Bankruptcy Filings are So 1996

Good piece in the NYT on the changing nature of bankruptcy filings. A combination of fewer banks at other end of the filing, and more cash-starved hedge funds and the like, plus less debtor-in-possession financing, means that a growing number of Chapter 11 filers in the U.S. are now going straight to liquidation.

Latest CDS Data: Next Weather. Seven Days

I spent time over the weekend pouring over the latest DTCC weekly credit default swap data release. I compared the current release with the prior week in terms of notional, net, and total contracts. The following table summarizes the top dozen entities in terms of increases and decreases in percentage terms in the number of outstanding CDS contracts. (The list is filtered down to those with at least 1,000 pre-existing outstanding contracts.)

Must-See Bailout TV Tomorrow: Waxman Power Hour

There is some must-see bailout TV tomorrow. Hedge fund managers John Paulson, Jim Simons, George Soros, Phil Falcone, and Ken Griffin will all be testifying tomorrow before the House Oversight Committee. I genuinely hope it doesn’t turn into a blame game and shouting match, but I don’t have a lot of confident that it won’t. The most interesting thing will likely be whatever prepared material they submit, so watch for that early tomorrow.

The Looming Deflation/Reflation Whipsaw

Economists and pundits are spinning their heads in circles, going from inflation worries a few months ago, to deflation worries today, but still fretting about inflation in the future. It’s highly amusing to watch, and points to the perils of static equilibrium models of the economy. They make it hard to deal with the real world.

Bank Bailouts and the Loans Myth

Since my friend Joe Nocera first wrote about it last weekend in the NY Times, I have seen a spate of other articles all saying that bank executives are bad people for taking money from the U.S. Treasury and not ramping up their lending. Trouble is, that’s wrong-headed. Recall, the intent of the bank capital […]

The Great Crash of China

I’ll confess to being something of a (short-term only) sino-bear, so this piece from the Far Eastern Economic Review a few weeks ago on China’s looming economy troubles perhaps over-fits my biases, but it’s still worth reading. The gist: A combination of capital misallocation, non-performing loans, an over-rapid forced transition to high value-added manufacturing, a post Olympics malaise, a collapse in the domestic stock market, and a recession in its main export markets mean that China is going to hit the economic wall sooner and harder than its many supporters expect.

Anyone Planning to ‘Fess Up on Lehman’s CDSs?

Just curious, but is anyone planning to ‘fess up on the Lehman-related CDS losses last week? As I wrote last Thursday, there was oodles of worry about the auction, with some people tossing out apocalyptic numbers, the highest of which were usually based on confusions about notional and net exposure. Nevertheless, there seemed to be […]

CBO on Pension Plan Losses and Underfunding

Useful new testimony out from Peter Orzag at the CBO on pension plan losses in the U.S. over the last year or so. At $2-trillion the headline number is huge, but you need to keep it in perspective. But that said, the people who are facing the biggest issues are the sponsors of defined benefit […]