Tag Archives | US Treasury

Brexit poll creates UK, euro interest rate rise risk

Financial markets are very bad at evaluating political risk.  They assume people will always be rational, and expect a ‘business as usual’ scenario to continue.  But as we all know, people are not always rational.  And emotion, as today over immigration may cloud their judgement. This week has seen the first signs of this complacency […]

Continue Reading
US mortgages Feb11.png

US heads towards New Normal for housing markets

Major changes are underway in Western housing markets. They are generational in nature, meaning that we are starting to see a New Normal develop in terms of future demand patterns for chemicals and polymers. The past 30 years have seen Western leaders committed to the concept of a ‘property-owning democracy’. Both US President Reagan and […]

Continue Reading
Josh Frost.png

The $600bn man

In October 2008, the blog featured the US Treasury official responsible for running the $700bn TARP rescue fund. He was 35 years old, and just 6 years out of business school. Apparently there was nobody available with more experience to take on the role of “choosing which US financial institutions live, and which die“, during […]

Continue Reading
BoE.png

Bank of England endorses New Normal

The Bank of England has become the first major central bank to endorse the argument that we are moving towards a ‘New Normal’. In an important speech this week, its Governor Mervyn King, set out the argument that we can look forward to: “a SOBER decade – a decade of Savings, Orderly Budgets, and Equitable […]

Continue Reading
Kanjorski right.jpg

Congress ends ‘mark to market’

Last month, the blog supported former US Treasury Secretary Brady’s argument that ‘mark to market’ accounting rules were helping to worsen the current financial crisis. It therefore welcomes the decision by the US Financial Accounting Standards Board to revise its rules with effect from April 2. It applauds Paul Kanjorski, chair of the relevant House […]

Continue Reading
US Treasury left.jpg

“Nobody there” at the US Treasury

The UK’s most senior civil servant, Sir Gus O’Donnell said yesterday that the UK government was struggling to organise next month’s G-20 meeting because of the “absolute madness” of the US system, whereby “a new administration had to hire new officials from scratch, leaving a decision-making vacuum”. O’Donnell added that “there is nobody there. You […]

Continue Reading
James Baker left.jpg

Another US Treasury Secretary speaks out

James Baker was Treasury Secretary to President Reagan. When he says that the US is “repeating Japan’s mistake by viewing our banking crisis as one of liquidity and not solvency”, the blog listens. His prescription is stark: “we should divide the banks into 3 groups – the healthy, the hopeless and the needy”. And he […]

Continue Reading
Brady right.jpg

The man with a plan

Yet again, as in October, ‘buy on the rumour, sell on the news’ has been the financial markets’ reaction to the latest efforts to solve the financial crisis. A 5% fall on Wall Street last night, in response to the Geithner plan, tells its own story. The blog is also unconvinced that this further $2.5 […]

Continue Reading

One rule for banks, another for manufacturers

The excellent Gretchen Morgenson makes a good point in her New York Times column today. As she puts it, “here in Bailout Nation, you’ll be surprised to learn, some of us are more equal than others”. Her argument is that Congress is operating to double standards. Last week, it refused to support $14bn of lending […]

Continue Reading
Zombie.jpg

AIG becomes a “zombie” company

2 months ago the blog raised 5 key questions about the $700bn US bailout. Yesterday’s news about additional government funding for insurance giant AIG confirms its concerns. Originally, the US Treasury had insisted it would only support “healthy” firms. Now, this fiction has been abandoned. After AIG announced its 4th straight quarterly loss ($24.5bn), its […]

Continue Reading