Credit Default Swaps: A $50 Trillion Problem

By Martin Hutchinson Contributing Editor Of all the really bad ideas that have infested the finance business in the last 30 years, the most dangerous is probably the credit default swap (CDS). CDS is almost a brand new investment vehicle, but the market is already 20 times its size in 2000. The principal amount of […]

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More Writedowns Ahead as Credit Crisis Spreads

By Jennifer Yousfi Managing Editor A credit crisis that is no longer contained to just the subprime market may lead to an additional $203 billion in write-downs according to a recent research note from UBS AG (UBS) analyst, Philip Finch. "The problem is broadening from just subprime CDO write-downs to potentially a much bigger credit […]

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Chinese Inflation Continues Unabated, Reported at 6.2% for September

By Jason Simpkins Staff Writer China had a 6.2% inflation rate for September, and can expect inflation to continue at that high rate for “a few months,” – despite renewed efforts to hold down the general level of prices – the National Development and Reform Commission, China’s top agency for economic planning, has reported. The […]

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Banks Create Fund to Help to Fight Woeful Credit Market

From staff reports Three of the United States' biggest banks – Citigroup Inc. (C), Bank of America Corp. (BAC) and J.P. Morgan Chase & Co. (JPM)- announced yesterday (Monday) that they agreed to start a fund to enhance the liquidity of asset backed commercial paper (ABCP) and medium-term notes by structured investment vehicles (SIVs). The […]

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Warren Buffett and Berkshire Hathaway Rumored as Bear Stearns Investors

From Staff Reports Bear Stearns Cos. Inc. (BSC) shares jumped almost 7.5% yesterday (Wednesday) after the New York Times reported that the investment bank is in talks to sell a minority stake to investors including Warren Buffett. The firm is in "serious" talks with several outside investors and could sell as much as 20% of […]

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Will Fed Rate Cuts Have an Inflationary Impact?

When Federal Reserve policymakers announced the half-a-point cut in interest rates last Tuesday, I was almost at a loss for words. As all of you know, I had projected reduction of 25 basis points, and by the time Tuesday’s meeting of the central bank’s Federal Open Market Committee (FOMC) rolled around, the market supported my […]

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How to Play Today's FOMC Meeting

By Martin Hutchinson Director of Global Investing Research Wall Street has firmly got it into its tiny overpaid noggin that the Fed Chairman Ben S. Bernanke and the central bank's Federal Open Market Committee will slash interest rates today. I'm not so sure. Whatever Bernanke & Co. does will indicate the medium-term future of Federal […]

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Euro Debt Market Faces 'Pivotal' Test With $140 Billion Maturing

From Staff Reports Companies in Europe face a situation in which they need to refinance nearly $140 billion worth of commercial by the end of next week, according to Deutsche Bank AG, Germany's biggest bank. This will increase corporate borrowing costs. According to Bloomberg News, Deutsche Bank Credit Strategist Jim Reid wrote in a research […]

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