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Goldman and Morgan Stanley: Banks of Choice - Barron's

Can't help but note the sell off on MS and GS the first trading day after Barrons' report. Maybe a little buy on the rumor, sell on the news? Always makes me wonder if some financial writers hold a story till some institution gives them the go ahead to publish so that they can sell into the story. But maybe I'm being too conspiracy minded. Its hard in a bear market.

The AIG Bailout: Why Was the Onus Placed on Taxpayers?

It looks pretty unlikely that under the best of circumstances, we will only not owe quite as much as we do now on AIG loans. AIG has businesses to sell, and some with actual tangible assets, but a lot of others hold a great portion of their value in intangibles that are dissolving before our eyes. Consider the CEO's argument for paying out bonuses to those same executives that over-exposed AIG in the CDS market? There isn't much fear that Goldman is going to be calling on those guys. How attractive does AIG derivatives trading department look on their resume anyway. These guys will be following the tried and true career path of so many others that fail in business. They'll teach. Who is really going to want to buy this talent, or this business?

America's Banks: Are They Really Insolvent?

It seems to me that there might be a place or way to suspend mark to market for certain fixed income assets such as mortgage backed securities and instead utilized a cash flow model at least for a specified period of time. This would buy time for a true accounting of each mbs thus providing a higher degree of transparency which should result in better liquidity within that market. Its the lack of transparency of the mortgage back market that has dried up bids for these securities. Of course, there are defaulted loans but if all is revealed, the securities will be judged on true cash flow analysis and not fear of bad loans.
I mean lets face it. Its something like this or we can just borrow a few hundred billion only so we can hang onto an accounting measuring stick that can bust us if securities should face a suddenly challenged with liquidity problems.

TARP Accountability: Bankers Say 'What, Me Sorry?'

I forgot to add the Federal Reserve to my list of who to blame.

TARP Accountability: Bankers Say 'What, Me Sorry?'

I believe there is blame to go around from the bankers, to mortgage companies, to rating agencies, to Fannie and Freddie, to the Clinton Administration, to the Congress, to home buyers, to European banking, to Bush, to the SEC.
Today, we have one guilty party asking another guilty party to confess up. Being that Congress specifically will use any statement as fodder to support their own denial of any responsibility, why should bankers help Congress mislead?

What Should a 'Bad Bank' Pay?

The problem is what the alternative might be. Currently, the government is throwing around the idea of putting the ratings in the hands of regulators. That means government. These are the same people that opened the door to Fannie Mae and Freddie Mac holding exponentially more sub prime slime and alt a mortgages than they had ever owned in the past. These are the same people that blocked the oversight of the GSEs so that low income homeowners wouldn't be shut out of homeownership. Do you think the government would do a more effective job?


On Feb 03 09:35 AM Larrysyr wrote:

> How did these securities ever earned a AAA rating? I think that
> S&P's (and Moody's and Fitch's) track record in rating MBS disqualifies
> them from having any hand in evaluating the current worth of these
> securities. On this one, the market has spoken ... and we should
> listen.

Scrooge, aka Taxpayer, Heads for Wall Street

The payroll system on Wall Street can sometimes be quite troubling. They don't earn their income like the average Joe. They get a salary but it isn't what attracted them to the industry. Its the year-end bonus that provides them with the necessary incentive to produce. If they eliminate the year-end bonus, Wall Street firms would be less productive. Now some would reason that would have been good considering what kind of production they have been doing the last few years, and I'll give you that. But if they were operating under a union contract much as the UAW has its union members, we would be in the same place but for different reasons. Productive vs. nonproductive.
Yet still, a case must be made for those that weren't at all involved in credit default swaps or the packaging of mortgage backed securities. Anyone involved in these divisions of production deserve no bonus, but for those involved in divisions that were profitable, should they not be rewarded accordingly? And what do we say about the firms that were forced to accept government investment. They weren't all willing participants. Should they be treated in the same way?