SA Guest's Comments RSS Syndication from SeekingAlpha.com http://seekingalpha.comuser/167052/comments http://seekingalpha.com/article/128271-book-review-getting-off-track-by-john-b-taylor?source=feed#comment-443457 443457
Simon Johnson - May 2009 - Atlantic

The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time...

www.theatlantic.com/do...]]> Sat, 28 Mar 2009 12:56:48 -0400
Simon Johnson - May 2009 - Atlantic

The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time...

www.theatlantic.com/do...]]> http://seekingalpha.com/article/109576-emerging-markets-the-new-spenders-of-the-21st-century?source=feed#comment-323422 323422
Should China raise wages?

There is a very interesting graph on page 14 of the World Bank’s December 2008 Quarterly Update on China. I am not smart enough to figure out how to reproduce the graph but I will describe it. It shows private consumption and wage share in China as a function of China’s GDP, from 1993 to 2007. From 1993 to 1996, wages rose from 50% of GDP to 54%. During that same period private consumption rose from 47% to 49% of GDP.

Both remained more or less stable for the next three years
mpettis.com/2008/11/sh.../
]]> Sun, 07 Dec 2008 22:24:23 -0500
Should China raise wages?

There is a very interesting graph on page 14 of the World Bank’s December 2008 Quarterly Update on China. I am not smart enough to figure out how to reproduce the graph but I will describe it. It shows private consumption and wage share in China as a function of China’s GDP, from 1993 to 2007. From 1993 to 1996, wages rose from 50% of GDP to 54%. During that same period private consumption rose from 47% to 49% of GDP.

Both remained more or less stable for the next three years
mpettis.com/2008/11/sh.../
]]> http://seekingalpha.com/article/108683-is-the-fed-taking-a-step-toward-explicit-quantitative-easing?source=feed#comment-319750 319750 Another very good article over at RgeMonitor on Quantitative Easing by Edward Harrison

www.rgemonitor.com/fin...

]]> Wed, 03 Dec 2008 10:00:51 -0500 Another very good article over at RgeMonitor on Quantitative Easing by Edward Harrison

www.rgemonitor.com/fin...

]]> http://seekingalpha.com/article/107371-geithner?source=feed#comment-312663 312663
www.nakedcapitalism.co...

Sunday, March 25, 2007
New York Fed President Timothy Geithner's Not-So-Reassuring Speech


Compared to other Fed presidents, Timothy Geithner is straightforward and more than usually willing to talk about bad things. So when he gives a speech that is comparatively upbeat, as he did earlier this week ("Credit Markets Innovations and Their Implications") it should be reassuring.

So why did this speech bother me? It wasn't as if Geithner was overselling his case. He described both the risks (more credit issuance outside the banking system; more debt held by institutions with a propensity to trade rather than buy and hold) and the benefits (greater range of product, better pricing of risk, more diversified portfolios among investors) and thus deemed financial innovation to be a plus.

Perhaps I have an eye for problems, but I saw in Geithner's straight-up-the-center description plenty of cause for worry. First, banks, the financial institutions that are most closely regulated, hold only 15% of the "nonfarm nonfinancial" debt outstanding (remember financial institutions do lend to each other, so that is excluded). By contrast, hedge funds are becoming increasingly important players, and their investing operations are unregulated, unsupervised, and largely unreported. So while the Fed has good information about what its banks are doing, and can send in extra examiners when warranted, it has no idea what is up with the biggest players in the credit markets...
]]> Sat, 22 Nov 2008 18:49:26 -0500
www.nakedcapitalism.co...

Sunday, March 25, 2007
New York Fed President Timothy Geithner's Not-So-Reassuring Speech


Compared to other Fed presidents, Timothy Geithner is straightforward and more than usually willing to talk about bad things. So when he gives a speech that is comparatively upbeat, as he did earlier this week ("Credit Markets Innovations and Their Implications") it should be reassuring.

So why did this speech bother me? It wasn't as if Geithner was overselling his case. He described both the risks (more credit issuance outside the banking system; more debt held by institutions with a propensity to trade rather than buy and hold) and the benefits (greater range of product, better pricing of risk, more diversified portfolios among investors) and thus deemed financial innovation to be a plus.

Perhaps I have an eye for problems, but I saw in Geithner's straight-up-the-center description plenty of cause for worry. First, banks, the financial institutions that are most closely regulated, hold only 15% of the "nonfarm nonfinancial" debt outstanding (remember financial institutions do lend to each other, so that is excluded). By contrast, hedge funds are becoming increasingly important players, and their investing operations are unregulated, unsupervised, and largely unreported. So while the Fed has good information about what its banks are doing, and can send in extra examiners when warranted, it has no idea what is up with the biggest players in the credit markets...
]]> http://seekingalpha.com/article/107371-geithner?source=feed#comment-312357 312357 A speech by Timothy Geithner from March 23, 2007 (about the time the credit crisis began)

Credit Markets Innovations and Their Implications

"The past few years have seen remarkable changes in credit markets, and this is a good time to take stock of what we know about those developments and their implications.

The latest wave of credit market innovations has elicited some concerns about their implications for the stability of the financial system, concerns similar to those associated with earlier periods of rapid change in financial markets. Will the most recent credit market innovations amplify credit cycles, contributing to "excessive" lending in times of relative stability, and then magnify the contraction in credit that follows? Will they introduce greater volatility in financial markets? Will they create greater risk of systemic financial crisis?

These concerns have been heightened in some quarters by the problems currently being experienced in the subprime mortgage sector. It will take some time before the full implications are understood and the full impact can be assessed. As of now, though, there are few signs that the disruptions in this one sector of the credit markets will have a lasting impact on credit markets as a whole.

Indeed, economic theory and recent practical experience offer some reassurance against both these specific concerns and more general worries about the implications of credit market innovations for the performance of the financial system..."

www.newyorkfed.org/new...

(Ben Bernanke could not have said it better)]]> Sat, 22 Nov 2008 09:21:55 -0500 A speech by Timothy Geithner from March 23, 2007 (about the time the credit crisis began)

Credit Markets Innovations and Their Implications

"The past few years have seen remarkable changes in credit markets, and this is a good time to take stock of what we know about those developments and their implications.

The latest wave of credit market innovations has elicited some concerns about their implications for the stability of the financial system, concerns similar to those associated with earlier periods of rapid change in financial markets. Will the most recent credit market innovations amplify credit cycles, contributing to "excessive" lending in times of relative stability, and then magnify the contraction in credit that follows? Will they introduce greater volatility in financial markets? Will they create greater risk of systemic financial crisis?

These concerns have been heightened in some quarters by the problems currently being experienced in the subprime mortgage sector. It will take some time before the full implications are understood and the full impact can be assessed. As of now, though, there are few signs that the disruptions in this one sector of the credit markets will have a lasting impact on credit markets as a whole.

Indeed, economic theory and recent practical experience offer some reassurance against both these specific concerns and more general worries about the implications of credit market innovations for the performance of the financial system..."

www.newyorkfed.org/new...

(Ben Bernanke could not have said it better)]]> http://seekingalpha.com/article/106751-wednesday-outlook-commodities-emerging-markets?source=feed#comment-309639 309639
www.cnbc.com/id/158402...

]]> Wed, 19 Nov 2008 07:47:39 -0500
www.cnbc.com/id/158402...

]]> http://seekingalpha.com/article/106455-tuesday-outlook-commodities-emerging-markets?source=feed#comment-308974 308974
www.cnbc.com/id/158402...

]]> Tue, 18 Nov 2008 11:51:40 -0500
www.cnbc.com/id/158402...

]]> http://seekingalpha.com/article/101372-thursday-outlook-commodities-emerging-markets?source=feed#comment-288810 288810
By Alexis Xydias and Camilla Hall

Oct. 23 (Bloomberg) -- Hundreds of hedge funds will fail and policy makers may need to shut financial markets for a week or more as the crisis forces investors to dump assets, New York University Professor Nouriel Roubini said.

``We've reached a situation of sheer panic,'' Roubini, who predicted the financial crisis in 2006, told a conference of hedge-fund managers in London today. ``There will be massive dumping of assets'' and ``hundreds of hedge funds are going to go bust,'' he said.

www.bloomberg.com/apps...]]> Thu, 23 Oct 2008 12:06:37 -0400
By Alexis Xydias and Camilla Hall

Oct. 23 (Bloomberg) -- Hundreds of hedge funds will fail and policy makers may need to shut financial markets for a week or more as the crisis forces investors to dump assets, New York University Professor Nouriel Roubini said.

``We've reached a situation of sheer panic,'' Roubini, who predicted the financial crisis in 2006, told a conference of hedge-fund managers in London today. ``There will be massive dumping of assets'' and ``hundreds of hedge funds are going to go bust,'' he said.

www.bloomberg.com/apps...]]> http://seekingalpha.com/article/101057-wednesday-outlook-commodities-emerging-markets?source=feed#comment-287793 287793
With respect to the Lehman settlement there is a lot of discussion of the true cost. Below is a press release from the ISDA suggesting it's a $6 bn hit.

Another perspective was offered in an October 15 article by Elisa Parisi-Capone, an economist who writes for www.rgemonitor.com (one of best if not the best finanical / economic sites on the net)

ISDA press release:

"The cash settlement deadline for Lehman is today, October 21. Based on industry estimates, a total of $6bn to $8bn is expected to have changed hands by close of business. This is approximately 1% to 2% of the $400 billion in CDS trades referencing Lehman and does not account for the effects of collateral, which will further reduce the payment amounts.

“Today’s settlement demonstrates that the industry infrastructure for CDS clearly works,” said Mr. Pickel. "ISDA and its members have developed a robust legal and operational framework "

www.isda.org/press/pre...
______________________...

RGEmonitor.com article by Elisa Parisi-Capone

Lehman CDS Payout On October 21: $360bn or $6bn?

"So far, among dealer banks and AIG the CDS fallout from Lehman’s default amounts to around $200bn already."

www.rgemonitor.com/eco...





]]> Wed, 22 Oct 2008 11:16:16 -0400
With respect to the Lehman settlement there is a lot of discussion of the true cost. Below is a press release from the ISDA suggesting it's a $6 bn hit.

Another perspective was offered in an October 15 article by Elisa Parisi-Capone, an economist who writes for www.rgemonitor.com (one of best if not the best finanical / economic sites on the net)

ISDA press release:

"The cash settlement deadline for Lehman is today, October 21. Based on industry estimates, a total of $6bn to $8bn is expected to have changed hands by close of business. This is approximately 1% to 2% of the $400 billion in CDS trades referencing Lehman and does not account for the effects of collateral, which will further reduce the payment amounts.

“Today’s settlement demonstrates that the industry infrastructure for CDS clearly works,” said Mr. Pickel. "ISDA and its members have developed a robust legal and operational framework "

www.isda.org/press/pre...
______________________...

RGEmonitor.com article by Elisa Parisi-Capone

Lehman CDS Payout On October 21: $360bn or $6bn?

"So far, among dealer banks and AIG the CDS fallout from Lehman’s default amounts to around $200bn already."

www.rgemonitor.com/eco...





]]> http://seekingalpha.com/article/99457-g-7-nothing-new?source=feed#comment-280343 280343 Sun, 12 Oct 2008 07:45:26 -0400 http://seekingalpha.com/article/99457-g-7-nothing-new?source=feed#comment-280168 280168
"Created by the Hoover administration and expanded by the New Deal, the RFC's investments in American companies, mostly financial institutions, totaled $50 billion. Adjusted for the change in the Consumer Price Index since 1933, this is about $800 billion--but adjusted for the growth in nominal gross domestic product, it would be about $12 trillion.


The most important element of RFC operations to address the nationwide financial collapse was its ability to invest in equity capital in the form of preferred stock, the same as the current British plan. More than 6,000 financial institutions, including many of the principal banks of the day, were the recipients of RFC investments."]]> Sat, 11 Oct 2008 21:55:02 -0400
"Created by the Hoover administration and expanded by the New Deal, the RFC's investments in American companies, mostly financial institutions, totaled $50 billion. Adjusted for the change in the Consumer Price Index since 1933, this is about $800 billion--but adjusted for the growth in nominal gross domestic product, it would be about $12 trillion.


The most important element of RFC operations to address the nationwide financial collapse was its ability to invest in equity capital in the form of preferred stock, the same as the current British plan. More than 6,000 financial institutions, including many of the principal banks of the day, were the recipients of RFC investments."]]> http://seekingalpha.com/article/99457-g-7-nothing-new?source=feed#comment-280164 280164
]]> Sat, 11 Oct 2008 21:52:05 -0400
]]> http://seekingalpha.com/article/99457-g-7-nothing-new?source=feed#comment-280155 280155
Only problem is that the 1930's RFC $50B is a tad shy of its monetary equivalent today; Try $12 T which is a tad shy of Hanks $700 B

www.rgemonitor.com/fin...]]> Sat, 11 Oct 2008 21:38:13 -0400
Only problem is that the 1930's RFC $50B is a tad shy of its monetary equivalent today; Try $12 T which is a tad shy of Hanks $700 B

www.rgemonitor.com/fin...]]> http://seekingalpha.com/article/99307-friday-outlook-commodities-emerging-markets?source=feed#comment-278561 278561 Fri, 10 Oct 2008 06:43:10 -0400 http://seekingalpha.com/article/98533-fannie-and-freddie-did-not-cause-this-crisis?source=feed#comment-274210 274210
www.nytimes.com/2008/1...

And to keep them honest and balanced, a pretty good article from the same New York Times circa September 1999:

query.nytimes.com/gst/...]]> Sun, 05 Oct 2008 17:58:06 -0400
www.nytimes.com/2008/1...

And to keep them honest and balanced, a pretty good article from the same New York Times circa September 1999:

query.nytimes.com/gst/...]]> http://seekingalpha.com/article/98560-america-needs-a-turnaround-plan?source=feed#comment-274201 274201
NEW YORK , September 30, 2008 -- The New York Stock Exchange will implement new circuit-breaker collar trigger levels for fourth-quarter 2008 effective Wednesday, October 1, 2008.

Circuit-breaker points represent the thresholds at which trading is halted marketwide for single-day declines in the Dow Jones Industrial Average (DJIA). Circuit-breaker levels are set quarterly as 10, 20 and 30-percent of the DJIA average closing values of the previous month, rounded to the nearest 50 points.

In fourth-quarter 2008, the 10, 20 and 30-percent decline levels, respectively, in the DJIA will be as follows:

Level 1 Halt
A 1,100-point drop in the DJIA before 2 p.m. will halt trading for one hour; for 30 minutes if between 2 p.m. and 2:30 p.m.; and have no effect if at 2:30 p.m. or later unless there is a level 2 halt.

Level 2 Halt
A 2,200-point drop in the DJIA before 1:00 p.m. will halt trading for two hours; for one hour if between 1:00 p.m. and 2:00 p.m.; and for the remainder of the day if at 2:00 p.m. or later.

Level 3 Halt
A 3,350-point drop will halt trading for the remainder of the day regardless of when the decline occurs.

Background:
Circuit-breakers are calculated quarterly. The percentage levels were first implemented in April 1998 and are adjusted on the first trading day of each quarter. In 2008, those dates are Jan. 2, April 1, July 1 and Oct. 1.

Contact: Mirtha Medina
Phone: 212.656.6192
Email: mmedina@nyx.com

www.nyse.com/press/122...


]]> Sun, 05 Oct 2008 17:43:00 -0400
NEW YORK , September 30, 2008 -- The New York Stock Exchange will implement new circuit-breaker collar trigger levels for fourth-quarter 2008 effective Wednesday, October 1, 2008.

Circuit-breaker points represent the thresholds at which trading is halted marketwide for single-day declines in the Dow Jones Industrial Average (DJIA). Circuit-breaker levels are set quarterly as 10, 20 and 30-percent of the DJIA average closing values of the previous month, rounded to the nearest 50 points.

In fourth-quarter 2008, the 10, 20 and 30-percent decline levels, respectively, in the DJIA will be as follows:

Level 1 Halt
A 1,100-point drop in the DJIA before 2 p.m. will halt trading for one hour; for 30 minutes if between 2 p.m. and 2:30 p.m.; and have no effect if at 2:30 p.m. or later unless there is a level 2 halt.

Level 2 Halt
A 2,200-point drop in the DJIA before 1:00 p.m. will halt trading for two hours; for one hour if between 1:00 p.m. and 2:00 p.m.; and for the remainder of the day if at 2:00 p.m. or later.

Level 3 Halt
A 3,350-point drop will halt trading for the remainder of the day regardless of when the decline occurs.

Background:
Circuit-breakers are calculated quarterly. The percentage levels were first implemented in April 1998 and are adjusted on the first trading day of each quarter. In 2008, those dates are Jan. 2, April 1, July 1 and Oct. 1.

Contact: Mirtha Medina
Phone: 212.656.6192
Email: mmedina@nyx.com

www.nyse.com/press/122...


]]> http://seekingalpha.com/article/98560-america-needs-a-turnaround-plan?source=feed#comment-274137 274137 www.rgemonitor.com - free registration - and some very good quality discourse in the RGE Content: Weekly Roundup.

]]> Sun, 05 Oct 2008 15:30:41 -0400 www.rgemonitor.com - free registration - and some very good quality discourse in the RGE Content: Weekly Roundup.

]]> http://seekingalpha.com/article/98560-america-needs-a-turnaround-plan?source=feed#comment-274039 274039 Sun, 05 Oct 2008 13:19:39 -0400 http://seekingalpha.com/article/98481-bailout-bill-passes-what-happens-now?source=feed#comment-273872 273872
www.youtube.com/watch?...]]> Sun, 05 Oct 2008 09:45:21 -0400
www.youtube.com/watch?...]]> http://seekingalpha.com/article/98526-tarp-is-just-the-beginning-barron-s?source=feed#comment-273791 273791 Sun, 05 Oct 2008 08:24:36 -0400 http://seekingalpha.com/article/98526-tarp-is-just-the-beginning-barron-s?source=feed#comment-273782 273782
online.barrons.com/art...]]> Sun, 05 Oct 2008 08:13:44 -0400
online.barrons.com/art...]]> http://seekingalpha.com/article/98481-bailout-bill-passes-what-happens-now?source=feed#comment-273491 273491
blogs.wsj.com/marketbe.../]]> Sat, 04 Oct 2008 14:05:21 -0400
blogs.wsj.com/marketbe.../]]> http://seekingalpha.com/article/98477-iceland-when-too-big-to-fail-becomes-too-big-to-rescue?source=feed#comment-273444 273444
www.rgemonitor.com/rou...]]> Sat, 04 Oct 2008 12:05:43 -0400
www.rgemonitor.com/rou...]]> http://seekingalpha.com/article/98481-bailout-bill-passes-what-happens-now?source=feed#comment-273390 273390
Here's the Roubini link again - it is a must read

www.rgemonitor.com/rou...]]> Sat, 04 Oct 2008 10:54:17 -0400
Here's the Roubini link again - it is a must read

www.rgemonitor.com/rou...]]> http://seekingalpha.com/article/98481-bailout-bill-passes-what-happens-now?source=feed#comment-273369 273369
Financial and Corporate System is in Cardiac Arrest: The Risk of the Mother of All Bank Runs (published Oct. 3)

www.rgemonitor.com/rou...]]> Sat, 04 Oct 2008 10:20:57 -0400
Financial and Corporate System is in Cardiac Arrest: The Risk of the Mother of All Bank Runs (published Oct. 3)

www.rgemonitor.com/rou...]]> http://seekingalpha.com/article/98442-how-banks-hedge-counterparty-risk?source=feed#comment-273205 273205
www.cnbc.com/id/158402...]]> Fri, 03 Oct 2008 22:34:33 -0400
www.cnbc.com/id/158402...]]> http://seekingalpha.com/article/98459-the-die-is-cast?source=feed#comment-273194 273194
www.cnbc.com/id/158402...

]]> Fri, 03 Oct 2008 22:21:08 -0400
www.cnbc.com/id/158402...

]]> http://seekingalpha.com/article/98254-iyk-consumer-goods-offer-value-for-investors?source=feed#comment-272129 272129
A one hour interivew of Warren Buffett by Charlie Rose - October 1, 2008. (The bail out will make money if you buy at market)

video.google.com/googl...

If the above link does not work try this one

www.charlierose.com/gu...

]]> Thu, 02 Oct 2008 17:43:15 -0400
A one hour interivew of Warren Buffett by Charlie Rose - October 1, 2008. (The bail out will make money if you buy at market)

video.google.com/googl...

If the above link does not work try this one

www.charlierose.com/gu...

]]> http://seekingalpha.com/article/98303-the-blue-chip-cycle?source=feed#comment-272125 272125
A one hour interivew of Warren Buffett by Charlie Rose - October 1, 2008. (The bail out will make money if you buy at market)

www.charlierose.com/gu...

If the above link does not work try this one

video.google.com/googl...]]> Thu, 02 Oct 2008 17:41:21 -0400
A one hour interivew of Warren Buffett by Charlie Rose - October 1, 2008. (The bail out will make money if you buy at market)

www.charlierose.com/gu...

If the above link does not work try this one

video.google.com/googl...]]> http://seekingalpha.com/article/98323-think-of-these-as-short-term-troubles?source=feed#comment-272114 272114
video.google.com/googl...

If the above link does not work try this one

www.charlierose.com/gu...

I wonder how much toxic paper his companies are stuck with?]]> Thu, 02 Oct 2008 17:29:27 -0400
video.google.com/googl...

If the above link does not work try this one

www.charlierose.com/gu...

I wonder how much toxic paper his companies are stuck with?]]>