Things Haller is Reading

"It’s fine to tell people about hope and change, but you have to have plenty of concrete, pragmatic..."

Sat, 16 Aug 2008 12:38:39 -0500

““It’s fine to tell people about hope and change, but you have to have plenty of concrete, pragmatic ideas that bring hope and change to life.””

- Allies Ask Obama to Make ‘Hope’ More Specific - NYTimes.com

"Perhaps the biggest factor behind the recent 18% drop in the price of a barrel of crude is sinking..."

Mon, 04 Aug 2008 21:51:46 -0500

“Perhaps the biggest factor behind the recent 18% drop in the price of a barrel of crude is sinking North American demand. Federal Highway Administration data show the number of miles driven in the U.S. dropped from year-ago levels for the seventh straight month in May.”

- Lower oil prices: a mixed blessing - Aug. 4, 2008

"The first wave of Americans to default on their home mortgages appears to be cresting, but a second,..."

Sun, 03 Aug 2008 22:37:07 -0500

“The first wave of Americans to default on their home mortgages appears to be cresting, but a second, far larger one is quickly building.”

- Housing Lenders Fear Bigger Wave of Loan Defaults - NYTimes.com

"Cheap oil, the lubricant of quick, inexpensive transportation links across the world, may not return..."

Sun, 03 Aug 2008 13:55:40 -0500

“Cheap oil, the lubricant of quick, inexpensive transportation links across the world, may not return anytime soon, upsetting the logic of diffuse global supply chains that treat geography as a footnote in the pursuit of lower wages. Rising concern about global warming, the reaction against lost jobs in rich countries, worries about food safety and security, and the collapse of world trade talks in Geneva last week also signal that political and environmental concerns may make the calculus of globalization far more complex.”

- Shipping Costs Start to Crimp Globalization - NYTimes.com

"Macro investors are torn between two views: We’re in something like the 1970s or we’re..."

Fri, 01 Aug 2008 13:34:11 -0500

““Macro investors are torn between two views: We’re in something like the 1970s or we’re in something like the 1930s,” said Christopher Watling, head of London-based research firm Longview Economics, referring to the two worst periods of economic pain in the last century.”

- Bloomberg.com: Exclusive

"But if the newfound caution of American banks is prudent in the long run, the immediate impact is..."

Tue, 29 Jul 2008 12:54:00 -0500

“

But if the newfound caution of American banks is prudent in the long run, the immediate impact is amplifying the troubles with the economy. The Federal Reserve has been lowering interest rates aggressively to make money flow more loosely and to spur economic activity.

The financial system is not going along: As banks hold on to their dollars, mortgage rates are climbing. So are borrowing costs for corporations.

”

- Worried Banks Sharply Reduce Business Loans - NYTimes.com

"Oil prices fell harder than they have in 17 years Tuesday, as fears that record fuel prices are..."

Tue, 15 Jul 2008 16:30:04 -0500

“Oil prices fell harder than they have in 17 years Tuesday, as fears that record fuel prices are spreading broad economic pain exacerbated the third big sell-off in just over a week.”

- Oil prices plummet over $6 amid economic fears: Financial News - Yahoo! Finance

"Q: How can I make sure my money is safe? A: All deposit accounts worth $100,000 and less are..."

Mon, 14 Jul 2008 20:55:22 -0500

“Q: How can I make sure my money is safe? A: All deposit accounts worth $100,000 and less are automatically insured by the FDIC. Many retirement accounts, such as IRAs and 401(k)s, are insured to $250,000 per person. But since it’s a person’s aggregate deposits, and not their individual accounts, that are insured, any amounts over $100,000 deposited at any one bank are not covered.”

- What if my bank fails? Some questions and answers

"Second, the housing bubble was immense; see the figure above, taken from the always excellent..."

Sun, 13 Jul 2008 14:03:45 -0500

“Second, the housing bubble was immense; see the figure above, taken from the always excellent Calculated Risk. Fannie and Freddie only guaranteed conforming loans — loans that weren’t that big, didn’t have exotic financial features, and required a substantial downpayment. But so what? If real prices of houses in places like LA return to historical norms — and there’s no reason to think they won’t — many, many borrowers with conforming loans will end up with big negative equity anyway, and this in turn will produce a lot of defaults. This crisis is a long way from being over.”

- Fannie, Freddie, Sweden, Japan - Paul Krugman - Op-Ed Columnist - New York Times Blog

"FHA loans are bundled into mortgage-backed securities by the Government National Mortgage..."

Sun, 13 Jul 2008 14:01:17 -0500

“FHA loans are bundled into mortgage-backed securities by the Government National Mortgage Association. Ginnie Mae mortgages, unlike those securitized by Fannie Mae and Freddie Mac, carry the full faith and credit of the U.S. government. So, while fears about the capital adequacy of Fannie Mae and Freddie Mac are dominating the marketplace, the expansion of FHA, either through administration diktat (FHASecure) or congressional legislation, poses a direct risk to us, the taxpayers.”

- Bloomberg.com: Opinion

"All over the word, slowly but surely, the state is becoming exposed to the debts and liabilities of..."

Sun, 13 Jul 2008 12:20:21 -0500

“All over the word, slowly but surely, the state is becoming exposed to the debts and liabilities of the finance system. We’ve seen it here with Northern Rock - and with the Bank of England’s special liquidity scheme, and with the expanded deposit guarantee. The words “too big to fail” - once uttered as a joke, about a theoretical situation in the dining rooms of the investment banking world - have now been elevated into a philosophy. The strange thing is it’s being done on the watch of governments committed to removing the state from the economy. It is being done, in other words, in defiance of the official ideology of governments, regulators, banks, business schools, accountancy firms, TV pundits, Nobel prizewinners and nearly every think tank on earth.”

- Grasping Reality with Both Hands: The Semi-Daily Journal Economist Brad DeLong

"U.S. banking regulators swooped in to seize mortgage lender IndyMac Bancorp Inc (IMB.N) on Friday..."

Sat, 12 Jul 2008 14:40:20 -0500

“U.S. banking regulators swooped in to seize mortgage lender IndyMac Bancorp Inc (IMB.N) on Friday after withdrawals by panicked depositors led to the third-largest banking failure in U.S. history.”

- IndyMac seized as financial troubles spread - Yahoo! News

"To put that in perspective, had you invested $10,000 on inauguration day in an index fund that..."

Sat, 12 Jul 2008 12:10:27 -0500

“To put that in perspective, had you invested $10,000 on inauguration day in an index fund that tracked the DJIA, it would be worth $8,568 today in inflation-adjusted 2001 dollars, compared to only $8,175 had you simply stuffed that money in a mattress. What with no bottom in sight to the housing, banking, automotive and other industries, and one of the largest bank failures in US history making headlines yesterday, that mattress is beginning to look like a pretty savvy investment. Our Republican administration on the other hand… not so much.”

- Better than Hoover a mattress

"Even in a world of six-figure salaries, bankers report an atmosphere of unhappiness. Fifty-eight..."

Fri, 11 Jul 2008 18:22:40 -0500

“Even in a world of six-figure salaries, bankers report an atmosphere of unhappiness. Fifty-eight percent of people working in banking and finance say they have seen someone cry as a result of stress at work, according to an nfpSynergy report for the Samaritans, a confidential help line that fields more than 13,000 calls daily, 20 percent from suicidal people. The industry was recently ranked last in the City & Guilds Happiness Index, based on a survey of 2,000 people in 20 professions. Beauty therapists were first.”

- Bloomberg.com: Exclusive

"Congress ought to be embarrassed” for years of delays in passing legislation aimed at..."

Fri, 11 Jul 2008 16:33:43 -0500

““Congress ought to be embarrassed” for years of delays in passing legislation aimed at strengthening regulation of the two companies, Snow, now chairman of New York-based buyout fund Cerberus Capital Management LP, said in a telephone interview. He said he suggested when in office that “the business model they were using was really the model of a hedge fund.’”

- Bloomberg.com: Worldwide

"A government takeover of one or both companies is among several options that have been considered by..."

Fri, 11 Jul 2008 09:47:51 -0500

“A government takeover of one or both companies is among several options that have been considered by White House officials, Joshua Rosner, an analyst at Graham Fisher & Co., said after meetings with administration officials. The U.S. is reluctant to step in before Fannie Mae and Freddie Mac, which own or guarantee about half the $12 trillion in home loans outstanding, exhaust their options for raising capital, according to Rosner and U.S. Representative Spencer Bachus of Alabama.”

- Bloomberg.com: Worldwide

"Rice tied the first round of the Iranian missile tests to U.S. plans for a future missile shield,..."

Thu, 10 Jul 2008 10:44:56 -0500

“Rice tied the first round of the Iranian missile tests to U.S. plans for a future missile shield, which would theoretically protect Eastern Europe from missiles launched from Iran. The system would place radar interceptors in the Czech Republic, a former Soviet satellite, and missiles in Poland. That has drawn protests from Russia, who says that’s uncomfortably close. Such a missile defense system “will make it more difficult for Iran to threaten and be bellicose and say terrible things, because their missiles won’t work,” Rice said.”

- Rice says US won’t back down; Iran fires back

"The major issue is that these are very leveraged financial institutions, leveraged much more than..."

Thu, 10 Jul 2008 10:13:16 -0500

““The major issue is that these are very leveraged financial institutions, leveraged much more than any other bank, and they have lots of mortgage assets. As real estate values decline every day, the value of [the mortgages that it bundles, guarantees, and sells] are called into question,” says Dalton Investments co-founder Steve Persky, who has been focused on distressed mortgage assets. The possibility of government aid looms because it’s hard to see how the private market can help the companies. Their stock market values have dropped so low that it would be difficult for them to raise money. For example, Egan estimates that Freddie alone will need to raise $7 billion over the next two quarters due to writedowns and losses. But the company’s market capitalization - the number of outstanding shares times the share price stands at $8.7 billion. “An investment banker would be hard pressed to raise an amount of money nearly equal to the value of the entire company,” Egan says.”

- The Fannie and Freddie doomsday scenario - Jul. 9, 2008

"The foreclosure problem is getting worse and will stay with us well into the next decade,”..."

Thu, 10 Jul 2008 09:58:07 -0500

““The foreclosure problem is getting worse and will stay with us well into the next decade,” Mark Zandi, chief economist for Moody’s Economy.com in West Chester, Pennsylvania, said in an interview. “The job market is eroding and homeowners have less equity. Lenders are much less willing to work with you if you’ve got negative equity, and you’re more likely to give up your house if you’re deeply underwater.””

- Bloomberg.com: Economy

"The mission concurred with the authorities on the need to tighten monetary policy in order to stop..."

Wed, 09 Jul 2008 23:44:50 -0500

““The mission concurred with the authorities on the need to tighten monetary policy in order to stop and, then, reverse the increase in underlying inflation. It welcomed the central bank’s recent decisions to increase its policy rate, but stressed the need to raise interest rates further in the period ahead. It also welcomed the submission to congress of a bill to recapitalize the central bank. A prompt and substantial recapitalization of the central bank would increase the effectiveness of monetary policy.””

- IMF Concludes Staff Visit To Costa Rica