Fed Rate Bump Today’s leading financial stories are: a) the Federal Reserve’s apparently surprise decision to raise interest rates on short-term bank borrowing; and b) the market’s reaction to same (playing out now). My take? The action itself is relatively trivial: hiking rates on some arcane, overnight interest rate from .5% to .75% (yes, that’s...Read More
Revisiting “Capped Upside, Unlimited Downside” [Note to Readers: this post originally ran Christmas Week, when it was read by . . . no one. In the wake of Barney Frank’s announced plan to abolish Fannie Mae and Freddie Mac, I’m “popping” it to the top of the list.] If you lend someone 97 cents to...Read More
Dear Barney: Read This! Imagine Ted Kennedy, before he died, admitting that the health care reform bill was a mess and that everyone should start over. Or John McCain saying that campaign finance laws were unworkable, and should be scrapped (actually, the Supreme Court just said that). So it’s big news when Congressman Barney Frank,...Read More
Best Time to Bury a Story? X-Mas Eve The U.S. Treasury said it would provide capital as needed to Fannie Mae and Freddie Mac over the next three years, effectively opening its checkbook to the government-controlled companies in a bid to reassure investors in their debt. Treasury announced the moves in a Christmas Eve press...Read More
“Surge” or “Stay the Course?” Depleted and demoralized by the huge sums it has already spent (and arguably squandered) trying to stabilize a still-hostile environment, the U.S. must decide its next move. The three choices are to: 1) double down (“surge”); 2) “stay the course”; or 3) declare victory and get out. U.S. forces in...Read More
Hemorrhaging at FHA FHA runs low on cash, fueling bailout concerns. –Headline, The Boston Globe (11/13/09) Here we go again. First come the rumors of funny accounting and huge, buried losses. Then come the vehement denials from company executives. Finally, the truth comes out: the critics are vindicated, the losses are toted up, the discredited...Read More
