Posts filed under “Finance”

Bailouts to Banks

Nice interactive table from ProPublica:

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The full list is at ProPublica.

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Source:
Bailout Bucks to Banks
ProPublica, October 29, 2008 1:43 pm EDT

http://www.propublica.org/feature/bailout-bucks-to-banks-1028

Category: Bailouts, Credit, Finance

Campaign Finance Map: Monies Raised by Candidates

Fascinating graph of the candidates money raising this campaign cycle. What is so astounding this election cycle is not that John McCain trails Barack Obama in fund raising, but that he also trails Hillary Clinton: Obama $659.7m, Clinton, $249m, McCain $238.1m. I posted a bunch-o-election related graphs, polls, charts, tables, etc. over in digital media….Read More

Category: Data Analysis, Finance, Markets, Politics

Sending Money to the Wrong Banks

Category: Credit, Finance

Why Banks Have Become Schizophrenic

Category: Consumer Spending, Credit, Finance, Psychology

Bank Dividends ?

Category: Credit, Finance, Psychology

Is Wells Fargo “Sugarcoating” Balance Sheet?

Category: Data Analysis, Finance, Financial Press, Legal

Laid Off By Lehman: One Broker’s Story

Speaking of anecdotal sentiment indicatorsWhat does a Lehman Brothers’ broker do with his days now? Untucked Films found out. Directed by Chuck Divak and Jonathan Emmerling.

OMG, this is hysterical:

Perfect entertainment for a quiet Friday —

Hat tip: themessthatgreenspanmade

Category: Credit, Finance, Markets, Psychology, Video

Bank Earnings Are Fugly !

Category: Earnings, Finance

Will the US Fashion a Smarter Bailout Plan?

So far, we in the US have had an ad hoc, half-assed, on-the-fly approach to resolving the credit and financial crisis.

The smartest bailout approach to date has been the British/Swedish/Buffett approach: Inject capital at a corporate capital structure level by buying preferred stock, rather than at the balance sheet level by buying bad assets.

Now, we read that the Treasury is considering following these other, smarter approaches:

"Having tried without success to unlock frozen credit markets, the Treasury Department is considering taking ownership stakes in many United States banks to try to restore confidence in the financial system, according to government officials.

Treasury officials say the just-passed $700 billion bailout bill gives them the authority to inject cash directly into banks that request it. Such a move would quickly strengthen banks’ balance sheets and, officials hope, persuade them to resume lending. In return, the law gives the Treasury the right to take ownership positions in banks, including healthy ones.

The Treasury plan was still preliminary and it was unclear how the process would work, but it appeared that it would be voluntary for banks.

The proposal resembles one announced on Wednesday in Britain. Under that plan, the British government would offer banks like the Royal Bank of Scotland, Barclays and HSBC Holdings up to $87 billion to shore up their capital in exchange for preference shares. It also would provide a guarantee of about $430 billion to help banks refinance debt."

Sure its a year late, and a trillion dollars short. Yes, this would have saved most of the firms that went belly up.

Better late than never . . .

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UPDATE: October 9, 2008 2:18 pm

The way we have the government buys into a cop-any via prefereds is to match any private sector investment into banks on the same terms. So GE and Goldman Sachs get double the capital injection, and since Warren did it on those same terms, we know Uncle Sam isn’t getting ripped off.   

If you cannot raise dollar one, Uncle Sam doesn’t waste any good money on you.

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UPDATE 2: October 9, 2008 2:40 pm>

Greg Mankiw discusses a similar approach:  How to Recapitalize the Financial System 

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Previously:
5 Historical Economic Crises and the U.S. (February 09, 2008)
http://bigpicture.typepad.com/comments/2008/02/5-historical-ec.html

Global Financial Crises, Part II: Norway 1987 (February 10, 2008)   
http://bigpicture.typepad.com/comments/2008/02/global-financia.html

Sources:
U.S. May Take Ownership Stake in Banks
EDMUND L. ANDREWS and MARK LANDLER
NYT, October 8, 2008
http://www.nytimes.com/2008/10/09/business/economy/09econ.html

 

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Category: Bailouts, Corporate Management, Credit, Derivatives, Finance

Did JPM Cash Call Bring Down Lehman ?

Winston Munn

Category: Bailouts, Credit, Finance