The Whiteboard - Most Recent

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What did the Fed just do?

Dec 13, 2012
What did Federal Reserve Chairman Ben Bernanke do yesterday? He put speed limit signs up on the freeway.
Posted In: Federal Reserve, Ben Bernanke
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Shining a light on the shadow inventory

Nov 27, 2012
The housing market looks better, but what about the so-called shadow inventory?
Posted In: Housing, shadow inventory, foreclosures
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Investors desperate for yield make risky bets

Nov 22, 2012
Investors are agreeing to all sorts of crazy terms in order to put money to work in the bond and loan markets. They're baking risk into the system, and that could be a problem for all of us.
Posted In: investors, Investing, risk
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Breaking the covenant

Nov 21, 2012
28 percent of leveraged loans are now covenant-lite. Why does that matter to you? Sr. Producer Paddy Hirsch explains.
Posted In: loans
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Explaining the FHA with help from Uncle Charlie

Nov 20, 2012
What is the Federal Housing Administration and how does it work? Uncle Charlie and Sr. Producer Paddy Hirsch explain.
Posted In: Federal Housing Administration, Housing, loans
2

Shadow Banking - still dangerous

A report by the Financial Stability Board found that shadow banking has grown even larger, to a record high of $67 trillion last year. Many people have blamed shadow banking for aggravating the financial crisis. So, what's shadow banking? We've got a Whiteboard for that!
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Nov 19, 2012
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Is running the government like running a business?

Oct 31, 2012
Running the U.S. economy is just like running a business, right? Not necessarily. Sr. Producer Paddy Hirsch explains the differences between a president and CEO.
Posted In: president, ceo, business, government, elections
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Explaining dividend recapitalization

Oct 23, 2012
Dividend recapitalization: private equity shenanigans or sound common sense? Sr. Producer Paddy Hirsch explains how it works.
Posted In: private equity, dividends, loans
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Are today's jobs numbers real?

Correction: The original version of this story incorrectly identified which portion of the Labor Department’s monthly jobs report is revised. The establishment survey is revised, the household survey (which contains the unemployment rate) is not. The text below has been corrected.


Are today's jobs numbers real? In a word: no.

The news that the jobless rate has dropped to 7.8 percent has set off a firestorm of protest from Republicans. Right-wing pundits, Representatives and gadflies are insisting that Obama or his cronies in the Bureau of Labor Statisitics and the Federal Reserve have cooked the books, to cut the unemployment rate to match Obama's promise to get it down below 8 percent.

But here's the news: We have no clear idea how many Americans are really unemployed.

The BLS announcement today incorporates two pieces of news. First, that non-farming companies reported that they added 114,000 people onto their payrolls in September. Second that a household survey conducted by the BLS indicates that the number of jobless in the US dropped to 7.8 percent.

The BLS household survey is a one-shot thing. So that 7.8 percent number is a snapshot of what the 60,000 households interviewed by the Census Bureau say. The report from companies, on the other hand, is checked more than once. And it almost certainly will change. We won't get a more accurate count until the revised number comes out in a few weeks. As you can see from the animated GIF below, it may be higher; it may be lower. But it won't be the same.

It never is.

 

 


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Oct 5, 2012
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How did boring old mortgages get us into so much trouble?

The New York Times was kind enough to post part of my new book, Man vs Markets on the Bucks Blog today.

The excerpt comes from a chapter in which I talk about the creation of asset-backed securities and their various toxic permutations. They entitled it The Boom and Bust That Your Mortgage Bonds Built. Very catchy!


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Oct 5, 2012

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Financial mysteries explained! Watch the latest video explaining capital adequacy requirements in Paddy Hirsch's Whiteboard series. 

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