Interview with an investment banker

Just in case you missed it. Investment bankers bet and speculate. In other words they are making money with money. When the banking world was about to collapse because the bet on packets of junk bonds, and were about to be caught out on it they changed their tack. They now bet and speculate on […]

ING suspends NZ funds’ payouts because of turmoil

The New Zealand arm of Dutch financial group ING said on Wednesday it was suspending withdrawals from two investment funds worth $521 million because of the global credit market turmoil. It said the funds – the diversified yield and regular income – invested largely in credit securities, which had been hard hit by the subprime […]

Countrywide Falls to 13-Yr Low on FBI Probe Reports

NEW YORK (Reuters) – Countrywide Financial Corp (CFC.N: Quote, Profile, Research) shares dropped 14 percent to a 13-year low on Monday following reports the largest U.S. mortgage lender was being investigated by the FBI for possible securities fraud. The decline in the stock came even as Bank of America Corp (BAC.N: Quote, Profile, Research), the […]

The Federal Reserve’s rescue has failed

The verdict is in. The Fed’s emergency rate cuts in January have failed to halt the downward spiral towards a full-blown debt deflation. Much more drastic action will be needed.   The Federal Reserve building in Washington Read more from Ambrose Evans-Pritchard ‘Ninja’ loans explode on sub-prime frontline The latest news and views on the […]

After subprime debacle, U.S. wrestles with question of bank bailouts

John Key was working for banks who were at the forefront of those who developed these fantastic new financial innovations. He worked for the Bankers Trust; one of the first banks that started to experiment with these funky new “securitized investment vehicles”. In fact while working for Merrill Lynch he worked for a while as […]

Another finance company hits wall

A 15th finance company has hit the wall and is asking its debenture holders to vote on a 20-month wind down to stop it from going to the receivers. New Zealand property finance firm MFS Boston, an indirectly owned subsidiary of troubled Australian firm MFS, announced the moratorium proposal yesterday and will hold a meeting […]

Wall St. Banks Confront a String of Write-Downs

Wall Street banks are bracing for another wave of multibillion-dollar losses as the crisis that began with subprime mortgages spreads through the credit markets. In recent weeks one part of the debt market after another has buckled. High-risk loans used to finance corporate buyouts have plummeted in value. Securities backed by commercial real estate mortgages […]

The fall of the Dollar Empire

The following is an interview with Hamid Varzi an economist and banker based in Tehran about the US economic crisis:Q.Please tell us more about the 2007 subprime mortgage financial crisis and why, how and when it began? A.The crisis began in 2000 with Bush Jr.’s election that re-established the irresponsible “Supply Side” and “trickle-down” economic […]

The Mother of All Rip-offs. “Get Ready For A Real Hosing”

By Mike Whitney  11/02/08 “ICH” — — Low interest credit and “financial innovation” are a deadly-combo. They’ve knocked the banking system for a loop, clogged the credit markets with billions of dollars of subprime sludge, and left the real estate market sprawling on the canvas. Still—even though $2 trillion of capitalization has been wiped-out from falling […]

Who is John Key?

Special report on National leader John Key By GILLIAN TETT and RUTH LAUGESEN – Sunday Star Times | Sunday, 03 February 2008 FIRST LIFE: As a money trader in London it’s speculated John Key was earning $5 million a year – that’s $96,000 a week. AdvertisementHe used to work hand in glove with the foreign […]

The Mortgage Mogul and His Victims

As banks, money markets and stock exchanges convulse over a sinking American economy, we see the folks sprawled at the bottom of the smoking rubble — debt-crushed American consumers. It is they whose reckless or trusting natures enriched so many, at least for a while, and whose troubled loans have sent markets into panic. But […]

Udate: US recession fears wipe £77bn from London shares

London’s FTSE 100 fell to an 18-month low as markets took a dim view of President Bush’s plan to fight off a US downturn Patrick Hosking and Leo Lewis About £77 billion was wiped from UK blue chip share values this morning as fears of a US recession reverberated around the globe, sending the FTSE […]

Chinese shares close more than 5% lower

    BEIJING, Jan. 21 (Xinhua) — Chinese shares plunged more than 5percent on Monday, as investors dumped stocks amid liquidity concerns sparked by the huge share sale plan of Ping An Insurance.     The benchmark Shanghai Composite Index, which covers both A and B shares, tumbled 266.08 points, or 5.14 percent, to 4,914.44, while the Shenzhen Component […]

Shares suffer biggest fall since 9/11

The FTSE 100 on Monday suffered its biggest one-day fall since the attacks on the World Trade Centre more than six years ago as the worst fears about the prospects for the global economy took hold. In a tumultuous session, the index was down as much as 5.7 per cent to 5,571.0 as dealers capitulated […]

Stocks fall after Bush announces stimulus plan

Wall Street resumed its downward trek Friday as skittish investors, unable to hold on to much optimism about the economy, drew little comfort from President Bush’s stimulus plan. Investors had already pulled back from a big early gain, with the major indexes trading mixed as Bush began to speak. By the time the president finished […]

Bernanke: Juice the economy ‘quickly’

NEW YORK (CNNMoney.com) — Federal Reserve Chairman Ben Bernanke told Congress Thursday that legislators should enact a fiscal stimulus package in order to help beleaguered consumers as recession fears grow. The comments by Bernanke, who testified before the House Budget Committee, came as a cascade of more bad news about the housing, financial and manufacturing […]

Subprime Litigation Wave Hits Merrill Lynch

Investors undoubtedly were angry after Merrill Lynch announced on October 24, 2007 (here) that the company’s 3rd quarter results included “write-downs of $7.9 billion across CDOs and subprime mortgages, which are significantly greater than the incremental $4.5 billion write-down Merrill Lynch disclosed at the time of its earnings pre-release.” The $3.4 billion write-down increase less […]

Citi Loses Almost $10B, Slashes Dividend

 largest quarterly deficit in its 196-year history, and slashed its dividend and 4,200 jobs as it recorded a mammoth write-down for bad bets on the mortgage industry.The nation’s largest bank wrote down the value of its portfolio by $18.1 billion. It also boosted loan-loss reserves by $4.1 billion, signaling further problems in its consumer businesses […]

Subprime lender to file for bankruptcy

NEW YORK (AP) — Friedman Billings Ramsey Group’s mortgage lending arm, First NLC Financial Services, will file for bankruptcy protection and plans to liquidate because demand among investors for home loans has vanished, the investment bank said Monday. First NLC Financial Services, which FBR bought in February 2005 for $100.8 million, plans to file for […]

US subprime lenders targeted blacks, poor: report

WASHINGTON (AFP) — US mortgage lenders targeted minorities and people with low incomes in recent years as the “best candidates” for subprime home loans, with devastating economic consequences, a report claimed Tuesday. The report by the United for a Fair Economy (UFE) advocacy group said subprime mortgages, home loans issued to Americans with scant finances, […]

Housing: A Fresh Jolt of Bad News

Getty Images In case you were still harboring a tiny bit of optimism about the U.S. housing sector, just take a look at a couple of headlines from Jan. 8. KB Home (KBH) President and Chief Executive Officer Jeffrey Mezger said in a conference call with investors that he sees “no sign” that the sinking […]

‘Shocking’ sales results from M&S deepen fears of recession in UK

Pressure mounts for rate cut; Forward sales slump at Persimmon; UK economy ‘vulnerable’ By Sean O’Grady, Economics Editor and Nikhil Kumar Published: 10 January 2008 Fears of a consumer recession hit stock marketsyesterday after Marks & Spencer’s third-quarter trading results were described as “shocking” by analysts, while the influential World Economic Forum warned that the UK […]

US credit crisis pushes up NZ mortgages

The US credit crunch has finally hit New Zealand home-buyers directly in the form of rising mortgage rates. Westpac yesterday raised its fixed rate mortgages by 20 points, taking its two-year fixed rate from 9.4 per cent to 9.6 per cent. The increase matches moves by New Zealand’s largest bank, ANZ National, within the last […]

Top economist says America could plunge into recession

From The Times December 31, 2007 Suzy Jagger in New York Losses arising from America’s housing recession could triple over the next few years and they represent the greatest threat to growth in the United States, one of the world’s leading economists has told The Times. Robert Shiller, Professor of Economics at Yale University, predicted […]