The Minneapolis Federal Reserve Bank has published a working paper disputing the conventional wisdom on the credit crisis… they attack four specific fallacies… very worthwhile to review…
Bank lending to nonfinancial corporations and individuals has declined sharply.
Interbank lending is essentially nonexistent.
Commercial paper issuance by nonfinancial corporations has declined sharply, and rates have risen to unprecedented levels.
Banks play [...]
Near the end of the Civil War Union forces beseiged Petersburg, VA for 9 months. Confederate forces could barely find food to eat. Starving, with their numbers dwindling due to desertions, and with Sherman’s forces approaching from the south, Lee attempted a break out.
It failed miserably, and on April 2nd, Union forces soon assaulted the Confederate lines. The [...]
Chart from Naked Capitalism…
Would a doctor prescribe massive blood transfusions… or… a heart transplant… or… a pacemaker?
But of course the problem is more complex…
The global money center banks are not lending to each other… individuals are withdrawing cash from the system… everyone is liquidating assets that can be converted to cash…
As others have said… mark assets [...]
From Bobsguide…
~~~~ “Kamakura Corporation announced Thursday that it has dramatically expanded the ability of the Kamakura Risk Manager enterprise risk system to calculate and display the risks of each transaction on the balance sheets of major financial institutions.
The enhanced transfer pricing capabilities in Kamakura Risk Manager Version 7.0 allow major financial institutions and corporations to [...]
Securities trading parsed out academically… from a staff report recently published by the New York Federal Reserve…
~~~~ “Liquidity is sometimes defined as a coordination phenomenon.
In financial markets, as investors move into a specific market they facilitate trade for all investors by reducing the cost of participating in this market.
At the same time, easier trade and lower trading [...]
It is an odd feeling to observe the current credit crisis as the various firms and institutions fail and reform themselves…
We see a tension between the old system and the demands and exigencies of today…
Lehman Brothers has failed in the largest bankruptcy ever…
Bank of America is buying Merrill Lynch…
The tide has flowed out on AIG and [...]