It was truly startling when it was announced. The second and more dangerous phase of the Global Financial Crisis had begun on July 15, 2008. Within two weeks, Merrill Lynch had etched its name on the growing list of “troubled” institutions. On July 28, 2008, Merrill Lynch agreed to sell $30.6 billion gross notional amount of U.S. super senior ABS [...]
Goldman Sachs is cutting back more in its staff than previously announced. Though not yet confirmed, Bloomberg writes that the reductions in the fixed income business are being increased. After posting absolutely horrible results for Q1, the job cuts were expected. The continuation of them, however, seems to be more drastic than first thought even though “market” conditions improved into [...]
I think the dominant feature of August was rising interbank “dollar” rates; everything that followed out in the open was traced to “whatever” was taking place in funding markets. Repo rates shot upward, as did unsecured LIBOR (leading to serious credit risk implications via TED). All that led into the yuan crisis escalating beyond the PBOC’s rather limited control (which [...]
It wasn’t all that long ago that bank stress tests were designed specifically to ensure 100% passing rates. The purpose of the exercise has nothing to do with bank safety or even oversight, it is a mode of pure psychology (bordering on propaganda). The first introduction back in 2009 was effectively that – to calm investor fears by stamping the [...]
It has not received much if any attention, but the Swaps Regulatory Improvement Act passed the House of Representatives on October 30. It received significant bipartisan support, including 70 Democrat “yeas.” As part of the original Dodd-Frank Act, banks were being required to separate some of their derivatives business from federally insured banks. It would have required a separate entity [...]
Stay In Touch