Market Commentary


The Global Bear Market in Equities

Author: Bill Witherell, Post Date: July 23, 2008

Before last week’s rebound, with few exceptions, equity markets around the globe had registered declines in excess of 20%, the magnitude commonly considered to indicate a “bear market.”  The convergence in market performance is striking. Over the period between the markets’ peak reached on October 12, 2007, and the low point of July 15 last […]

‘IndyMac: Who’s to Blame for What?’

Author: Bob Eisenbeis, Post Date: July 21, 2008

Last Monday witnessed the reopening of IndyMac under the management and receivership authority of the Federal Deposit Insurance Corporation (FDIC). Photos of lines formed by anxious depositors appeared in numerous news accounts and triggered widespread concern about the safety of depositor funds. (1) IndyMac’s regulator, the Office of Thrift Supervision (OTS), closed the institution on […]

Tax-free Bond Opportunity: A VRDN Case Study

Author: John Mousseau, Post Date: July 20, 2008

Since early in 2008 there has been much congestion and volatility in the short-term tax-exempt bond market.  This has been due to the failure of the short-term auction-rate market, specifically the backup in yields in the variable-rate demand-note (VRDN) market caused by market aversion to downgraded insurers, the abject failure of auction markets of student […]

What Next for Freddic Mac and Fannie Mae?

Author: Bob Eisenbeis, Post Date: July 17, 2008

The Treasury has proposed to Congress that it be granted “temporary” authority to extend virtually an unlimited line of credit to Freddie Mac and Fannie Mae and to also purchase their equity.  Additionally, the Federal Reserve Board has also granted authority to the Federal Reserve Bank of New York to provide them access to the […]

About Paulson’s Statement

Author: David Kotok, Post Date: July 12, 2008

Excerpts from Treasury Secretary Paulson’s Statement (Published: July 13 2008, 6 PM) About Fannie and Freddie with inserts of Cumberland’s Observations. Treasury Secretary Paulson.  “In recent days, I have consulted with the Federal Reserve, OFHEO, the SEC, Congressional leaders of both parties and with the two companies to develop a three-part plan for immediate action. […]

Fannie and Freddie

Author: David Kotok, Post Date: July 11, 2008

Let’s try to sculpt some of the fog swirling around the Fannie Mae and Freddie Mac (F&F) issues.  First some facts: 1. Under present rules the Fed is already specifically authorized to purchase F&F debt for its own account. view history No change in rule or law is needed.  As of the most recent Fed […]

TAF, Fallacy of Composition, Report from Singapore

Author: David Kotok, Post Date: July 8, 2008

Our July 2 commentary about the Fed’s Term Auction Facility (TAF) and banks (see: ) triggered a banker’s response.  He argued that the 9-basis-point premium that banks paid in the latest TAF auction is justified because of the desire of each bank not to be known as one that borrows at the Discount Window.  […]

TAF Results and Banks

Author: David Kotok, Post Date: July 2, 2008

If you look at the most recent reports of the Federal Reserve, you will see that loans and investments in the US banking system are contracting.  Northern Trust’s Paul Kasriel notes that this is the “sharpest 13-week contraction” in the history of this data series.  The Fed’s measure started in 1973.  Contracting credit is an […]

Financial Turmoil moves G7 to Decisive Action

Author: Bill Witherell, Post Date: April 14, 2008

The Finance Ministers and Central Bank Governors of the Group of Seven industrialized countries met Friday, April 11, in Washington D.C. as is the established practice before the annual meetings of the IMF. Very often the public statements released at the conclusion of such G-7 meetings are highly predictable, containing support for established policies, papering […]

Investing in Emerging Markets- Will the Boom Continue in 2008?

Author: Bill Witherell, Post Date: January 7, 2008

2007 was the fifth consecutive year that emerging market stocks registered a double–digit advance. They significantly outperformed US and other advanced markets. The broad MSCI (Morgan Stanley Capital International) Emerging Markets Index increased by 36.5%. This compares with an advance of 10.6% for the MSCI Europe Index and is almost 9 times the 4.1% advance […]

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