zero hedge Sun 2009-11-29 12:33 EST

Fed's Bull Dudley Explains Bank Runs, Discusses Collateral Risks, Suggests Way To Prevent Systemic Collapse

An impressively comprehensive presentation by Bill Dudley before the Center for Economic Policy Studies Symposium earlier, discusses, and ties in, all the key concepts Zero Hedge has been discussing over the past several months, among these the tri-party repo system, bank runs (what and why), collateral, moral hazard, maturity mismatch, unsecured markets, Primary Dealer Credit Facility, Commercial Paper Funding Facility, and liquidity. In fact, at some points in the speech we get the feeling Mr. Dudley is indirectly refuting some of Zero Hedge's recent allegations vis-a-vis the Fed's actions and regulatory oversight. The presentation is largely devoid of bias except for some of the proposals on how to avoid future systemic meltdowns, which of course are moral hazard prevention lite and philosophy heavy.

Discusses Collateral Risks; Fed's Bull Dudley Explains Bank Runs; Prevent Systemic Collapse; suggested way; Zero Hedge.

naked capitalism Wed 2009-11-25 11:13 EST

If the Fed is looking to inflate away problems, what should Asia do?

Edward Harrison of Credit Writedowns

Andy Xie thinks the Fed is on an inflationary path. Last month, he wrote an article in Caijing which says that `stagflation lite' is the Federal Reserve's preferred outcome. What's interesting is his recent article about the need for China and Japan to join forces under an ASEAN umbrella, rejecting the APEC umbrella shared with the U.S.

Asia; Fed; inflate away problems; looking; naked capitalism.

naked capitalism Tue 2009-09-22 13:02 EDT

Bank of America: 40% of Junk Bonds to Default by 2013

With more than half the corporate bonds rated junk, thanks to highly-levered takeovers, it wasn't hard to imagine that a protracted economic bad spell could lead to a lot of defaults...the novel feature of the binge of late-cycle merger loans, ``cov lite'' deals, will make the damage worse...the odds of a successful [re]structuring are lower, and more companies will wind up liquidating. Thus not only will defaults reach new post-war highs, but recoveries are likely to be lower.

2013; 40; America; bank; default; junk bonds; naked capitalism.