New Bank Definition I thought I knew what a bank was, until those clever folks at the internet gave me something else to contemplate.

Treasury Secretary Tim Geithner is testifying before congress this morning about the AIG bailout in Fall 2008. At issue is whether AIG counterparties should have been paid in full for AIG’s obligations to them using government aid. As the testimony points out, Treasury and the Fed were mostly concerned about broad economic meltdown and had [...]

Yesterday Senators John McCain (R-Arizona) and Maria Cantwell (D-Washington) proposed reinstating Glass Steagall, the Depression-era body of financial regulations that, among other things, kept traditional banking activities like deposits and lending separate from more sophisticated activities like securities trading and insurance. Glass Steagall was repealed by the Gramm Leach Bliley Act in 1999, which enabled [...]

When I got home last night, my wife demanded that I take her someplace expensive…So I took her to a gas station…That’s when the fight started.

We’ve already discussed why the last big wave of hysteria about AIG and resulting 90% bonus tax is deadly for big banks, now here’s the next hysteria wave says The Economist:

AIG reported fourth quarter earnings today and they lost $61.7 billion in the quarter, which is the largest quarterly loss ever for a US company. This prompted a phase 3 bailout of the company by the government, this time $30b was committed, bringing the total to about $170b. Previous news is here, or you can [...]

The good thing about driving all night to get back home after watching a NASCAR race in Las Vegas is… well, I can’t think of one. (It was for my son’s birthday.) But there is certainly a better picture of how the day is shaping up.

Remember when the heat of the credit crisis was the worst and AIG just needed time to sell assets? That plan is now being scrapped according to Bloomberg:

Back on October 9, AIG added $38b to their $85b Fed loan. Today the government bailout of AIG has been completely restructured and greatly increased. It involves help from the Treasury under the Troubled Asset Relief Program, and also help from the Fed that comes in multiple tiers. Most notably, the Fed’s original loans to [...]

The utterly unregulated $55 trillion market for credit default swaps is getting closer to transparency as regulators are expected to approve a clearing house for the securities during November. The CME and Citadel Investment Group have played a key role in this process by creating an exchange for CDSs, which is a topic we covered [...]