Archive for May 7th, 2009

GMAC: Stress Test Big Loser-Don’t Worry They’ll Do Fine

The biggest loser on the stress test was clearly GMAC. It needs to raise $11.5 billion in capital, which is about half of its current equity. Unlike the commercial banks, it has no earnings power — it lost $675 million in the first quarter. Yet per Tim Geithner and Ben Bernanke, none of the banks [...]

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Obama Budget Realities

President Obama is making much of a drive to find programs to cut and pare back in order to save money. To give you a sense of perspective of how diligently he is pursuing this goal, here is a graph from Keith Hennessey. It shows proposed discretionary program terminations and reductions in Obama’s budget versus [...]

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Jobless Claims

I neglected to post this earlier today. Weekly jobless claims is one of the best gauges of how the economy is going. This week the four week moving average came in at 623,500 a decline of 30,000. It’s a horribly high number but it is at least continuing to decline.

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Why Option ARMs Are Different

Megan McCardle and Ryan Avent have posts up about the coming recast of option ARM mortgages. Both contend that the issue isn’t the payment shock but some other factor or combination of factors that might make borrowers with option ARMs default. Here is Ryan’s analysis: Since the housing bust began, people have approached the problem [...]

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Stress Test Info: Is It Kosher To Withhold It From Investors?

I have a question. As the banks which were identified as needing more capital under the stress test begin to sell new equity how do they justify withholding the detail of the stress tests from prospective purchasers of that equity? I’m not a lawyer nor do I have any deep understanding of securities law but [...]

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Stress Test Results Are In

OK if you absolutely have to have all of the stress test information here is the link for you. It’s from the Fed but it’s carried on the WSJ website. All sorts of explanations, graphs and most of all the bank specific data. No doubt you know that banks are announcing new secondary offerings, asset [...]

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Perspective On China’s Growth

Regular readers of this blog know that I’m a skeptic when it comes to economic numbers published by the Chinese. Recent reports of a strong rebound in the country seemed at odds with depressed world demand for the sorts of goods China exports and now there are a couple of data points that cast doubt [...]

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