John Dizard/2008

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Articles: 2008

  • Democratise the credit markets for fast relief - Stability could be offered by having fewer overleveraged institutions and having large numbers of real money investors, watching their own money - 21st December 2008
  • A sound case for mark-to-market moderation - When the US bail-out bill was passed in mid-October, there was some hope among bankers who were being marked-to-market to death that they might get some relief from the accountants’ relentless shredding of their balance sheets - 15th December 2008
  • Put the CDS market out of its misery - “Effectively, there isn’t any CDS market now.” - 8th December 2008
  • How to get back to market values - The ultimate solution is likely to come from the democratisation of risk valuation - 1st December 2008
  • Banks need to revisit DIP lending - Banks need to recreate their work-out groups and re-enter debtor in possession lending - 24th November 2008
  • Weirdly, Tips yields point to deflation - The disappearance of dealer and arbitrageur capital is continuing to have wide-ranging consequences - 18th November 2008
  • Life stirs again in Muni bond market - The tax advantages of US municipal bonds, along with the Obama team’s spending policies, give them support that other vehicles lack - 9th November 2008
  • Policy tribes need to show restraint - The policy people won’t consider, let alone disclose or discuss, the second order risks of what has been done so far – they still need to tread carefully - 2nd November 2008
  • Firefighters better save shipping next - It was not necessary to sacrifice the worldwide flow of goods and credit to make an example of Lehman – shipping better be the next fire they put out - 26th October 2008
  • Now it is the turn of the emerging banks - There just isn’t enough money in the emerging market world to save everyone, and unlike richer countries they don’t have virtually unlimited swap lines - 21st October 2008
  • What enemies of short selling missed - Instead of looking for new sacrificial goats to replace the short sellers, the policy tribe should concentrate on solving the abandonment of Libor - 12th October 2008
  • Bail-out plan was puny in its level of planning - This column has been pushing the issuance of Fed or Federally sponsored preferred stock, and that has become the conventional wisdom - 5th October 2008
  • Big fixes for big market collapses - The government- sponsored recaps will be larger, and the structures more varied, than you have heard so far - 28th September 2008
  • Solution to be found in the history books - It’s been done before. In 1932 the Reconstruction Finance Corporation was set up. It gave loans to corporations ... it allowed lending to re-start - 21st September 2008
  • US Treasury moves fail to help recovery - Hank Paulson and his team have shown weakness. They have fired their ‘bazooka’ with the Fannie Mae and Freddie Mac actions, and we’re still in trouble - 14th September 2008
  • Virtual banking leads to virtual work-outs - Hedge fund and private equity partnerships are winding up as the owners of defaulted debt, but the outlook is not as gloomy as some say - 7th September 2008
  • A measured view of GSE preferreds - In the now overcrowded world of investing in distressed securities, the standard strategy is to pick the “pivot” issue - 31st August 2008
  • State injection for Fannie and Freddie will offset pain - Most of the time, the path to survival in financial bureaucracies is through company-party-line on-message bullishness. That's particularly true in the US, where pessimism about the future is not just bad business, but unpatriotic - 26th August 2008
  • A misguided game of SOx and NOx - It is usually a mistake to bet against the ability of the Washington lobbyists to find a way to fix a problem that will cost a powerful industry a lot of money. Usually, but not always - 18th August 2008
  • Monoline firms may be sick, but they are not dead - Even with the little setbacks we’ve had in the last week or so, I still believe we are in the first phase of an equity bull market. We haven’t really had one in a while; not since March of 2000, in truth - 3rd August 2008
  • A costly cap on the cap-and-trade - For all the time and money spent on climate change seminars, green-themed corporate graphics, and oil company adverts with loving depictions of windmills and meadows, few seem to have taken notice of a US Court of Appeals’ July 11 drive-by slaughter of the Clean Air Interstate Rule - 27th July 2008
  • US gains from nuclear competition - A company that had a US monopoly on producing the electric utilities’ fuel of the future, USEC, is facing a brownout that could turn pretty black - 20th July 2008
  • Desperate times call for desperate measures - I have what Wall Street calls a Strong Buy recommendation: buy the senior debt of Fannie Mae and Freddie Mac - 13th July 2008
  • Finding some sure things to bet on - La Perse peut lever et entretenir un assez grand nombres de troupes; mais dans ses armies il y a des hommes et point de soldats - 6th July 2008
  • Betting on the possibility of breaking up the eurozone - A cloud no larger than a betting slip - but one that could be joined by some rather larger, darker, formations - has moved - 1st July 2008
  • Playing with eurozone futures - A cloud no larger than a betting slip has moved over European monetary union, which could be joined by some rather larger - 29th June 2008
  • Politicians' oil argument is flawed - When I wrote last month about the US politicians' attacks on oil and grain speculators, I assumed the issue would dry up - 24th June 2008
  • Banks carelessly ‘cross the streams’ - Dr Egon Spengler: There’s something very important I forgot to tell you. Dr Peter Venkman: What? Dr Egon Spengler: Don’t cross the streams. Dr Peter Venkman: Why? Dr Egon Spengler: It would be bad. Dr Peter Venkman: I’m fuzzy on the whole good/bad thing. What do you mean, “bad”? - 15th June 2008
  • Get used to underwriting big lenders - A long, long time ago, say two years or so, my speculator friends would complain about the "over-arbed" world they lived in - 8th June 2008
  • A free lunch available for the few - For most people in the financial world, the first wave of the credit crisis was like a theme park ride or summer blockbuster - 1st June 2008
  • Commodity speculators in line of fire - As is well known, speculators are clearly responsible for high commodities prices. All of them are using the high profits - 25th May 2008
  • Avoiding financing a big black hole - There seems to be a misconception going around about the purpose of housing finance rescue legislation in Washington - 8th May 2008
  • Countrywide deal is far from shot - It's too early for pheasant shooting in the Washington area, but for those politicians with a sporting disposition, it's Angelo Mozilo season - 11th May 2008
  • Wrong time to enter vulture business - At about this stage of a US economic cycle - that is, past the beginning of a growth decline and just entering the first bear market rally – you see a large number of new recruits to the vulture business - 4th May 2008
  • Advice for the scapegoat Citigroup - Financial crises and panics are, perversely, entertaining. Officials and bank directors get to jet hither and yon for last-minute rescues, journalists get big headlines and the attention they believe they deserve, people's voices rise in pitch. For once the business world is like the biggest ride in an expensive theme park - 27th April 2008
  • Jerry-built structure will have to go - Credit market people and their regulators have been so preoccupied with defusing the more visible unexploded bombs in Wall Street that the more serious long-term structural problems have been put off for later attention - 20th April 2008
  • Fed plan spoilt by banking hypocrisy - Woe unto you, scribes and Pharisees, hypocrites! for ye are like unto whited sepulchres, which indeed appear beautiful outward, but are within full of dead men’s bones, and of all uncleanness. Matthew 23:27 - 13th April 2008
  • Shoving illiquid assets in the drawer - There is a reason why there has never been a comic book superhero based on an accountant. The notion that the accountants and their officials, waving around rules such as FAS 157, would be the ones in charge of the world was always a questionable one - 6th April 2008
  • Guaranteed or not to unlock markets - American financial officials are getting increasingly annoyed at the sneers of their European counterparts - 30th March 2008
  • Raising equity is top of to-do list - With the whipsawing of the markets last week, it has begun to dawn on market people and officialdom that we are not in a - 24th March 2008
  • Haven't we been here before? - The institutional memory of governments and the financial industry now has the lifespan of a fruit fly - 17th March 2008
  • Bank boards need urgent instructions - "We must face the facts. For too long we have been living on bunk." So said Ben "Sell 'em" Smith, American speculator, 1929 - 10th March 2008
  • Value exists between the factions - The credit world is aligning itself into political factions, divided over the right approach to untangling the present mess - 3rd March 2008
  • Mark-to-market requirements turn into Doomsday machine - [Discussing the Doomsday machine]President Merkin Muffley: How is it possible for this thing to be triggered automatically - 25th March 2008
  • When price does not mean value - If hedge and proprietary fund managers were to continue to follow the strategies and risk management disciplines they laid - 18th February 2008
  • Surviving a downgrade plague - The disappearance of much of the speculative capital that had been committed to the "credit space" has led to ionospheric yields in the US municipal bond markets - 11th February 2008
  • Not just price of platinum to blow - Right at the moment when we really didn't need another gasket to blow in the economic-financial engine, one has - 4th February 2008
  • On-balance sheet world returning - At the beginning of the year I floated a deliberately heretical thought: that it would be impossible to adequately - 28th January 2008
  • Time to assess the long and short of a turbulent year - While this column (and the rest of the Financial Times) is not an investment advisory service, I like to do a once-over, year-end review of how the ideas floated here worked out - 21st January 2008
  • Time to see if established credit agencies make the grade - This is the time of year when incentive compensation is calculated and distributed. Or would have been distributed, I should in the case of loss-making trading desks and hedge funds - 14th January 2008
  • Gold is a bright prospect for the bold - Peter Palmedo, a portfolio manager based in Sun Valley, Idaho, has something even better than a flagship fund that profited mightily from the rise in gold: the right to say “I told you so.” - 11th January 2008
  • Revisit the reviled concept of supervisory goodwill - The big question for the investment world during the next several months is whether the credit markets can be rebooted with the tools Wall Street and the central banks have devised so far - 7th January 2008