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Category Archives: Liquidity

Extend and pretend round II

Ross Levine and Glenn Loury of Brown University argue that the 2007-2009 financial crisis is repeat of the S&L crisis  “extend and pretend” treatment of bank solvency. Expect this to become a meme soon… cause it’s true… And another important critique of extend and pretend at ZeroHedge… a comparison to the Latin debt crisis and […]

Our English cousins lay it out…

The House of Commons Treasury Committee Ninth Report of Session 2009–10 Report, together with formal minutes Ordered by the House of Commons, to be published 22 March 2010 Too important to fail– too important to ignore Summary The banking crisis of the last two years resulted in government support for the sector around the world amounting to almost a […]

Opening muni

Brilliance is so exciting… Welcome to OpenMuni By Philip Ashlock A tool for facilitating collaboration and cataloging case studies, best practices, and standards for open data and open source on the local level. OpenMuni is a resource to spread knowledge and connect localities to better provide open channels of information to improve quality of life, increase […]

Michigan

California bankruptcy ruling a precedent for Detroit Public Schools The Detroit News, July 31, 2009 Detroit — Detroit Public Schools, facing a $259 million deficit and diminishing cost-cutting options, has a recent California court ruling on its side as officials weigh Chapter 9, experts say. Chapter 9, a rarely used form of municipal bankruptcy, could […]

The world is running out of fiscal space

This is what global hot money sounds like… or put differently the “globalization of capital flows”… moving funds between asset classes and currencies to take advantage of changes in valuations and relative returns. Does this type of financial activity add to nation’s wellbeing or does it just represent a “skimming” of a  nation’s productive capacity? […]

Muni market confusion

Bond insurance down to 5% of new issues from 50%… BABs have reduced supply… Are credit ratings to be trusted? Municipal revenues has declined… “We don’t expect the muni market to collapse…”

Via the repo market, real banks came to resemble shadow banks

An excellent review of Yves Smith’s new book “ECONned: How Unenlightened Self Interest Undermined Democracy and Corrupted Capitalism” at Jesse’s Cafe Amercain… There is a very interesting bit about the shadow banking system and repos… of course no one in Washington is talking about this… “…And now we are ready for Chapter 9, where all […]

The more transparent a marketplace, the more liquid it is, the more competitive it is

Transparency creates stability in financial markets… this is a foundational precept of our system but is rarely argued… the following is from a speech by CFTC Chairman Gensler to the “Energy Bar Association” on February 24th… ~~~ Transparent Trading Requirement “… It is not enough, though, simply to promote transparency to the regulators. Financial reform […]

Financial, economic and political linkages

The struggles that Greece is facing  to reform it’s fiscal situation are ones that Portugal, Italy, the UK, California, Illinois, New Jersey and others  will face… substantial debt loads with diminishing revenue sources and large social commitments… we’ll see this story be replayed over and over… and that doesn’t even take into account the potential nuclear […]

Greece’s baby steps and Blanchard’s grand new solution

From Bloomberg: Fitch’s Rawkins says EU failed to ease Greek debt crisis … Mr. Rawkins says about Greece’s fiscal actions … “The problem with all those measures is that they take time…” Yes… when governments make fiscal adjustments it generally takes numerous quarters or years for the effects to have an impact on the economy… (of course […]