Here is what I am looking at today this morn:

No News Is Good News From the FOMC (Barron’s)

How America let banks off the leash (FT)

4 Big Mortgage Backers Swim in Ocean of Debt (NYT)

Out from under TARP, banks are now free to fail again (Washington Post)

WaMu filing: JPMorgan had inside info (Portland Business Journal)

Credit Suisse’s Secret Deals (WSJ)

Gold Buying by Central Banks May Send Signal to Sell (Bloomberg)

What are you reading?

Category: Financial Press

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

27 Responses to “Morning Bank Reads”

  1. Henny Sender says:

    Distressed debt on the wane in US markets
    http://www.ft.com/cms/s/0/a013765c-e9af-11de-9f1f-00144feab49a.html

    Distressed debt – defined as a bond trading at less than 50 cents on the dollar – is rapidly disappearing from US financial markets as yield-hungry investors push up the prices for even the most beaten-down securities.

    Bonds trading at less than 50 cents on the dollar now account for only 1.1 per cent of the high-yield market, or $8.9bn in securities, down from 27.5 per cent, or $202bn in bonds, a year ago, according to JPMorgan data

  2. Marcus Aurelius says:

    WaMu/JPM:

    Criminal collusion between the government and and a powerful, uber-wealthy corporation? Who’d a thunk it?

    Regardless of the quantity and quality of evidence presented, this will never result in justice or social equity being served. The accused are defendant and judge. The plaintiff and the people don’t stand a chance.

  3. constantnormal says:

    I’m just marveling at the USD index, as it closes in on its 200 day moving average at a ferocious clip.

  4. Moss says:

    I suppose the Swiss banks are also doing God’s work.

  5. ZackAttack says:

    Stimulus v1.5:

    http://www.reuters.com/article/idUSN1613145520091217

    That works out to $250K per police officer, $100K per teacher. Sounds like utter bullshit to me.

  6. jc says:

    IMO CITI mgmt wants to grab one more big payout and let the the devil take the hind quarter. They screwed current shareholders, Treasury and US taxpayers (with the tax deal they got) – the only beneficiaries are mgmt with bonus restrictions lifted. CITI will be back for more US money
    # Citi’s embarrassing share sale. Citigroup ( C) confirmed late Wednesday it priced a massive 5.4B share sale at $3.15, generating net proceeds of $17B. The Treasury, which was slated to sell $5B in stock concurrently, shelved its plans after pricing was lower than the $3.25/share it paid, extended the lock-up period on its 7.7B share stake to 90 days from 45, and said it expects to exit its stake over the coming 12 months. Analysts said the disappointing showing casts doubt on the wisdom of Citi’s rush to exit TARP; Dick Bove called it “a terrible deal for shareholders,” and said it proves the interests of Citi’s management team (removing pay restrictions) are not aligned with those of shareholders. Shares –8.1% to $3.17 premarket.

  7. David W says:

    A Prozac Economy Has Its Costs
    http://online.wsj.com/article/SB126098814255094121.html

    A tantalizing question arises in profound debates about the nature of the human mind: If Van Gogh or Mozart had been on Prozac, would they have been spared the agony of depression or would the world have been denied their great art?

    The financial crisis and ensuing deep recession raise an analogous question. Do we face a choice: A dynamic, volatile economy with painful episodes like the recent one to get faster long-run growth in living standards versus a more stable economy with fewer crises but also slower growth over time?

    If we could find the economic equivalent of Prozac — a cocktail of “financial stability” overseers, tighter restraints on banks, wise government rule to prevent market excesses — would it bring a calmer prosperity or a less prosperous calm?

  8. jc says:

    Mission accomplished.The management teams at the Big 4 banks have escaped their bonus restrictions and offloaded enormous amounts of mortgage related liabilities to GSEs.

    Free money from the Fed and flexible accounting have allowed them to show profits but they ain’t out of the woods yet and they’ll be back for more US bucks.

    The US taxpayers will be paying for this corporate welfare for at least a generation. Actually the blanket US guarantee for the Immortal 19 is MORAL HAZARD in sky writing.

    Looks like the ins cos are going to follow their banking bretheren down the same path of US guaranteed profits via government supported fleecing of US consumers & taxpayers.

    I think the DEms are outdoing the Repubs as friends & handmaidens of big business

  9. This looks interesting — maybe its time to redo the kitchen . . .

    A User Guide to Cash-for-Appliance Programs
    http://bucks.blogs.nytimes.com/2009/12/15/a-guide-to-cash-for-appliance-programs/

    Now may be a good time to consider buying that new refrigerator, clothes washer or dishwasher.

    Last summer, as part of the American Recovery and Reinvestment Act stimulus plan, the Department of Energy announced that up to $300 million in federal aid would be given to states to run rebate programs encouraging consumers to replace their old appliances with new energy-efficient ones.

    Under the “State Energy Appliance Rebate Program,” otherwise known as Cash for Appliances, each state was allocated an amount based on its population. States were then supposed to determine qualifying products, set rebate amounts and submit their program plans to the Department of Energy for approval by Oct. 15, with the aim of starting the rebates by the end of this year and early next year.

    In recent weeks, as the Department of Energy has approved many of the programs, details of the state offerings have started to emerge. By Tuesday, 51 of the 56 states and territories had won approval for their plans and received their money, according to a spokeswoman for the Department of Energy.

    New York Appliance Rebates
    http://www.energysavers.gov/financial/rebates/state_NY.cfm

  10. Scott F says:

    This is disturbing:

    Rising Partisanship Sharply Erodes U.S. Public’s Belief in Global Warming http://www.nytimes.com/cwire/2009/12/03/03climatewire-rising-partisanship-sharply-erodes-us-public-47381.html

    On the eve of major international climate change negotiations in Copenhagen, belief in global warming in the United States has slipped to the lowest point in 12 years of measuring, according to a poll from New York-based Harris Interactive Inc.

    As U.S. negotiators fly to the Danish capital to forge a political agreement based on President Obama’s proposal to cut U.S. greenhouse gas emissions by about 17 percent, most of the American public doesn’t know what the talks are about, according to the Harris survey. Just 51 percent of adults questioned said they believed carbon dioxide and other greenhouse gases would cause the Earth’s average temperature to increase. Two years ago, fully 71 percent of respondents linked greenhouse gases directly to global warming.

    The Harris results follow polls in recent months from the Pew Research Center for the People & the Press, the The Washington Post and ABC News, and The Wall Street Journal and NBC showing a similar decline in the percentage of people who believe climate change is real and is caused by emissions from fossil fuels.

    The dramatic 30-percentage-point drop over two years in the Harris poll is the starkest indicator yet that belief in climate change has plummeted in a short amount of time. The shift in numbers since 2007 came from a 15-point percentage increase from those saying they “are not sure” about the cause of climate change.

  11. jc says:

    While politicians grandstand about breaking up the TBTF banks the O’Bama admin is providing huge tax breaks for mergers that make them ever bigger and solidify their places in the TBTF hierarchy. Meanwhile no financial reform.

    The power to tax is the power to destroy and every enormous tax break given to the banks and banksters shifts the burden onto us proles.

    How did we end up in the position where both major parties are falling all over themselves to prop up a handful of banks at the expense of everyone and everything else? We let 2/3 of the suto industry go into BK but not GMAC – a front for a sleazy third rate mortgage issuer (Ditech)

  12. Scott F,

    what is “disturbing” about that?

    I would think that being able smell B******t, you know, for a Change, would be seen as (thx. Martha) “a good thing”.

  13. Scott F says:

    Sorry Mark, without even discussing the Science or the disinformation campaign funded by Exxon Mobil —

    Do we really want people making major decisions based on emotion and partisanship? Isn’t rational facts and intelligent debate a better part of the democratic decision making apparatus?

    Instead, we have what has devolved to a very disingenuus battle.

  14. Canada: Housing market has big cracks

    It is probably a real estate bubble that will eventually burst – two years after the rest of the world

  15. Henry says:

    How To Make The World’s Easiest $1 Billion
    http://www.businessinsider.com/henry-blodget-how-to-make-the-worlds-easiest-10-billion-2009-12

    With all the banks paying back the TARP money, some folks are assuming that the great Wall Street bailout
    is finally coming to an end.

    But of course it isn’t!

    Taxpayers are still guaranteeing all big bank bonds (Too Big To Fail) and subsidizing huge bank earnings and bonuses with absurdly low interest rates.

    But instead of bellyaching about it, you might as well just smile and cash in. After all, that’s what Wall Street’s doing.

    So here’s how to make the world’s easiest $1 billion:

  16. jc says:

    The housing market here at the Jersey shore seems to have bottomed and turned around. The market peaked early, in late ’05. The area here is largely built up, not many empty lots and the teardown phenomena seems to have returned. I think builders feel land costs are low enough for them to turn a profit and I think the banksters are sticking their toes in the second home market. 100% subjective observations

  17. Scott F,

    w/this: “Do we really want people making major decisions based on emotion and partisanship? Isn’t rational facts and intelligent debate a better part of the democratic decision making apparatus?”

    “Do we really want people making major decisions based on emotion and partisanship?”

    to which ‘side’ are you referring?

  18. Stimulate This says:

    Most 2008 Stimulus Checks Were Saved, Not Spent
    http://blogs.wsj.com/economics/2009/12/16/most-2008-stimulus-checks-were-saved-not-spent/

    Most Americans saved their 2008 stimulus checks and only about a third of consumers spent them, new academic research suggests.

    Work by the Federal Reserve’s Claudia R. Sahm and University of Michigan’s Joel B. Slemrod and Matthew D. Shapiro confirms their earlier speculation that households saved most of the $96 billion that was allotted for one-time stimulus payments designed to boost consumer spending.

    “Overall, the results suggest that the rebate program provided only a modest stimulus per dollar of rebate,” the researchers state. “Nonetheless, the rebates were so large and so quickly disbursed and the fraction spent was spent so rapidly that they had a non-trivial effect on aggregate spending in the second and third quarters of 2008.”

  19. Jessica6 says:

    @Scott F – don’t want to turn this into a climate change thread but some of the ‘leaked’ emails refer to teaming up with Shell, etc. – there’s plenty of evidence that ‘Big Oil’ supports the alarmist side if you’re willing to look.

    But this is the reason I came to this thread:

    S&P puts 1.46 Trillion euros of covered bonds on watch

    http://www.forbes.com/feeds/reuters/2009/12/16/2009-12-16T190111Z_01_LDE5BF1Y5_RTRIDST_0_COVERED-BONDS-S-P-UPDATE-3.html

    S&P said 98 covered bond programmes would be put on credit watch as a result of its new ratings system.

    The bonds have relatively short maturities, but the pool of underlying mortgages backing them are usually 25-30 years.

    Isn’t borrowing short and lending long usually a recipe for disaster??

  20. mknowles says:

    “@David W wrote: If we could find the economic equivalent of Prozac — a cocktail of “financial stability” overseers, tighter restraints on banks, wise government rule to prevent market excesses — would it bring a calmer prosperity or a less prosperous calm?”
    ~~~~~~~~~~~~~~~~~~~~~~~
    Prozac is one solution. The French chose the guillotine.

  21. wunsacon says:

    >> How America let banks off the leash

    This makes me want to channel my inner Dennis Green:

    “Citibank is who we *thought* they were. And WE let them off the hook!”

  22. TripleB says:

    Spendthrift to Penny Pincher: A Vision of the New Consumer

    http://online.wsj.com/article/SB126100996572894719.html?mod=article-outset-box