Category Archives: Credit Crisis

Bernanke Says He Failed to See Financial Flaws

Bernanke's Testimony  Ben S. Bernanke, who told Congress in 2007 that the subprime mortgage crisis was “likely to be contained,” said Thursday that he had failed to recognize flaws in the financial system that amplified the housing downturn and led … Continue reading

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Derivatives Huge Part of Goldman Business

WSJ 8/9: At Goldman, Derivatives were 25%-35% of Revenue A memo sent to the panel Thursday night by the New York company included an analysis of derivatives-based revenue at Goldman from 2006 through 2009, said the person familiar with the … Continue reading

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Gallows Humor from Michael Lewis

NYT: Shorting Reform To: Wall Street chief executives Editorial Series Financial Regulation Multimedia Op-Art From: Your man in Washington Re: Embracing the status quo Our earnings are robust, our compensation has returned to its naturally high levels and, as a result, we have … Continue reading

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Different Perspective on Wall Street Woes

John Mauldin: The Death of Capital The recent problems experienced by Goldman Sachs highlight just how far the financial system has lapsed from the days of gentlemanly capitalism. Change in itself is neither good nor bad – it is an … Continue reading

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Calculated Risk: 96.5% of Mortgages Backed by Government entities in Q1

From Nick Timiraos at the WSJ: U.S. Role in Mortgage Market Grows Even LargerGovernment-related entities backed 96.5% of all home loans during the first quarter, up from 90% in 2009, according to Inside Mortgage Finance. The following graph from San … Continue reading

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The Busted Homes Behind a Big Bet

Download 2010-4-22 Underlying Goldman Deal, a Different Set of Risk-Takers – WSJ.com The government's civil-fraud allegation against Goldman Sachs Group Inc. centers on a deal the firm crafted so that hedge-fund king John Paulson could bet on a collapse in U.S. housing … Continue reading

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Rating Agencies Shared Data, and Wall St. Seized on It – NYTimes.com

Raymond W. McDaniel Jr., chairman and chief executive of Moody’s, left, and Kathleen Corbet, former president of Standard & Poor’s, testified before the Senate’s Permanent Subcommittee on Investigations on Friday. via www.nytimes.com

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Ties to Abacus Deal Cost Bankers $840 Million – NYTimes.com

That decision set off a chain of events that left the Royal Bank of Scotland Group — to many Britons, a symbol of the excesses that brought the financial world to its knees — as the biggest loser in the … Continue reading

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Senate Panel to Release Documents in Inquiry of Ratings Agencies – NYTimes.com

WASHINGTON — As the housing market began to falter in 2006 and the risks embedded in Wall Street’s giant collective bet on subprime mortgages became apparent, a sense of omen filled the corridors of Standard & Poor’s and Moody’s Investors … Continue reading

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Goldman’s Position on Subprime Conflict of Interest and AIG

NYT: Goldman Denies Conflict of Interest on Subprime

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