This is just a short note, with little actual utility, but it’s about something that’s really bothering me.
Why are we so calm? What has anesthetized us?
I’ve had numerous conversations with market-makers in and around our business and many, not all, but many, seem very relaxed about the here and now. I hear: Spreads
Conspiracy theory fans, tin-foil hat wearers everywhere, Nostradamus wannabes, the broadly unhinged and, of course, our professional purveyors of doom and gloom roosting on evening cable news see patterns where there are none, embrace straight-line projections based on disparate and unrelated data and loudly and often shrilly bleat that the end is nigh. That’s all
As is our tradition here at Crunched Credit, each year, about this time, we award our Golden Turkey Awards. Once again, I must say that we are utterly blessed with so many worthy candidates. The truly deserving have once again wrangled with vision and astounding persistence to earn a spot on our acclaimed list. To
We’re all just back from CREFC and the mood was broadly constructive. (Don’t you love that word, “constructive”? When did “constructive” become a fancy way to say “good”?) We all went to South Beach this year wondering where the investors were, wondering whether the market was okay and wondering whether December was a blip or a coda. If the industry chatter captured the gestalt, and the gestalt is right, then while this recently strong market will surely expire at some point, this is not that point.
Amongst the frolicking in Goldilocks Land in SoBe, there were some actual issues discussed. One of these that got some attention, at least by the wonkier members of the crowd, is the new risk retention rules out of Europe.
We’ve written about these before. It is very much a moving target. If you think the American rulemaking process is baroque, turgid and opaque, spend some time in Brussels.
Continue Reading More Fun With Risk Retention: Europe and Japan Weigh In
It’s that time again for Dechert’s CrunchedCredit Annual Golden Turkey Awards. In a year made most remarkable by the extraordinary performance of the US economy, idiocy, silliness, pigheadedness and stupidity have tended to be somewhat obscured by the economic good news machine. At the other end of the spectrum, the continued high volume of outrage over almost everything from both the left and right (and I’m sure the middle would do their fair share here if there was anyone at home) makes it harder to suss out the truly memorable and award-winning, but it’s our job to try. As we have said in the past, this would be really hard if the world actually behaved in a predictable, rational, Newtonian universe sort of way, but blessedly it does not.Continue Reading 2018 Golden Turkey Awards
The Wall Street Journal recently reported that the Papacy has denounced securitization characterizing it (in such an intellectually balanced way) as tainted by “predatory and speculative tendencies.”
Good Lord!
Now, I’m not perfect — I can’t remember the last time I participated in a black mass, inverted a crucifix or committed any of the more striking of your basic mortal sins — but I did close a securitization last week and now I’m worried.
Continue Reading God Hates Securitization?
Maybe it’s because I have been in Europe this past week (Munich at Octoberfest actually – Men in way-too-short leather shorts, dirndls, beer steins the size of a politician’s ego, the most astonishing amount of drinking, etc. Good heavens.) I have been wondering: Has anyone been paying attention to what’s happening in Europe lately? You’ve read about Europe periodically in this commentary because we think that the financial success of the European Experiment continues to matter a lot for financial markets in the US and for the US economy more broadly. Here’s a flash, it is still broke.
Continue Reading Remember Europe? Harshing My Mellow
And now to return to our commentary a few weeks back about the stultifying impact of ill-thought through rules and regulations (at best) (Brexit has intervened). This is our Regulatory State which broadly attempted to pick winners and losers and modify market behavior, to get an engineered outcome by using the blunderbuss of proscriptive rules and regulation.
Continue Reading A Trip Through the Labyrinth – The Regulatory Man in Full
On June 6, 2016, the Rapporteur of the European Parliament released a draft legislative resolution to modify EU Risk Retention. The stated goal of this draft is to promote “Simple, Transparent and Standardized” (STS) securitization. Since STS securitization assets must be fully self-liquidating, commercial real estate (CRE) is again left out in this proposal; not
You know, there’s never a dull moment when one reports on the regulatory states’ endless and so often fruitless and wrong-headed tinkering with the global economy. So now… let’s talk bail-in. The bail-in regime, which was adopted by all European Union countries (other than Poland) and implemented on January 1, 2016 (European Economic Area (EEA) members Norway, Iceland and Lichtenstein are required to adopt the regime by December 31, 2016), permits European financial regulators to “bail-in” a failing institution by cancelling, writing-down, or converting into equity certain of the institution’s unsecured liabilities. Affected institutions must include a contractual recognition clause in its non-European-law governed contracts, so that all counterparties acknowledge that the institution’s liabilities are potentially subject to bail-in and agree to be bound by them.
Continue Reading Bail-In, or Just Bailing?