Auction rate securities scandal shows we’ve learned nothing from the sub-prime mess.

The recently breaking news story about leading financial institutions selling auction rate securities with misleading marketing shows that neither financial institutions, nor investors have changed their behaviour since the financial meltdown caused by excessive credit and the sub-prime implosion. Several leading financial institutions have been fined and forced to repay investors their investments in auction …
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End of credit crunch …?

US Treasury Secretary thinks that it is the “end of the credit crunch“. It is likely that he said “peak” rather than “end”, or meant that anyway. And take that message with caution: yes this may be the peak of the unwinding of the US sub-prime mortgage mess, but unwinding will continue till year end. …
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Chaordic giant VISA to IPO

Visa, the trillion dollar credit card administration business, is to be listed on a stock market.  It will be interesting to see if the innovative company structure designed by Dee Hock (Chaordic Commons) will be compromised by the listing.  It won’t immediately.  But the very nature of shareholdings is so fundamentally different from the member …
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Gyrating markets

Despite unattractive economic fundamentals, US stock markets are still pushing highs. In early October Indexes posted highs: On October 1, the Dow Jones Industrial Average closed at 14,087.55 – the first climb above 14,000 since mid-July. On October 5, the Standard & Poor’s 500 rose to a record 1,557.59, while earlier in the day the …
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Compliance with new US restrictions on investment in Iran

KLD Research & Analytics, Inc. have launched a new Iran Compliance product that helps US institutional investors and money managers comply with engagement and divestment mandates of publicly trading companies conducting business in Iran. KLD’s Iran Compliance product meets all U.S. state legislative requirements mandating Iran divestment. KLD Iran Compliance Product press release

Riding along a precipice

That’s what it feels like watching the markets.  The Economist offered a suitably scary briefing for Halloween: Spooking Investors – Financial markets remain on edge because the credit crunch has not been solved.  While we know there are credit problems throughout the banking system, we don’t know how big or where they are.   And stock …
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Money wins over humanity, by a wide margin

Humanity’s interest in raising the poor and destitute from the threshold of survival is insignificant. But our interest money, even the virtual money crated by trading opinions in the stockmarket, remains supreme. Whether Boston or Bombay, money, that metaphysical asset, seems to feed our souls. It took minutes for the top guns to swing into …
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The US housing market is already starting to clear – that’s efficiency

This NYT article describes a Minneapolis auction of properties that have been foreclosed:  300 properties in 2 days, winning bids as low as half market value of 6 months ago.  More than half the properties were previously owned by speculators who had never moved in. The story illustrates how quickly an efficient market can move …
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