From a month ago, but still spot on:

I thought I'd post this, because I know at least one friend would be interested.

From http://www.bos.frb.org/news/press/2008/pr071708.htm:

WHAT:
Borrowers can talk face-to-face with their lender and housing counselors to work out a plan for their mortgage
WHERE:
Gillette Stadium – Fidelity Investments Clubhouse, East
One Patriot Place, Foxborough, MA
Parking lot entrance P1
WHEN:
Tuesday, August 12, 2008 – 1 PM to 8 PM
Free to attend; free parking; free public transportation available

The New England Patriots Charitable Foundation and the Federal Reserve Bank of Boston will host a foreclosure prevention workshop at Gillette Stadium on Tuesday, August 12, from 1 PM to 8 PM. The event is an opportunity for homeowners who are in financial distress, or concerned about foreclosure, to sit down with their lender face-to-face, and avoid foreclosure if possible.

Borrowers should bring documentation on their income, expenses, debts, and mortgage to the workshop, so they are fully prepared to talk with their lender. The documentation may also be useful in talking with a housing or credit counselor.

For more information, borrowers are invited to call a special number set up by the Federal Reserve Bank, 1-800-882-1600. Borrowers who call this number can leave their name, questions about the event, and a callback number. Calls should be returned within 24 hours. Information is also available on this web site: www.theinformedhomebuyer.org

This event is free and open to all borrowers in difficulty. Some borrowers are being alerted to the event by their lender or loan-servicer, but no invitation is required to attend.

From http://online.wsj.com/article/SB121625520953660253.html

"Some free markets are apparently freer than others: The price of oil is free to fall, while the stock price of a bank is free to rise.

"That is one takeaway from Washington's recent response to market turmoil. By singling out "speculators" who want to push bank stocks down and oil prices up, lawmakers and policy makers reinforce a message that the free market is a wonderful thing as long as it isn't going against you."

And they don't like the plan for bailing out the GSEs.

The euro is up to $1.60, the pound is back over $2, the loonie is back over parity, the swissie is only a whisker below, and the aussie is over 98 cents.

It seems like a good time to post this.

From http://bankdeals.blogspot.com/2006/05/facts-about-fdic-and-ncua.html:

The top 2 FDIC misconceptions that I've encountered include: 1) You do not get the interest earned, only the principal when a bank fails, and 2) It may take years before they release all your funds.

If you keep below the insured limits, neither of these are true.

See the FDIC's article on the Top 10 FDIC Misconceptions.

That article also includes links to both the FDIC, which insures accounts in banks, and the NCUA, which insures accounts in credit unions.

It's simple enough to make sure your accounts are under the insured limits. This would be a good time to do that.

From today's Daily Telegraph (http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/30/cnvisa130.xml):

Lloyds TSB gives Visa cards to 11-year-olds

A leading bank is giving children as young as 11 debit cards without informing their parents, it has emerged.

The bank receives a fee from the retailer every time a card is used. In the past, children aged 11 to 15 with current accounts could only have debit cards that could be used only in cash machines or at bank branches.

A spokesman for Lloyds TSB said: "We wrote to customers under the age of 16, who previously had a cash machine card, to let them know they could have a debit card.

I used to have one of these cards before I closed my Lloyds TSB current account after a fee increase. If they're anything like the debit card I had on my account, it's possible to overdraw the account and get hit with some significant fees and interest. Current accounts in the UK generally include overdraft features as a standard part of the account. I don't know if that's true of accounts opened by children.

If so, I suppose the bank's just taking advantage of a new revenue source. :)

In mid-May, the Reserve Bank of Zimbabwe released their latest series of paper money, the Agro Cheque, in denominations of Z$5 billion, Z$25 billion and Z$50 billion. Charity Dhliwayo, acting bank governor, says they are intended for "our farmers, who, starting this year's marketing season, are receiving competitive prices for their produce".

Here's a photo of the Z$50 billion note, snagged from an eBay auction:



(This note is currently worth less than US $50 at the market rate.)

From http://www.thewip.net/contributors/2008/05/zimbabwe_introduces_special_ba.html:

Like all Zimbabwean banknotes, the new notes are actually bearer's cheques with an expiration date. They expire at the end of the agricultural marketing season in December.

This becomes the fourth set of high denomination notes to be issued this year alone. The RBZ has had to constantly introduce new bills as hyperinflation in the country continues unabated.

Only a fortnight ago, the central bank introduced Z$250 million and Z$100 million notes. A Z$50 million and Z$10 million note were launched in April and January respectively, while Z$250,000, Z$750,000 and Z$1million notes were introduced in December of last year.

Zimbabwe is battling the world's highest inflation rate, currently at 355,000 percent. The high inflation rate has ravaged the value of any new notes within just a few weeks, a trend that has caused frequent cash shortages.

For reference, it closed on Friday at $30.

Bloomberg reports:

"[T]he price JPMorgan is paying is about one quarter the value of the securities firm's headquarters building in midtown Manhattan. The 1.2 million-square-foot, 45-story structure built in 2001 is worth about $1.2 billion".

Marketoracle.co.uk says:

"Said another way, Bear's headquarters building, which was included in the sale, is worth four times what JP Morgan paid for the entire firm. That means Bear, as an ongoing entity, was a liability as of Sunday. This is not surprising considering the rush for the exits by customers in the last few weeks and the loss-ridden portfolio of securities on Bear's books. Add the possibility of lawsuits against Bear's actions, and JP Morgan in effect said Bear is a liability in its present form, we will not buy it, but we will take it for $2 per share to help shore up confidence since the Fed has asked us nicely."

"Unfortunately, Bear Stearns is not the only firm to hold large quantities of leveraged securities backed by mortgages."

"If Bear Sterns [sic] went from having a $169 stock in January of 2007 to being virtually worthless today, it makes you wonder what other firms may follow a similar path to insolvency."

From http://bigpicture.typepad.com/comments/2008/02/tigger-economic.html:

Thanks to kjc007, who says:

Well today, 12 February 2008, is DARWIN DAY! Today we celebrate the 199th anniversary of the birth of Charles Darwin on 12 February 1809.

Wikipedia sez, "The day is also an opportunity to highlight Darwin's contribution to science and to promote science in general."

Hints on celebrating DARWIN DAY: http://www.darwinday.org/

As I'm a paper money geek, I thought I'd add this Bank of England page on the £10 note, which features "a portrait of Charles Darwin on the back":



The Bank of England also include details about his life.

I'd love to celebrate the day by giving away copies of the above portrait, along with the rest of the banknote, which also features a portrait of the Queen (two portraits for a single low price!) but I'm afraid that's beyond my means.

Someone else should, though. :)

Angry financial bloggers do get some good rants going.

For example, from http://bigpicture.typepad.com/comments/2008/02/moodys-warning.html:

Let me make sure I understand this:

1. Moodys (and S&P and Fitch's) labelled a bunch of horrific junk -- RMBS, CDOs, CDS, and other stuff -- high quality AAA.

2. The banks and brokers all shoveled this crap to their clients around the world, many of whom then promptly blew up.

3. Once the music stopped, these banks and brokers got caught holding loads of this AAA rated shit paper, leading to $130 billion -- and counting -- in write downs.

4. The banks then saw their credit ratings get downgraded by the same companies that rated the original crappy paper AAA.

AND NOW THE SOLUTION PROPOSED BY THOSE SELF SAME RATING AGENCIES IS TO PUT A WARNING LABEL ON THEIR RATINGS?

Are you shitting me? Words fail me . . .

I'm thinking waterboarding the entire staff is the way to go with these criminal idiots, and instead, they think a mattress tag is a solution?

Well that's just fine. I'll write the warning for them:

WARNING: THESE BONDS HAVE BEEN RATED AAA BY A MAJOR RATING FIRM. THESE RATING FIRMS HAVE PROVEN THEMSELVES TO BE CLUELESS, MONEY-LOSING INCOMPETENTS IN EXCESS OF A TRILLION DOLLARS IN LOSSES. THEY WERE PAID HANDSOMELY BY THE BOND UNDERWRITER, AND ARE HOPELESSLY COMPROMISED. PURCHASERS OF THESE BONDS ARE ADVISED TO IMMEDIATELY KILL THEMSELVES, THUS SPARING THEIR LOVED ONES EMBARRASSMENT IN THE FUTURE. ALSO, THESE BONDS MAY LOSE VALUE. I JUST WET MYSELF MERELY THINKING ABOUT THIS PAPER. WHILE PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RETURNS, YOU SHOULD BE AWARE THAT PAST PERFORMANCE ALSO SUCKED. DONT BLAME US IF YOU LOSE ANY MONEY, AS WE HAVE NO IDEA WHAT THE F$#@ WE ARE DOING ANYWAY. REALLY, YOU ARE ON YOUR OWN.

Now thats a disclosure . . .

(It doesn't look as if words failed him, although perhaps there was the odd glitch or two in putting them together.)

And the Financial Times live blogs the conference call:
(from http://ftalphaville.ft.com/blog/2008/01/24/10432/live-blogging-the-socgen-conference-call/)

Some highlights:

9.56 - Music, music. There’s noise in the background. There’s no official message to let you know where you are. A chap from the BBC asks a female journalist with limited English whether he’s in the right place. Patrick Hoskings from the Times also chimes in. “I don’t think there’s anyone official on this call,” a mystery voice explains. No one knows what’s going on - it’s chaos before the official call has even begun.

10.01 - “we’re all waiting,” explains one journo to two new arrivals to the conference call. No sign of any official/SocGen action just yet. Just half Europe’s financial media.

10.03 - very loud banging in the background. Someone makes a gag about a guillotine in action.

10.12 - the chaos continues. They’re looking for our correspondent apparently. Starting to see how this bank managed to let an plain vanilla futures trader build up sufficiently vast positions to lose €5bn. They don’t seem to have mastered the basics of telecommunications.

10.21 - there’s a forceful type online complaining that the bank must restart the conference call. In the background: “we are probably…nothing to do with the core activities….derivative product.” Hope you’re finding this as insightful as we are.

10.22 - Is this a conspiracy? Presumably the problem is only affecting the English translation. We’ve heard about it being difficult to get on as an English-speaker in the French banks.

10.39 - “because that person had been working for many years in other banks and our back office, that person managed to construct…..managed to hide these positions with other positions that were entirely fictitious”

The trader managed to avoid any types of control

11.04 - detected at end of Dec - because of mistake by the fraudster.

11.14 - the man was let go with his passport, it seems. “perhaps we made a mistake.”

From the comments:

“one dodgy bloke ran rings around our risk management”

Soc Gen has “no idea where this person is now”. reassuring.

As if the mortgage crisis weren't enough of a problem for the credit markets...

From http://www.nytimes.com/2008/01/12/business/12charts.htm:

American credit card debt is growing at the fastest rate in years, a fact that may signal coming trouble for the banks that issue them.

The surge in credit card borrowing comes as credit card default rates are gradually rising, albeit from low levels, and may reflect the fact that it has become harder for consumers to borrow against the value of their homes, both because home values have fallen in many markets and because mortgage lending standards have tightened.

Increases in outstanding credit card debt can indicate a strong economy, as confident consumers spend more, or it can indicate the opposite, as troubled consumers find it harder to pay their bills. The fact that the November increases in credit card debt came during what appears to have been a weak holiday shopping season could be an indication of the latter.

The holiday sales data indicated that consumers cut back in late 2007. But the consumer credit numbers would seem to indicate that they wound up further in debt anyway. Those are not good signs for the economy as 2008 begins.

Yesterday I mentioned to dpolicar my advice to graduating seniors:

"You can do anything you want with your life. Yes, anything. I mean, you can even graduate and go rob banks if you want to. Just remember that there are consequences.

(If you do decide to rob banks, I strongly suggest you do it in the time-honored way of becoming the CEO and looting the thing from inside. It's a long-term strategy, but it has the advantage of being legal.)"

(As a matter of fact, I seem to remember saying this almost verbatim, to emilymorgan a couple of years ago.)

Today comes the latest example of what I mean. From http://bigpicture.typepad.com/comments/2008/01/mozilo-payday.html:

Nothing like a combination of reckless lending standards, aggressive stupidity and irresponsible behavior being rewarded.

For pushing no doc, no money down loans, emphasizing the sub-prime market, oh, and dumping $414 million of Countrywide shares before the stock tanked 85%, Countrywide Financial CEO Angelo Mozilo stands to get a severance package valued at more than $110 million, according to this LA Times blog (http://latimesblogs.latimes.com/laland/2008/01/mozilo-severanc.html).

Forget SEC investigations and shareholder lawsuits -- where are the townspeople with pitchforks and torches?

I guess after building up Countrywide over 40 years, he gets some sort of a pass. I don't understand why . . .

Nice payoff, even if it did take him 40 years. Sure pays better than sticking up bank branches.

Edit: Mozilo joins such illustrious ex-bankers as Stanley O'Neal of Merrill Lynch ($161.5 million) and Charles Prince of Citicorp ($94 million) who "resigned" in the 4th quarter of 2007. (sources: http://money.cnn.com/galleries/2007/fortune/0712/gallery.101_dumbest.fortune/5.html and http://www.nytimes.com/2007/11/03/business/03bank.html)

“The US has adopted unbelievably foolish policies. We are heading in the direction where we will get to one dollar equalling one yen.” David Bonderman, co-founder of private equity firm TPG, quoted in a post in the Financial Times' Alphaville blog today.