Politicians in Germany do their best to make the Greek crisis worse–and it looks like they're succeeding
It ought to be Rule No. 1 for any effort to fix a financial crisis: Don’t do it during an election. Politicians pandering to voters are likely to make a bad situation worse. Which unfortunately is exactly what’s happening in the current Greek debt crisis. The German...What GM's ads don't say: Taxpayers will take a loss on this bailout
So what about the rest of our money? Today General Motors is running ads patting itself on the back for repaying its taxpayer loans. “We’re proud to announce: We’ve repaid our government loan. In full. With interest. Five years ahead of the original schedule.”...Could Greece turn into another Lehman and take down the world financial system? I'd say No.
The Greek deficit crisis could turn into a Lehman-type event capable of freezing the financial markets, according to a report today from Deutsche Bank. If Greece acts to restructure its debt at the expense of current bond holders, it could cause financial markets to...What's really at stake for banks in the Goldman SEC suit
It might be just coincidence that the SEC filed civil fraud charges against Goldman Sachs (GS) in the midst of a contentious debate in Washington over legislation to reform Wall Street. But it’s sure as God made little green apple no coincidence that the SEC announced...Goldman's "She's just a girl" defense against SEC charges
She doesn’t show up by name in the charges of civil fraud that the SEC has brought against Goldman. But Reuters reported yesterday that emails written by Gail Kreitman, a Goldman Sachs bond saleswoman until June 2009, are cited by the SEC to show that Goldman misled...The Greek debt crisis is back as deficit numbers actually get worse
Greece: It’s not so bad that it can’t get worse. Not exactly the slogan I’d use to rally investors to buy the bonds of a country overwhelmed with debt and deficits, but it’s one that fits the news out of Europe this morning, April 22. According to the statistics...An intelligent guess at who's at risk after the SEC charges Goldman Sachs
Who’s next? Now that the SEC (Securities & Exchange Commission) has filed a civil fraud suit against Goldman Sachs (GS), Wall Street’s favorite game is guessing which big bank the agency might name next. Some of the lists have no credulity at all—they’re simply...The SEC case against Goldman punctures Wall Street's "Act of God" defense–the agency says the global financial crisis was somebody's fault
The SEC (Securities and Exchange Commission) today, April 16, charged Goldman Sachs (GS) with civil fraud. And the whole market has sold off. At 12:30 ET the Dow Jones Industrial Average was down 162 points or 1.45%. The Standard & Poor’s 500 Stock Index was down...China fiddles while real estate market gets ever hotter
I love a good dither. Especially when it’s cloaked in language that makes it sound like decisive action This morning’s headline in the Financial Times reads “Beijing acts over housing bubble.” Sounds like China did something significant to control an inflating asset...Cheap money is the root of all financial bubbles–and it's still at work now
If you’d like to see somebody—lots of somebodies, if I had my wish–go to jail for their role in creating the lob al financial crisis, then $8 million looks cheap. That’s the budget for the Financial Crisis Investigation Commission. If, just for starters, some of...JPMorgan Chase disappoints on loan loss reserves–bank sector earnings pop delayed
I wish I could be as optimistic about the first quarter results posted yesterday by JPMorgan Chase (JPM) as the stock market was. The market apparently focused on the 74 cents a share in earnings—a great big 11 cents a share above Wall Street projections. The stock...Will JPMorgan Chase call the turn in the banking sector tomorrow morning?
For the next couple of days, at least, Jamie Dimon, CEO at JPMorgan Chase (JPM), is the most important figure in the U.S. financial industry. JPMorgan Chase reports earnings tomorrow, April 14, before the stock market opens. The consensus among Wall Street analysts is...The Greek crisis goes on and on an on–with no light at the end of the tunnel
“A default is not an issue for Greece,” Jean-Claude Trichet, head of the European Central Bank, told a press conference in Frankfurt today, April 8. The bond market begs to differ. Greek bonds sold off today bringing the yield premium to benchmark German bonds to...What's on the agenda after healthcare?
While Republicans battled Democrats (and Democrats battled themselves) over healthcare, not much of anything else got done. Not reform of the financial system, not serious action on jobs (the $18 billion “jobs” bill that Congress did pass isn’t even a down payment),...Grim budget fairy tales from Europe
The European Commission took Germany, France, Italy, Spain, and the United Kingdom out back to the woodshed for a financial thrashing yesterday, March 17. Now let’s see if the bond market was paying attention. The bureaucrats in Brussels essentially called the...Get ready for a re-run of the Greek budget crisis
I don’t want to rain on anyone’s parade, but we all know that the Greek budget crisis hasn’t been resolved, right? It’s merely been postponed until April and May. That’s when Greece has to refinance $27 billion in debt. (Doesn’t seem like much? Well, if you scaled...The sovereign debt crisis turns from Greece to the United Kingdom
Everybody hates the pound sterling. As of March 9 the futures market showed a greater proportion of bearish bets against the pound than back in September 1992 when currency traders wagered that the British government wouldn’t be able to defend the pound and keep the...Despite those huge reserves, China could be, gasp, broke
Is China broke? Seems a silly question right? China’s foreign exchanges reserves stood at $2.4 trillion at the end of 2009. Yes, China announced that its proposed annual budget for 2010 would have a record deficit, but the deficit is just $154 billion or 2.8% of...The lesson of the Greek crisis: Every government cheats and no one wants to know
Greece cheated on its national accounts in 2009. And that led to a budget crisis in 2010. But that’s not the important part of the story. What makes this a crisis not just for Greece, and the euro and the European Union is that everyone—from the Greek government and...The bet is that the Euro is headed even lower
Nobody is taking off their bets against the Euro quite yet. Short positions against the Euro on the Chicago Mercantile Exchange, which had set a record in January, set a new record in the three weeks that ended on February 9. And judging from the continued pressure on...Insure your neighbor's house and then burn it down–derivatives played a role in creating the Greek crisis
Credit default swaps are not insurance. The most common way to describe these derivatives is to say that they’re a way to insure bonds and other financial instruments against default. I’ve used that explanation myself over and over again. But as James Rickards...Just a euro bounce on rumors?
Why are European (and global) stock markets and the euro rallying today on vague rumors that there’s a plan to bailout Greece when yesterday similarly vague official statements couldn’t stem the tide? Could it be because today the markets believe what they discounted...Honey, we bankrupted the kids!
Worried that the global financial crisis combined with the Great Recession in the United States has bankrupted not just ourselves but our kids and their kids? Good. You should be worried. Maybe then we’ll do something about the problem before it’s too late. First,...The euro crisis isn't a global crisis–yet
One crisis or two? How you answer that question goes a long way to determining your investment strategy right now. If the euro crisis and the bank lending crisis in China are all part of the same crisis, you should stay out of all equity markets until the world works...The next financial crisis has a name and it's the United Kingdom
It’s one thing when it’s Greece or Portugal. A credit downgrade or warning for those two countries isn’t exactly headline news for most investors. For most of our portfolios these are peripheral markets. Ireland in trouble too? Yawn. Don’t own any Irish stocks. Italy?...China's banks copy Citigroup in hiding bad loans off their balance sheets
Banks are moving loans off their balance sheets in order to dress up their accounts for worried regulators. Only this time it isn’t Citigroup (C) or State Street (SST) that’s involved but China’s big banks. In November China’s banks packaged and then sold $18.6...Greece is the word in today's selling
This shouldn’t have come as a surprise, but apparently enough investors were still not expecting it so that Standard & Poor’s downgrade of its credit rating on Greece has pushed down global stock markets. Today, December 17, S&P cut Greece’s credit rating one...Don't worry about a UK default, Moody's says: Like the U.S., the country is "resilient"
Ah, now there’s a distinction worth making. Moody’s, one of the big three debt rating companies, is continuing to rate the sovereign debt of deeply indebted countries such as the United Kingdom and the United States Aaa. That’s the same top credit rating Moody’s gives...HSBC and Standard Chartered have little to fear from Dubai World
The two bank stocks I like best for their big business in emerging economies don’t look like they’ll take big hits in the Dubai World debt freeze and restructuring. Initial estimates put the exposure of HSBC Holdings (HBC) and Standard Chartered (SCBFF) to the United...Jim’s Daily Email Alerts:
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