Items of Interest:
Subprime Tsunami -- U.S. and European banks have fessed up to massive losses related to subprime mortgage investments, and lots more is likely yet to come. But a major financial center is still missing from the picture--Japan.
To date, only a handful of big institutions there have booked subprime losses...
Geithner Gives Best Explanation in Senate Hearing --
NY Fed chief Timothy Geithner gave the most succinct explanation of what has happened in the banking industry of late. Read it twice. Or three times. As many as it takes.
It is important to understand that investment banks now perform many of the economic functions traditionally associated with commercial banks, and they are also vulnerable to a sudden loss of liquidity. Unlike commercial banks, which rely significantly on deposits for funding, investment banks operate according to a business model in which they fund large portions of their balance sheets on a secured, short-term basis in what is known as the repo market...
Smart Advice for the HuffPost Investor: Investment Pornography -- Are You A Victim? -- "Investment pornography" is generally attributed to the respected financial journalist Jane Bryant Quinn. She defined it in the following quote:
You know the stories: The Top Ten Mutual Funds to Buy Now, How to Double Your Money This Year, personality profiles that read like fan magazines. Stock-touting pieces that praise any path to profits. We've all done these stories, in one form or another. It's investment pornography -- soft core, not hard core, but pornography all the same.I define it as any effort to convince investors that there is a reliable way to "beat the markets." ...
----Skinning the Bear
- How Goldman Sachs Secretly Destroyed Bear Stearns - Henry Blodget, Huffingtonpost
- Meet Alan Schwartz, Welfare Recipient - Dana Milbank, Washington Post
- Liquidity Won't Fend Off Cannibal Banks - Mark Gilbert, Bloomberg
- Making a Case for Bear's Market - Editorial, Wall Street Journal
- Regulatory Failure Behind Bear Stearns Debacle - Floyd Norris, NYT
- Regulating Credit Crisis May Do More Harm Than Good - The Economist
- Questions for the Fed - Andy Laperriere, Wall Street Journal
- JPMorgan All But Locks Up Bear Stearns Vote
- Lender-Abandoned, Non-REO Foreclosures -
- Economic Calamatists Get Some Things Wrong - David Malpass, Forbes
- Bernanke Has Been Anything But Loose - Mike Cosgrove, IBD Editorials
- Easy Credit Fix May Be A Fairytale - Gillian Tett, Financial Times
- Why Financial Panics Are Causing Real Recessions - Gleckman, Am. Prosp.