tag:blogger.com,1999:blog-970611666708740586.post7942792162651408721..comments2023-08-28T11:48:39.554-07:00Comments on Reserved Place: Guaranteed to be no betterRebelEconomisthttp://www.blogger.com/profile/13241098878248190971noreply@blogger.comBlogger8125tag:blogger.com,1999:blog-970611666708740586.post-35856595709010530672009-04-17T09:25:00.000-07:002009-04-17T09:25:00.000-07:00DI: do you mean Cap[ital] structure arbitrage, i.e...DI: do you mean Cap[ital] structure arbitrage, i.e. relative value trades between different parts of the cap structure (e.g. the current Citi preferred/common "arbitrage")? If so, then I don't see any systemic implications of this style of trading.MWnoreply@blogger.comtag:blogger.com,1999:blog-970611666708740586.post-90167888973454363932009-04-17T08:39:00.000-07:002009-04-17T08:39:00.000-07:00DI,
I am afraid I am not sure exactly what you me...DI,<br /><br />I am afraid I am not sure exactly what you mean by credit arbitrage. If you mean switching between debt of different issuers according to whether their returns are comensurate with risk, I suspect that, actually, there was not enough of this during the boom - ie risky debt was priced too high.RebelEconomisthttps://www.blogger.com/profile/13241098878248190971noreply@blogger.comtag:blogger.com,1999:blog-970611666708740586.post-46372296211711435492009-04-16T10:30:00.000-07:002009-04-16T10:30:00.000-07:00Hi,
I would like to know more on Credit Arbitrage...Hi,<br /><br />I would like to know more on Credit Arbitrage and what can be its implications if the scheme gets out of hand in this time of Recession?<br /><br />Waiting for your replyDivine Inerceptionhttp://clonedtosay.blogspot.com/noreply@blogger.comtag:blogger.com,1999:blog-970611666708740586.post-82868355379900277632009-02-19T09:37:00.000-08:002009-02-19T09:37:00.000-08:00Thank you. On a related note, the recent investmen...Thank you. On a related note, the recent investment in Barclays looks like it could preclude nationalisation (though Nomura downplayed that suggestion). The original story is here: http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/4309296/Barclays-may-lose-control-to-Gulf-investors.html/Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-970611666708740586.post-83881169871669600692009-02-18T07:17:00.000-08:002009-02-18T07:17:00.000-08:00MW,An excellent point, which I just read in the co...MW,<BR/><BR/>An excellent point, which I just read in <A HREF="https://www.blogger.com/comment.g?blogID=3782644139927778760&postID=445525427293415858&isPopup=true" REL="nofollow">the comments on naked capitalism</A> is the effect of SWF stakes in the banks - none I know of in Ireland, some in the UK and even more in the US. Such stakes, especially if they were taken in the early stages of the financial crisis with the tacit encouragement of the government concerned, must make it difficult to nationalise banks, especially with substantial losses to shareholders.RebelEconomisthttps://www.blogger.com/profile/13241098878248190971noreply@blogger.comtag:blogger.com,1999:blog-970611666708740586.post-78516154135148722032009-02-18T06:19:00.000-08:002009-02-18T06:19:00.000-08:00Thank you for your reply. My question was not int...Thank you for your reply. My question was not intended to be rhetorical; apologies if it read that way.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-970611666708740586.post-22600196271976711822009-02-17T11:00:00.000-08:002009-02-17T11:00:00.000-08:00MW,I assume that your question is partly rhetorica...MW,<BR/><BR/>I assume that your question is partly rhetorical.<BR/><BR/>Actually, as you are probably aware, the nature of the guarantees is not the same in each case. The Irish and initial UK guarantees were of the banks' liabilities, aimed at forestalling runs on the banks. The guarantees now being proposed apply to the banks' assets, with the aim of limiting uncertainty about the banks' solvency (or perhaps in the US case, limiting the exposure of an aggregator buyer of the troubled assets).<BR/><BR/>In my view, state seizure of any bank that cannot service its liabilities is the ideal solution, because you neither want the continued existence of a zombie bank with (potentially) diluted shareholders inclined to "gamble for redemption", nor the disruption of bank closures and liquidations. I can see the disadvantages of state ownership of banks (inefficiency, crony lending etc), but it should not take long to recapitalise a nationalised bank, replace the failed managers, and re-float it.<BR/><BR/>For cultural reasons, the US may resist the nationalisation solution for longer than Ireland or the UK, but, as <A HREF="http://krugman.blogs.nytimes.com/2009/02/14/stressed-for-success/" REL="nofollow">Krugman suggests</A>, will eventually accept it when there seems to be no remaining alternative.RebelEconomisthttps://www.blogger.com/profile/13241098878248190971noreply@blogger.comtag:blogger.com,1999:blog-970611666708740586.post-10187397776192122732009-02-16T06:39:00.000-08:002009-02-16T06:39:00.000-08:00A question for you: Ireland went down the guarante...A question for you: Ireland went down the guarantee route and is now nationalising. The UK went down the guarantee route and is now talking about nationalising. Why will the US be any different?Anonymousnoreply@blogger.com