Tag Archives: Financial Crisis

Moral Hazard Everywhere

Here are my talking points for my Fox Business News interview. Watch my interview. Why should all the bailout money be focused on financial institutions? It is seems a matter of fact but no one has really challenged the logic. … Continue reading

Reflecting on the Stress Tests

Most of the reporting on the stress test focused on the number of banks passing the test and the doable amount of capital the failing banks needed to raise. The tough question was not asked: if the stress test wasn’t … Continue reading

Four interviews

Obama scorecard President Obama means well and is doing a great job in many areas. However, I fear that we are perpetuating the same policies of the previous administration when it comes to the financial sector. It is simply not … Continue reading

The Public-Private Investment Voodoo

Image courtesy of AllPosters.com/J. Thompson

Each of the three programs announced by the Secretary of the Treasury today has the same theme: the private investor has a limited downside and a huge upside – the American taxpayer bears almost all the downside and gets shafted … Continue reading

AIG and Faux Transparency

Image courtesy of flickr/John Wardell

AIG disclosed some of the firms that benefited from the government bailout. Essentially, the government money was largely used to pay off other firms. I have a few comments. 1. AIG’s customers were either using AIG for hedging positions or … Continue reading

Hemorrhaging Jobs

The losses are staggering. If the pace of January and February continued through the year, we would lose 8.4 million jobs in 2009. That is unlikely, but it will be ugly. Consider the following facts. The percentage job losses have … Continue reading

That Sinking Feeling

Image courtesy of flickr/David Wild

AIG is back to the trough for another $30 billion. We already gave them $150 billion. AIG — supposedly a firm in the insurance business — got into trouble taking an astounding $450B unhedged bet in the Credit Default Swap … Continue reading

That’s Not a Stress Test

Image courtesy of flickr/Stuart Crawford

We finally got the information on the stress tests. The government will consider two scenarios: baseline and worst case. The goal of the stress test is to see if banks have the capital to weather a darker storm. However, and … Continue reading

The Treasury Fiasco – 3 Video Blogs

Watch on YouTube

Here are three new video blogs. 1) Bank CEOs Testify before Congress Eight bank CEOs appeared before Congress on February 11, 2009 to explain how their institutions used the TARP funds they received in 2008. I comment on their testimony … Continue reading

Fragile International Banks

The international banking system is at great risk in the current environment. This week Fortis shareholders rejected a takeover offer. This puts the whole country of Beligium at risk. Fortis’ assets are more than 200% of the GDP of Beligium. … Continue reading