That’s Not a Stress Test

Image courtesy of flickr/Stuart Crawford

We finally got the information on the stress tests. The government will consider two scenarios: baseline and worst case. The goal of the stress test is to see if banks have the capital to weather a darker storm. However, and … Continue reading →

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Posted on February 26, 2009 by camharvey

Taxpayer=Loser

You hear the buzz about the nationalization of Citi? What does this mean? The U.S. government has dropped $45 billion of cash on Citi and another $250b in debt backstops (guarantees). There is talk of converting some of the $45b … Continue reading →

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Posted on February 23, 2009 by camharvey

The Treasury Fiasco – 3 Video Blogs

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Here are three new video blogs. 1) Bank CEOs Testify before Congress Eight bank CEOs appeared before Congress on February 11, 2009 to explain how their institutions used the TARP funds they received in 2008. I comment on their testimony … Continue reading →

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Posted on February 14, 2009 by camharvey

Fragile International Banks

The international banking system is at great risk in the current environment. This week Fortis shareholders rejected a takeover offer. This puts the whole country of Beligium at risk. Fortis’ assets are more than 200% of the GDP of Beligium. … Continue reading →

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Posted on February 13, 2009 by camharvey

The Ghost of Paulson-Past

What we saw yesterday was more of the same. I was flabbergasted that the plan was so light on details. They have had 3 months to put something together and the best they could deliver is a 7-page fact sheet. … Continue reading →

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Posted on February 11, 2009 by camharvey

The Long-Term Cost of the Credit Crisis

Many economists argue that recessions are a good thing. How is that possible? Well, recessions give companies the excuse to lay off unproductive workers – both blue and white collar and make other tough decisions that make the firm stronger … Continue reading →

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Posted on February 3, 2009 by camharvey

Fed Running Out of Bullets

Image courtesy of MicksGuns.com

“Fed To Hold Rates Near Zero” is the news headline today. It is not really news. What were they supposed to do? They can’t increase the rates. Zero is as low as you can go. There were about six notable … Continue reading →

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Posted on January 28, 2009 by camharvey

This Winter of Our Hardship

Image courtesy of flickr/Wayne MacPhail

The ‘Winter of Our Hardship’ are the words of President Obama in the inaugural address. He refers to the common dangers that we face in his somber message. The common danger is that this recession turns into a depression. In … Continue reading →

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Posted on January 24, 2009 by camharvey

The Impact of the U.S. Economic Crisis on the Rest of the World

Image courtesy of flickr/Kennington Fox

For those of you who are familiar with some of my research, you know how I have railed against people overselling the concept of “Global Diversification”. While there is an obvious benefit to diversifying your investments, it is not fair … Continue reading →

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Posted on January 24, 2009 by camharvey

The Essential Need for Transparency

Image courtesy of flickr/Jurek Durczak

We recently learned that the U.K. financial institution, RBS, lost $41 billion. We also learned that Citigroup lost $8 billion. How are we to interpret these numbers? Would you be surprised if it was the reverse, with Citi losing $41b … Continue reading →

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Posted on January 24, 2009 by camharvey