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Bizarrely, even though subprime in the US was the trigger that caused the now worldwide financial crisis, we will probably suffer the least because, impossible as it sounds, our banks weren’t as insane as those elsewhere. Sure, our banks are levered, as are households, but bank assets, as a percentage of GDP are “relatively” [...] GE says everything’s fine, just fine, thanks for asking, as the stock drops off a cliff. The problem is their finance unit, which threatens to turn the entire company into smoking rubble. Those bothersome auditors say GM is circling the drain, how thoughtful of them to awaken from their slumbers long enough to notice [...] An ex-Countrywide honcho is buying mortgages for pennies on the dollar, then offering distressed homeowners greatly reduced monthly payments. Kurland’s new company, PennyMac (!), goes to a demolished bank or the FDIC and buys up delinquent mortgages at, say, 20 cents on the dollar. Kurland’s people then call the delinquent homeowner and say, “How [...] From Wired. In 2000 a brilliant quant named David X. Li devised a mathematical formula called a copula function that got widely used by Wall Street to model risk. Li came up with an ingenious way to model default correlation without even looking at historical default data. Instead, he used market data about the [...] Moody’s is about to downgrade as much as $300 bn in commercial mortgage backed securities. This will force many entities that hold them to sell, as they are not permitted to own lower-rated securities. Plus, everyone will have to write-down the current (probably fantasy) valuations on their books. Which will probably trigger more downgrades. [...] Prices were down 20-30% in 4th quarter 2008 for high end Los Angeles homes. The same thing happened here in San Francisco. People thought high end property was safe. It wasn’t, it just took longer to start to fall, that’s all. One problem is that mortgages, especially jumbos (which would be needed to buy these [...] The United Nations’ crime and drug watchdog has indications that money made in illicit drug trade has been used to keep banks afloat in the global financial crisis, its head was quoted as saying on Sunday. So, let’s see if I have this right, organized crime money is being used to keep organized crime [...] Economist Doug Henwood writes about on the current economic crisis and what, if anything, the left can do out it in Gloomy, w/ a 15% chance of depression He runs Left Business Observer, a left / socialist newsletter and listserv, has a show on WBAI, and is savvy enough about economics that he often gets [...] This comes as no surprise. Their economy is in tatters and protests have been increasing both in numbers and intensity. At a rally Monday outside Parliament, protester Svginn Rumar Hauksson said demonstrations won’t end yet. “The protests will continue until it becomes clear that things are really changing,” he said. John Thain was fired this week as CEO of Merrill Lynch after zillions more in garbage assets were found on their books by BofA, who bought the company last September. Thain apparently had been a busy guy since the sale, whining that he should get a huge bonus because he arranged it (conveniently forgetting [...] |  | ||||
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