The Business News Network in Canada interviewed me last week about the gigantic amount of excess reserves being held by U.S. banks. Here’s a link to the video of the interview. (We had a small technical glitch at the start, but then got rolling.) Going into the interview, I was focused on the following talking [...]
Posts Tagged ‘Banks’
Inflation, Bank Reserves, and Lending
Posted in Economy, Finance, Macroeconomics, tagged Banks, Federal Reserve, Finance, Interest Rates, Macroeconomics on August 12, 2009 | 6 Comments »
Sub-Debt = Senior Debt?
Posted in Economy, Finance, International, tagged Banks, Debt, Finance, Interest Rates, International on August 6, 2009 | 3 Comments »
I was flipping through a report from the Bank for International Settlements (BIS) recently (ht Torsten Slok) and came across this fascinating six-pack of charts: The charts show how much banks have had to pay in interest on their senior, subordinated, and guaranteed debt, relative to the interest rates of comparable government bonds. For example, [...]
Why Are Banks Holding So Many Excess Reserves?
Posted in Economy, Finance, Macroeconomics, tagged Banks, Federal Reserve, Finance, Interest, Macroeconomics on July 29, 2009 | 8 Comments »
That’s the question posed by a recent staff report from Todd Keister and James McAndrews at the New York Federal Reserve. Their answer? Because the Federal Reserve has been really, really busy. Keister and McAndrews begin their analysis by documenting the remarkable increase in excess reserves since the fall of Lehman: Since September 2008, the [...]
Citigroup & Efficient Markets
Posted in Finance, tagged Arbitrage, Banks, Citigroup, Finance, Stock Market, TARP on July 21, 2009 | 8 Comments »
The Citigroup pricing anomaly may be in its final days (earlier posts here and here). Investors must submit their offers to exchange preferred shares for common shares by this Friday (which may require contacting your broker several days earlier). The common shares will then be delivered to investors on July 30. The pricing gap between the [...]
Beyond the $23.7 Trillion Headline
Posted in Budget, Economy, Finance, Macroeconomics, Politics, tagged AIG, Bank of America, Banks, Budget, Chrysler, Citigroup, Finance, GM, GSE, Housing, Macroeconomics, Politics, TARP, Warrants on July 20, 2009 | 3 Comments »
Neil Barofsky, the Special Inspector General for the Troubled Asset Relief Program (affectionately known as SIGTARP), is making headlines with his estimate that the government has provided “potential support totaling more than $23.7 trillion” in fighting the financial crisis. That estimate will be officially released on Tuesday morning in the SIGTARP’s latest quarterly report (you [...]
TARP Warrants: Auctions and the Oversight Panel
Posted in Finance, Uncategorized, tagged Auction, Banks, Finance, Stock Market, TARP, Warrants on July 10, 2009 | 1 Comment »
Good news on the TARP warrant front today (previous installments here and here). First off, Reuters reports that: JPMorgan Chase & Co, seeking to completely extricate itself from a federal bailout program, has asked the government to auction warrants to buy the bank’s stock, after the Treasury Department demanded too high a price for the bank [...]
The Citigroup Repo
Posted in Finance, tagged Arbitrage, Banks, Citigroup, Finance, Stock Market, TARP on July 10, 2009 | 6 Comments »
As I’ve noted in a series of posts (here’s the most recent), there’s an anomaly in the pricing of Citigroup securities. Several issues of Citi’s preferred stock are scheduled to convert into common by the end of the month. Yet the common stock has been trading at a significant premium to the preferred in recent [...]
Citigroup & Berkshire Anomalies
Posted in Finance, tagged Arbitrage, Banks, Berkshire Hathaway, Citigroup, Finance, Stock Market, TARP on July 6, 2009 | 9 Comments »
Summary: Both Citigroup and Berkshire Hathaway continue to violate the law of one price. Citigroup In previous posts (this is the most recent), I’ve pointed out that there are three ways you can purchase common shares of Citigroup: Simple: Buy shares of common stock. Preferred: Buy shares of preferred stock that will convert into common. [...]
Progress on Auctioning TARP Warrants
Posted in Auctions, Finance, tagged Bank of America, Banks, Budget, Chrysler, Citigroup, GM, TARP, Warrants on June 26, 2009 | 3 Comments »
Ten major banks repaid almost $70 billion to TARP in recent weeks. But they aren’t free from TARP just yet: Treasury still owns warrants to purchase their common stock. I’ve previously argued that Treasury ought to auction these warrants to the highest bidder. Auctions would (a) be transparent, (b) provide full, fair value to taxpayers, [...]
The TARP Peace Sign
Posted in Budget, Finance, tagged Bank of America, Banks, Budget, Citigroup, Finance, Stock Market, TARP, Warrants on June 18, 2009 | 3 Comments »
Wednesday was a rare day in Washington: the Federal government was actually cash-flow positive. The reason, of course, is that ten major banks repaid $68 billion in TARP money. Smaller banks had previously repaid about $2 billion, so Wednesday’s action lifted total repayments to $70 billion, almost 30% of TARP support to individual banks. (For [...]
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