Category Archives: bonds and loans

Stanford’s Darrell Duffie is giving a series of lectures at Princeton on capital immobility, which will be turned into a book to be published by Princeton University Press. The Press invited me to dinner with Duffie last night – delicious, … Continue reading →

Alan Greenspan is not a fan of The Entity. It’s not trying to bail out some troubled firm, he says: rather, it’s trying to artificially support an entire asset class. Which might not be a bright idea: Greenspan argued that … Continue reading →

Mohamed El-Erian and Bill Gross will, as of January, both hold the title of chief investment officer at bond giant Pimco. Few firms have as much money as Pimco tied up in short-term debt instruments like the ones issued by … Continue reading →

Yves Smith is pessimistic about the prospects for this proposed superconduit. (The press is all over the story this morning: you can start with the NYT, FT, WSJ, and Bloomberg, although there’s much more where that came from; that said, … Continue reading →

Do you remember when Dave Neubert bought shares in Countrywide because they were only a little bit rich to book value? That didn’t work out too great. But now he’s back to the single-indicator trade, and is buying the Morgan … Continue reading →

All that money has to go somewhere, right? I asked in September what was going to happen to all the money which used to be in asset-backed commercial paper and other short-dated asset-backed securities. It seems that a significant chunk … Continue reading →

Do you remember when commercial banking was all about knowing your client and your clients’ industry and having strong relationships and parking billions of dollars in loans in some dusty old part of the balance sheet which never got marked … Continue reading →

There was a lot of bashing of the ratings agencies this morning at the Portfolio subprime panel. It was timely, coming as it did ahead of Congressional hearings on the ratings agencies and their role in the present mess. Investors … Continue reading →

Paul Kedrosky has found a Greenwich Associates report saying that "more than 60% of participants active in corporate bonds say they have experienced trouble getting a simple price quote from dealers on these usually liquid products". Is this, as he … Continue reading →

Vickie Tillman of S&P has an interesting letter in the WSJ today, defending the ratings agency against the kind of charges made by Jesse Eisinger in last month’s Portfolio. S&P is not conflicted, she says, by the fact that its … Continue reading →

Take a bunch of AA-rated securities. Boring, I know. So instead of just buying them, buy them with leverage, to boost their returns. Now, take that bundle of leveraged AA-rated debt, and tranche it, so that there’s a super-senior AAA-rated … Continue reading →

I mentioned on Monday that retail investors have a hard time buying up structured debt products which look very much as though they’re being underpriced in the present credit crunch. Today comes the news that in the wake of TCW … Continue reading →

How long does Hank Paulson think this credit crunch will last? According to the FT, it could be a decade: The crisis of confidence in credit markets is likely to last longer than previous financial shocks of the past two … Continue reading →

Mohamed El-Erian is moving
back to Newport
Beach. Here’s my take on the news.
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Let’s say that up until recently, money-market funds
had $1 trillion of their assets in ABCP. As that number starts to fall precipitously,
what are those funds going to invest in instead?
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