Posts filed under “Finance”

How Over-Extended is FDIC Insurance ?

Very.

At least, that’s according to Rolfe Winkler’s analysis of the Depositor Insurance reserve ratio:

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Rolfe:

[Look at] FDIC’s 12/31/08 balance sheet. Note at the bottom of that link the estimate for total insured deposits: from Q3 to Q4 it increased only a smidge, to $4.8 trillion from $4.6 trillion. Odd, no?  Why such a small increase even though FDIC dialed up deposit insurance limits so significantly during Q4?  FDIC Senior Banking Analyst Ross Waldrop told me during an interview last week that it’s because so-called “temporary” increases in deposit insurance are excluded.  If included, these would boost total insured deposits from $4.8 trillion to $6.2 trillion.

FDIC’s total commitments would increase an additional $224 billion to $6.4 trillion if you include debt issued prior to the new year under FDIC’s “Temporary” Liquidity Guarantee Program.*

In early October, FDIC boosted deposit insurance limits for individual non-retirement accounts to $250k, which, according to Waldrop, added $713 bilion to total insured deposits.  He also noted that new insurance on non-interest bearing transaction accounts added $684 billion to the total.

Shorter version: A trillion and a half in additional guarantees should have a whole lot more in reserves.

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Source:
FDIC’s Insurance Commitments 34% Higher Than Reported
Rolfe Winkler
Option Armageddon, April 6, 2009 – 4:00 am

http://optionarmageddon.ml-implode.com/2009/04/06/fdics-insurance-commitments-34-higher-than-reported/

Category: Bailouts, Credit, Finance

Goldman Sachs, Morgan Stanley vs Rivals

> Source: Resurrection on Wall Street ANDREW BARY Barron’s March 16, 2009 http://online.barrons.com/article/SB123698562029125353.html

Category: Bailouts, Digital Media, Finance

iBanks Grabbed $50 Billion in AIG Bailout Cash

Yesterday, in Backdoor Bailouts for Goldman Sachs?, we noted that GS, as well as Morgan Stanley, Merrill Lynch, and Deutsche Bank, were all made whole on their bad bets with AIG. That’s right, what was misleadingly described as systemic risk turned out to be in large part little more than a counter-party bailout — money…Read More

Category: Bailouts, Corporate Management, Finance, Legal, Markets, Politics, Really, really bad calls

Failings in Structured Finance Agency Conflicts

As we begin to address regulatory reform in the financial services industry there is a clear consensus view that the credit rating agencies played a role in fomenting the crisis environment. In February 2007, Joe Mason and I presented a paper warning of the risks that CDO market problems would present in the capital markets…Read More

Category: Credit, Derivatives, Finance, Markets, Real Estate, Really, really bad calls, Research

Volcker Urges More Transparency in Hedge Funds/Private Equity

Live! From Capitol Hill: Former Fed Chairman Paul Volcker Testifies in Front of Senate Banking Committee

Bloomberg, February 05, 2009

Category: Finance, Video

Blame the Enablers

I couldn’t agree with this article more: Madoff Enablers Winked at Suspected Front-Running. I look at Madoff as a Sociopath — he is a sick individual. The enablers, on the other hand, were simply greedy hacks who didn’t, (and probably couldn’t) do the suitable investigation and due diligence into Madoff’s asset management business. Were they…Read More

Category: Finance, Investing, Legal, Regulation

Nationalize Like Real Capitalists

Steve Randy Waldman writes the blog interfluidity. His take is usually away from the mainstream, and always interesting. His most recent discussion on Bank Nationalization is quite interesting ~~~ It will come to no surprise of readers of this blog that I favor nationalization of failed, systemically important banks. But James Surowiecki and Floyd Norris…Read More

Category: Bailouts, BP Cafe, Credit, Finance

Selling Banks’ Crown Jewels

Analysis and Discussion with Ben Phillips of Casey Quirk & Associates

Category: Finance, M&A, Video

Niall Ferguson on Colbert Report

Niall Ferguson explains money as a relationship between a creditor and a debtor

Category: Economy, Finance, Video

Madoff’s Investors Had $43 Billion

via Bloomberg:

Client                   Total          Source

Access International     $1.4 billion   Company statement,
Advisors                                Bloomberg Data

Alicia Koplowitz,        $14 million    Bloomberg News
One of Spain’s richest
women

Aozora Bank Ltd.         12.4 billion   Company statement
                         yen ($137
                         million)

Bard College             $3 million     Bloomberg News
 Read More

Category: Digital Media, Finance, Legal