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Tag Archives: defaults

Euro crush

From the brilliant graphics team at the New York Times… ~~~ “Banks and governments in these five shaky economies owe each other many billions of euros — converted here to dollars — and have even larger debts to Britain, France and Germany. Arrow widths are proportional to debt amounts.” ~~~ What is the solution? Haircuts… […]

witness the Romans, who had a constant succession of triumphs while they managed their Government on a certain plan

“It is not chance that rules the world, witness the Romans, who had a constant succession of triumphs while they managed their Government on a certain plan, and an uninterrupted series of reverses when it was conducted on another. There are general causes, either moral or physical, at work in every monarchy, exalting, maintaining or overcoming […]

We’ve stuffed all the problems in the closet…

An unknown Wall Streeter says that Treasury Secretary Geithner and the Obama economic team are the Emperor with no clothes…  if this guy is saying it… everyone is saying it… From Bloomberg… Doug Dachille, chief executive officer of First Principles Capital Management LLC, talks with  Pimm Fox about the U.S. government’s decision to provide additional aid to GMAC […]

Greece, Ireland, Spain, Portugal and Italy…

Willem Buiter, a professor at the London School of Economics and a former Bank of England policy maker, talks with Bloomberg’s Elliott Gotkine about the fiscal situations in Greece and the U.K. They speak in London. (Source: Bloomberg) Given recent default/delay talk from Dubai these wobbly national finances are a significant concern… for bondmarkets it’s […]

Hard times coming… mark to fiction round 2…

BusinessWeek writes: Why This Real Estate Bust Is Different Unrealistic assumptions, layers of investors, sky-high prices, and possible fraud will make it hard to clean up the mess in commercial real estate “When Goldman Sachs (GS) sold complex bonds backed by the Arizona Grand Resort and other commercial properties in 2006, it suggested the returns […]

Inflation and public finance

If governments issue debt that pays a fixed nominal interest level, then it can reduce it’s debt obligations by creating inflation. This is a form of default. Tim Besley, Bank of England and LSE, Making Monetary Policy Work Royal Economic Society lecture (slide 34) November 18, 2008

diversify, stay short and lean toward quality

Bond Investing in a Weak Economy – Analysis and Discussion with Jay Mueller of Wells Fargo (Bloomberg News – running time ~ 5 minutes) Mr. Mueller talks about the potential for inflation and he says about buying muni bonds… “use high diversification, stay short, and lean toward quality…”

Comments on raters

U. S. Securities and Exchange Commission 100 F Street, NE Washington, DC 20549-1090 Attention: Office of the Secretary File No.: S7-04-09; Release No. 34-57967 Re: Comment on Re-Proposed Rules for Nationally Recognized Statistical Rating Organizations (“NRSROs”) To the Commissioners and staff of the SEC: Thank you for the opportunity to provide comments on the regulation […]

10% defaults and 19% yields

Short clip (running time ~ 1:40 minutes) from Bloomberg describing Moody’s view of defaults for speculative grade bonds (Ba1 and lower)… Moody’s sees defaults rising sharply… this was certainly expected when excess liquidity was withdrawn from the economy… So how do investors with big risk appetites swim through the high yield ocean? Good question…