Market Commentary


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 ( 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 […]

Tim Geithner’s Speech and Plan

Author: David Kotok, Post Date: February 10, 2009

Markets do not initially like Geithner’s comments.   There are good reasons.    He gave only sketchy details that would help clarify the program.  His speech was purposefully vague.   Markets and the country want clarity, transparency and reliability.   Instead. they got promises it would be forthcoming but they did not get facts and details that would […]

The EMU versus the Global Recession

Author: Bill Witherell, Post Date: February 9, 2009

The European Economic and Monetary Union (EMU) and its common currency, the euro, and single central bank, the European Central Bank (ECB), were created with the primary objective of achieving economic stability in Europe. January 1, 2009 marked the 10th anniversary of the introduction of the euro. Broadly speaking, a high degree of macroeconomic stability […]

It Isn’t That Hard

Author: Bob Eisenbeis, Post Date: February 6, 2009

The FDIC on January 27 proposed a change in the restrictions on interest rates that institutions that are “less than well capitalized” may pay on deposits to prevent moral hazard behavior by zombie institutions.  The notice of the proposed change goes on to note that “(T)he proposed rule applies only to the small minority of […]

Maiden Lane Losses

Author: Bob Eisenbeis, Post Date: February 3, 2009

As we contemplate the prospects for more government support for financial institutions, it is useful to reflect on what lessons we can now glean from the performance of the portfolio the Federal Reserve acquired in assisting the acquisition of Bear Stearns by JPMorgan Chase through its sponsored LLC, Maiden Lane.  At the hearings following the […]

Managing Inflation Expectations and Motivating Economic Growth by Joseph R. Mason

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

The term “liquidity trap” originated with John Maynard Keynes in 1936 with the publication of his seminal work: “The General Theory of Employment, Interest, and Money.”   Essentially a liquidity trap occurs when expansive monetary policy fails to stimulate the economy. Keynes wrote about when bond interest rates were so low that fear of an impending […]

Pondering Madoff as you Choose Auditors by

Author: Jack Blumenthal, Post Date: January 31, 2009

Friehling & Horowitz was the accounting firm that supposedly performed the audits of Bernie Madoff’s alleged Ponzi apparatus. The report of due diligence done by an investigator from Aksia helped steer that company clear of doing business with Madoff. Their recommendation was based, in part, on the findings about the Madoff’s auditor. As part of […]

2008 Muni Madness: The Movie

Author: John Mousseau, Post Date: January 30, 2009

“Education is what’s left after everything learned at school has been forgotten.” – Albert Einstein It was that type of year in tax-free municipal bonds, as most of the assumptions that investors and portfolio managers have made for years were thrown up in the air.  We are completing a year which has seen high-grade municipal […]

Today’s Fed Statement

Author: David Kotok, Post Date: January 28, 2009

Excerpt from today’s Fed statement: “The focus of the Committee’s policy is to support the functioning of financial markets and stimulate the economy through open market operations and other measures that are likely to keep the size of the Federal Reserve’s balance sheet at a high level. The Federal Reserve continues to purchase large quantities […]

Why Secretary Geithner’s China Comments Matter

Author: Bob Eisenbeis, Post Date: January 27, 2009

Treasury Secretary Geithner’s comments at his confirmation hearing and subsequent responses to written questions from Senators have provoked surprise and consternation here, in China, and around the world.  His comments went far beyond his own personal views when he stated that the Obama administration believes that the Chinese government has engaged in currency manipulation.  Why […]

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