Market Commentary

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AIG: What It Means?

Author: David Kotok, Post Date: March 2, 2009

The news on AIG of additional federal funds and a change in the structure of the preferred stock and its implications have rattled the securities markets.  We are scheduled to discuss this tonight on National Public Radio (NPR), “All Things Considered” and on CNBC in the 8:10 p.m. segment and, subsequently, in the 8:45 p.m. […]

Citigroup: Who Has the Pea?

Author: Bob Eisenbeis, Post Date:

Last Thursday the US Treasury agreed to convert $25 billion of TARP Series H Preferred Stock into common equity at an exchange price of $3.25 per share.  The stated goal of this exchange was to increase the bank’s Tangible Common Equity and thus ensure more investor confidence in the institution’s long-term prospects.  This transaction is […]

Stress Tests: What They Mean and Don’t Mean

Author: Bob Eisenbeis, Post Date: February 26, 2009

Much attention was given this week to the upcoming stress tests that the Treasury and the banking agencies are sponsoring for the nation’s 19 largest banking institutions.  How much faith should we have in the results?  The answer is “it depends.”  It depends upon how well the required models are constructed and how well they […]

Housing Affordability Plan

Author: Bob Eisenbeis, Post Date: February 24, 2009

The Obama Administration has announced its Homeowner Affordability and Stability Plan (HASP).  What problems are these efforts attempting to address?  And how significant are they likely to be in addressing the current problems in the housing market? HASP is a very limited plan with a large price tag. It is directed primarily towards helping two […]

Primary Dealers

Author: Bob Eisenbeis, Post Date: February 17, 2009

The Federal Reserve is reportedly in negotiations to expand its shrunken list of Primary Dealers.  Who are these firms?  What do they do?  Why are they important? Each day the Federal Reserve enters financial markets to adjust the amount of Federal Funds (deposit balances of banks with the Federal Reserve) outstanding to keep the rate […]

The G7 and the Global Recession

Author: Bill Witherell, Post Date: February 16, 2009

The finance ministers and central bank governors of the G7 countries (Japan, Germany, Britain, France, Italy, Canada, and the US) met in Rome Saturday to discuss how best to tackle the global economic crisis, the worst that has been experienced in decades. This was the first G7 meeting for Tim Geithner since he became Treasury […]

Does Fair Value Accounting + Credit Default Swaps = Global Deflation?

Author: Christopher Whalen, Post Date: February 11, 2009

This article will appear in the upcoming issue of HousingWire Magazine (www.housingwire.com) The US housing market continues to reel under the double weight of asset price deflation on the supply side, which is making banks reluctant to lend, and shrinkage of consumer demand for financing.  The good news is that the decline in existing home […]

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