From the category archives:
The credit virus just keeps spreading, and with each new outbreak of disease,various government agencies are forced to respond. The government is now talking about allowing insurance companies toget their hands on billions in bailout money. Here’s anexcerpt from the Washington Post:
“The Treasury Department is working on ways to broaden its $700 billion bank rescue [...]
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Every day, it seems like events in some far corner of the world come back to haunt the markets. Many of us here inthe U.S. may not pay attention to these events, but we should. I talked about Iceland a while back, and how thatcountry’s currency, stock, and banking crises would have repercussions here in [...]
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Amidst all the $250 billion bailout hoopla, and the previous news that the government will buy up both whole loansand Mortgage Backed Securities, in an effort to drive financing costs DOWN, something interesting is going on — and Idon’t see many people talking about it. Home mortgage rates aren’t falling. They’re going UP.
The average rate [...]
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It’s a busy day on the global markets front. So let’s get right to the news …
* U.S. dollar LIBOR rates generally rose again, with 3-month LIBOR up 3 basis points to 4.32%. That is just shy of lastFriday’s cycle high of 4.33%. Overnight LIBOR jumped to 3.94% from 2.37%, though that is still below [...]
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If you think our credit market conditions are tight, get a load of what’s happeningin Iceland. The exchange rate of the Iceland krona against the U.S. dollar has plunged in recent weeks. Eachdollar now buys about 113 krona, up from 58 back at the recent low in November 2007. The krona has dropped 22%this week alone to [...]
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So what are my thoughts on this gazillion dollar attempted bailout of the financial system?
Well, if unfettered American capitalism wasn’t already on its deathbed due to the earlier bailout efforts, it’s lyingon a cold slab somewhere now. For better or for worse, the government is now intimately involved in everything from thepricing of mortgage backed [...]
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The Fed left the funds rate unchanged at today’s policy meeting. Here is the post-meeting statement …
“The Federal Open Market Committee decided today to keep its target for the federal funds rate at 2 percent.
“Strains in financial markets have increased significantly and labor markets have weakened further. Economic growthappears to have slowed recently, partly reflecting [...]
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What more can I say? The chaos continues. AIG is the area of biggest focus in the credit market, given the gigantic size of its portfolio and the risks it is facing. FromBloomberg:
“American International Group Inc.’s ratings cut drove the cost of default protection on Wall Street banks to a recordon speculation the insurer needs [...]
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For the past several months, this is what you’ve heard from the financial industry about the scope of thecredit crisis:
“It’s just subprime mortgages.”
Then …
“No, it’s just Alt-A and subprime.”
Then …
“Okay, you’re right. Prime doesn’t look so hot anymore either. But clearly, it’s just residential mortgages.
Then …
“Those auto loans? Alright. You caught me there too. But [...]
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Initial jobless claims filings surged to 455,000 in the week ended August 2 from 448,000 in the prior week. That waswell above the 425,000 forecast of economists polled by Bloomberg … the highest in any week since March 2002 … andone of the highest readings going back a couple of decades.
This is yet another indicator [...]
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