put a foreclosed property on the market.

"I think it's going to be a very big wave," he said. "Just like what we saw through 2008."

...

The Obama administration is racing to avert as many foreclosures as possible. So far, more than 240,000 distressed borrowers have been approved on a trial basis under the Home Affordable Modification Program, in which their loans are being reworked so monthly payments are targeted at 31% of their gross income, said Seth Wheeler, a senior advisor to Treasury Secretary Timothy F. Geithner.

One wonders if the new "125% loan" proposed last week at Fannie was the Obama administration's grand plan to finally "avert foreclosure" for those 240k people parked in the "rescue program" -- who are facing foreclosure largely because of prior lax lending standards. So clearly, new lax lending standards are needed to save them! Hey, hair of the dog, and all!

Would principal cram-downs really be so bad? After all, all the banks are on government life-support. Is it so important to keep the banks from having paper losses that we must saddle distressed borrowers with 125% mortgages, more than two years after the start of the crisis?

H. Rodgin Cohen’s (Failed?) Quest To Backstop Every Bank… Ever (And Usurp Geithner’s Throne)

Implode-Explode Heavy Industries news feed — Sun, 05 Jul 2009 22:00:26 +0000

This is a great post from zerohedge "Over the past two weeks many banks issued press releases and opened up the PR spigot to indicate just how stable they all are now that a few have managed to pay down their TARP commitments. This of course, is nothing but a complete farce, and simply yet another chapter in the "consumer confidence" game played by the administration and its financial underlings. "

Fissures Appear at the New York Fed

Implode-Explode Heavy Industries news feed — Sun, 05 Jul 2009 16:32:49 +0000

" The board of the Federal Reserve Bank of New York is packed with powerful executives. But the selection process leading up to January's promotion of William Dudley to president underscored the lack of clout among the Fed's regional directors as the central bank navigated the crisis."

U.S. regulators could learn from Canada’s banks

Implode-Explode Heavy Industries news feed — Sat, 04 Jul 2009 20:38:38 +0000

"Our northern neighbor sometimes seems so similar to the United States that it's hard to tell where the USA ends and Canada begins. Here's one way: Canada is the place with healthy banks, taxpayers unscathed by megabillion-dollar bailouts and no need to overhaul financial regulation because it was done right the first time."