Wall Street Pit

A Look at the Income-Side Estimates of Growth

Laurel Graefe — Fri, 12 Mar 2010 22:24:40 +0000

Last week, a post in the New York Times‘ Freakonomics blog on Okun’s law made note of the statistical discrepancy between the two methods for calculating national output: “…there are two measures of output growth—the usual measure, which adds up total spending in the economy, and the alternative, which adds up total income. In theory, the [...]

Goldman Says it Has Never Used Repo 105s

editor — Fri, 12 Mar 2010 20:17:27 +0000

After a report by a US bankruptcy-court examiner investigating the collapse of Lehman Brothers (LEHMQ) revealed last night that the 158-year-old company had used complicated accounting tricks, known as Repo 105, to reduce its reliance on borrowed money and conceal its dependence on leverage that eventually led to its undoing, banks are beginning to deny any involvement [...]

The Sham Recovery

Robert Reich — Fri, 12 Mar 2010 19:58:37 +0000

Are we finally in a recovery? Who’s “we,” kemosabe? Big global companies, Wall Street, and high-income Americans who hold their savings in financial instruments are clearly doing better. As to the rest of us – small businesses along Main Streets, and middle and lower-income Americans – forget it. Business cheerleaders naturally want to emphasize the positive. [...]

The Economy Abides

Duncan Davidson — Fri, 12 Mar 2010 19:25:59 +0000

We have a lot of confusion in economic forecasts right now. I have mentioned how in the middle of a correction, the market reaches a moment of maximum entropy, in a Chaos Theory sense, with energy flowing about evenly in and out (buying/selling). This ends with a sharp break, a bifurcation one way or the [...]

EU Agrees to Bailout Greece

editor — Fri, 12 Mar 2010 19:00:30 +0000

It’s official. The EU is set to bail out Greece as key EU partners come to the aid of the stricken Greek economy and take the first step towards European economic governance. According to The Guardian, the EU single currency group has agreed on a multibillion-euro bailout for Greece which will be put up by members [...]

ECB’s Trichet on Greece’s Debt Crisis, European Inflation and the Euro

editor — Fri, 12 Mar 2010 18:28:20 +0000

European Central Bank President, Jean Claude Trichet, sat down with FOX Business Network’s Liz Claman to talk about Greece’s debt crisis, European inflation, the Euro vs. Dollar, and a proposed EMF. Watch the latest business video at video.foxbusiness.com Watch the latest business video at video.foxbusiness.com Excerpts from the interview below: Courtesy of FOX Business Network On [...]

SEC Chair Asks Congress to Regulate CDS Market

editor — Fri, 12 Mar 2010 18:07:21 +0000

The Securities and Exchange Commission [SEC] Chairman Mary Schapiro said the U.S. policymakers and other regulators need to supervise the opaque and fast growing credit default swap market, blamed for fueling 2008’s market meltdown. Reuters: “If we continue to allow these risky financial products to operate in the dark we should not be surprised at [...]

Terra Industries Eventually Found Its Dance Partner

Ockham Research — Fri, 12 Mar 2010 17:09:13 +0000

After more than a year of bidding Terra Industries (TRA) has finally agreed to combine with CF Industries (CF). The long, drawn out bidding process involved another potential suitor, but yesterday Yara International announced it would drop its offer. Also coming to an end yesterday was Agrium’s (AGU) $5.43 billion hostile bid [...]

Former Lehman CFO Reacting to Lehman Report

editor — Fri, 12 Mar 2010 16:35:13 +0000

Brad Hintz, former Lehman Brothers (LEHMQ) CFO, spoke to Bloomberg Television’s Erik Schatzker this AM about the Lehman report out today. Hintz commented on whether former CEO Dick Fuld could have known about the firm’s financial engineering. He also talked about the firm’s accounting practices. Here are some excerpts from the interview ; Courtesy of Bloomberg Television On [...]

Municipal Deflation: Consequences of the Greatest Speculation

Frederick Sheehan — Fri, 12 Mar 2010 15:55:40 +0000

“The financial difficulties of local governments in consequence both of the inflation and deflation of real estate values demonstrates strikingly the unwisdom of a revenue system concentrated so heavily upon real estate….” -Herbert D. Simpson, Meeting of the American Economic Association, 1933 On March 10, 2010, the Kansas City Missouri School Board voted to close nearly half [...]