Market Commentary

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Hans Christian Anderson and Vladimir Putin

Author: David Kotok, Post Date: August 19, 2008

Tivoli Gardens’ pleasantries are brightened by the warming sunshine in this western Baltic nation.  It finally stopped raining.  Three flavors of herring and a cold beer will mask geo-political and financial concerns if you allow it to happen.  Five and a half million Danish citizens live on their four hundred island nation, enjoy the fruits […]

Primary Dealers and Their Loss Experience

Author: Bob Eisenbeis, Post Date: August 18, 2008

Bianco Research periodically has published a compilation of the losses that have accumulated in major banks and investment banks as a result of the so-called subprime crisis. (1) When Chairman Bernanke hinted in his July 12, 2007 Congressional testimony that losses might reach $100 billion, this seemed alarmingly large.  But the Bianco data now show that […]

Joseph Stalin plus 75 (years) = Vladimir Putin

Author: David Kotok, Post Date: August 15, 2008

Seventy-five years ago another Soviet thug by the name of Stalin chased a food supply and starved the Ukraine. He killed between 7 and 10 million people and thought nothing of it. In an ironic quirk of history, Stalin was born in Gori, Georgia. We now say “Ukraine” and not “the” Ukraine because Ukraine is […]

Russia Enters Georgia – Cumberland Exits Russian Stocks

Author: Bill Witherell, Post Date: August 13, 2008

The Russian economy, fueled by energy and commodity exports, registered impressive growth of 8.1% in 2007 and is on its way to over 7% this year and probably in 2009 as well.  The Russian stock market as measured by the DAX Global Russia Index (DXRPUS) advanced by 40% in 2007, and as recently as June […]

Auction Rate Securities (ARS) and a new Fed ‘Maiden Lane 2’. Also, Cleveland: ‘hold your water.’ And more on fishing weekend in Maine

Author: David Kotok, Post Date: August 10, 2008

The Auction Rate Securities (ARS) market saw big news this week as Merrill Lynch, UBS, and Citigroup settled about $30 billion in claims and agreed to pay investors by buying back their frozen paper over the next several months.  Each settlement has its own time period and terms. The theme is nearly the same in […]

Fishing and Forecasting

Author: David Kotok, Post Date: August 6, 2008

Intermittent rain didn’t dampen the spirits of the attendees at the annual fishing, economic, and financial retreat.  This year’s was the largest gathering ever. CNBC’s Steve Liesman added to the enthusiasm with the live coverage that started on Squawk Box Friday morning and carried on to other shows during the day.  Steve and his producer, […]

Sliced Bread or Double Dipping? More on Covered Bonds

Author: Bob Eisenbeis, Post Date: July 30, 2008

In what is now proving to be an unrelenting series of initiatives on the part of both Treasury and Congress to channel more funds into housing, no matter what the costs or risks to taxpayers, Treasury has put out a “Best Practices” guide with the aim of stimulating the market for covered bonds.1  A previous […]

Celebrating the Anniversary of the Credit Crunch in Maine

Author: David Kotok, Post Date: July 29, 2008

We have officially started year 2 of the credit crunch.  Some could argue that the actual start was in late May or June of 2007 when the first signs of widening credit spreads were observed.  In real time that was a difficult conclusion to reach since those early warning signs then were within the normal […]

How Safe is Your Bank?

Author: David Kotok, Post Date: July 25, 2008

In 1790, Edmund Burke, the founder of Anglo-American conservatism, waxed eloquently about the power and responsibilities of a government’s agencies in a democracy.  He said: “To execute laws is a royal office; to execute orders is not to be king.  A political magistracy, though merely such, is a great trust.”  This warning came before there […]

Are Covered Bonds the Answer?

Author: Bob Eisenbeis, Post Date: July 24, 2008

In yet another effort to resuscitate the mortgage market (remember the Super SIV?), Secretary Paulson is now urging that a market be created for covered bonds.  What are covered bonds?  They are a German creation dating back to the late 1700s.  A bank-issued, covered bond is an obligation backed by an interest in a pool […]

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