Anatomy of a balance sheet recession (in flowchart)
Four Boston Fed economists are debunking the paper that was debunking four myths on the credit crisis (the sentence starting with Casey Mulligan...). Zubin Jelveh compares summarizes both papers' views on the four myths. Mark Tahoma has pasted the abstract, the overview and conclusion, but if you want to read the whole thing (which isn't that long BTW), it's here.
Technical reasons to feel good on the US stock market.
Calculated Risk has an estimate for US mortgage equity withdrawals (MEW), an often-0verlooked data sometimes coined as the home ATM, for obvious reasons. Note that as Calculated Risk argues in an excellent earlier post, the relationship between MEW and consumption is not clear-cut.
As it is no longer in doubt that the US is in a recession, the relevant questions have become how severe will the recession be and what shape.
I've been seeing a lot of discussion on AIG's failure lately. While most discussions had centered on collateral calls (similar to margin calls that would have happened if the CDSs were traded in an exchange, so for AIG having an exchange would not have avoided this issue) and mark-to-market pricing- for a layman's introduction to these, see the recent Businomics blog. Financial Armageddon reports on a WSJ article, which goes over a third reason: Modelling failure. Maybe, it's neither; my own theory is that Ronaldo's injury has got to do something with it...:)
Speaking of models, NYT has an article on the role of risk models and financial innovation in general on the crisis.
Calculated Risk reports that both supply (tightening lending standards) and demand (weakening loan demand) can be seen in the latest Senior Loan Officer Survey.
Paul Kedrosky lists the top 20 CDSs by net exposure. While Turkey barely missed the top 10, it's nummero uno in terms of gross and number of contracts. While I am no CDS expert, this hints that most Turkey CDSs offset each other, but other than this, which is barely stating the obvious, I cannot explain Turkey's gross/net ratio of nearly 25, which is way bigger than others on the list. Any takes? BTW, the data is from Depository Trust and Clearing Corporation (DTCC) web site (data updated weekly). Yves smith has more on the data, especially the coverage of DTCC.
Four Boston Fed economists are debunking the paper that was debunking four myths on the credit crisis (the sentence starting with Casey Mulligan...). Zubin Jelveh compares summarizes both papers' views on the four myths. Mark Tahoma has pasted the abstract, the overview and conclusion, but if you want to read the whole thing (which isn't that long BTW), it's here.
Technical reasons to feel good on the US stock market.
Calculated Risk has an estimate for US mortgage equity withdrawals (MEW), an often-0verlooked data sometimes coined as the home ATM, for obvious reasons. Note that as Calculated Risk argues in an excellent earlier post, the relationship between MEW and consumption is not clear-cut.
As it is no longer in doubt that the US is in a recession, the relevant questions have become how severe will the recession be and what shape.
I've been seeing a lot of discussion on AIG's failure lately. While most discussions had centered on collateral calls (similar to margin calls that would have happened if the CDSs were traded in an exchange, so for AIG having an exchange would not have avoided this issue) and mark-to-market pricing- for a layman's introduction to these, see the recent Businomics blog. Financial Armageddon reports on a WSJ article, which goes over a third reason: Modelling failure. Maybe, it's neither; my own theory is that Ronaldo's injury has got to do something with it...:)
Speaking of models, NYT has an article on the role of risk models and financial innovation in general on the crisis.
Calculated Risk reports that both supply (tightening lending standards) and demand (weakening loan demand) can be seen in the latest Senior Loan Officer Survey.
Paul Kedrosky lists the top 20 CDSs by net exposure. While Turkey barely missed the top 10, it's nummero uno in terms of gross and number of contracts. While I am no CDS expert, this hints that most Turkey CDSs offset each other, but other than this, which is barely stating the obvious, I cannot explain Turkey's gross/net ratio of nearly 25, which is way bigger than others on the list. Any takes? BTW, the data is from Depository Trust and Clearing Corporation (DTCC) web site (data updated weekly). Yves smith has more on the data, especially the coverage of DTCC.
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