Category

Shah Gilani

Why the $700 Billion Bailout Bill Will Fail US Taxpayers

When the banking-system bailout plan – formally referred to as the "Emergency Economic Stabilization Act of 2008" – was originally unveiled, the financial-crisis firefighters at the U.S. Treasury Department were essentially reprising the Florida firefighting strategy. And U.S. taxpayers can anticipate an outcome a lot like the one that afflicted the Coral Gables apartment dwellers.

Unfortunately for the U.S. taxpayer, there's no Biltmore in which to seek temporary shelter. There's only one U.S. economy, and we have to stay in it, whether it's been condemned or not.

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Overly Leveraged Private Equity Deals Add to Unemployment and Deepen Recession

By Shah Gilani Contributing Editor Money Morning/The Money Map Report The once booming business of private equity faces an uncertain future. What’s not uncertain, however, is that many private equity deals are imploding from the weight of leveraged debt and greed. Inevitable bankruptcies will result in higher unemployment and a deeper recession. Private equity is […]

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U.S. Economic Outlook for 2009

If there's a proverb that captures the outlook for the U.S. economy in the New Year, it's the one that says: "It's always darkest before the dawn."

Regardless of any formal announcement of whether or not the United States drops into an actual recession, the ongoing credit crisis guarantees a contraction of the American economy by virtually every measure we know. That period of darkness will be marked by a dramatic slowdown in economic activity, as well as by rising unemployment, additional declines in U.S. stock prices, and constant volatility. And it could last as long as 12-18 months.

But when the dawn does come, it will be one to remember. If U.S. President-elect Barack Obama gets it right – and I have every reason to believe that he will – then investors will be presented with the greatest investment opportunity of our generation. At that point, shares of American companies will be at such low levels that wholesale buying by individuals, mutual funds, pension funds, institutional money managers, and foreign-controlled sovereign wealth funds, will generate gains that will not only make us whole, they will make us rich once again.

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Dear Hank: Here's How to End the Credit Crisis at No Cost to Taxpayers

By Shah Gilani Contributing Editor While it's clear from the current credit crisis that our financial system is at a critical juncture, it's just as clear that there's no agreement over how we should fix the problems we face. The reality is that neither the plan put forth by U.S. Treasury Secretary Henry M. "Hank" […]

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How Complex Securities, Wall Street Protectionism and Myopic Regulation Caused a Near-Meltdown of the U.S. Banking System

[In Part III of his three-story investigation of the credit crisis,Money MorningContributing Editor Shah Gilani details how the very complexity of the global financial system brought us to the brink of a total meltdown. In a special addendum tomorrow (Thursday), the former professional trader and hedge-fund manager will detail a banking-system overhaul that would immediately […]

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The Inside Story of the Collapse of AIG

[Due to the remarkable market events playing out as a result of the credit crisis, Money Morning's Web site experienced extraordinarily high levels of traffic, and suffered some outages as a result. Although we believe the problem is fixed, we fear some readers may have missed Part II of Shah Gilani's superb three-part investigation of […]

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The Credit Crisis and the Real Story Behind the Collapse of AIG

[In Part II of his three-story investigation of the credit crisis,Money Morning Contributing Editor Shah Gilani shows us how American International Group, a perfectly sound company that’s survived for 89 years, was destroyed by some errant bets on a derivative security called a “credit default swap,” or CDS. It’s a story you’ll read nowhere else.] […]

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The Real Reason for the Global Financial Crisis...the Story No One's Talking About

[Part I of a three-part series looking at how so-called “credit default swap” derivatives could ignite a worldwide capital markets meltdown.] By Shah GilaniContributing Editor Are you shell-shocked? Are you wondering what's really going on in the market? The truth is probably more frightening than even your worst fears. And yet, you won't hear about […]

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Inside Wall Street: The Hocus-Pocus Accounting Tricks That Will Perpetuate the Capital Markets Credit Crisis

[The second installment of a two-part story detailing how accounting machinations have fueled the capital markets credit crisis. Part I appeared yesterday (Wednesday).] By Shah GilaniContributing Editor Who says accounting can't be fun? When it comes to determining capital adequacy and the solvency of banks and investment banks gutted by this historic capital markets credit […]

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Inside Wall Street: Why Hocus-Pocus Accounting Will Perpetuate the Capital Markets Credit Crisis

By Shah Gilani Contributing Editor I once asked my friend – world-famous magician Lance Burton – if he could show me how he did a particular trick. “Can you keep a secret?” he asked. “Of course,” I replied. “So can I,” he said. The point is that the U.S. Federal Reserve, the U.S. Treasury Department […]

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