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  Tuesday, 16 Nov 2010 | 11:07 AM ET

Oops! Analyst Backpedals from Statement about US Treasuries

Posted By: Ash Bennington

We've all had bad days at the office. And, if you've worked in the financial services industry long enough, it's even likely that you have made a mistake that cost a financial institution some money. (Note: The phrase "Look, bad trades happen!" Is still highly unlikely to buy you much sympathy from your boss.)

Treasury Building
woodleywonderworks
Treasury Building

But when it comes to goof ups: Very few of us have the power to push up the borrowing costs of the federal government of the United States of America.

That's exactly what seems to have happened yesterday to Steven A. Hess, a senior analyst at Moody’s.

The Financial Times Alphaville blog is reporting that Mr. Hess made the following observation to Market News International:

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  Tuesday, 16 Nov 2010 | 10:11 AM ET

Kyle Bass Goes Along on Banks That Are Too Big to Fail

Posted By: Ash Bennington

Kyle Bass at Hayman Advisorsis just not an equities guy .That much has been known for a while.

So when he seems to be shifting up his asset allocation—and taking long positions in financial stocks—it makes you wonder why.

Courtney Comstock over at Clusterstock dug out two very interesting equities positions from Hayman Advisors 13f filing for the third quarter of 2010 .

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  Tuesday, 16 Nov 2010 | 8:50 AM ET

UBS May Lose $41 Billion Due to New European Tax Policy Rules

Posted By: Ash Bennington

Fed's Governor Dudley Seeks to Reassure on Inflation (CNBC) CNBC's Steve Liesman recently spoke to New York Federal Reserve Governor Bill Dudley about a wide range of issues including the dollar, QE2, growth targets, and inflation. Governor Dudley reaffirmed the Fed's ability to withdraw excess liquidity from the economy when higher growth returns: "We are very confident of our ability to exit when the time comes."

»Read more
  Monday, 15 Nov 2010 | 5:46 PM ET

General Motors May Exercise Greenshoe Option and Up Price on IPO

Posted By: Ash Bennington

Ireland to Accept Bailout? (Business Week) Prime Minister Brian Cowen may be signaling a willingness to begin negotiations in earnest over the terms of an Irish bailout by the European Central Bank. Then again, he may not. Says Cowen: “There’ll be further discussions there and, I’m sure, there’ll be discussions thereafter as well.” Although the Business Week article does not explicitly make the point, we can perhaps safely assume that Prime Minister Cowen is referring to ongoing negotiations regarding Ireland's budget plans—and not engaging in a playful imitation of Ireland's celebrated 20th century absurdist playwright, Samuel Beckett.

»Read more
  Monday, 15 Nov 2010 | 5:35 PM ET

Richard Posner: Quantitative Easing Is a Pompous Term for a Program Unlikely to Work

Posted By: John Carney

While a lot of attention has been paid today to the "luminaries letter" in the Wall Street Journal urging the Fed to give up quantitative easing, a similarly aimed if better reasoned piece by federal judge Richard Posner seems to have escaped attention.

In his usual direct style, Posner begins by criticizing the term “quantitative easing” as “a pompous, uninformative term for a central bank’s buying debt (bonds, mortgages, commercial paper, etc.) in quantity in an effort to depress interest rates in order to stimulate economic activity.”

Posner goes on to discuss the problems with quantitative easing. His main objections: It runs the danger of creating runaway inflation; it threatens to upset our global trading partners, and it allows politicians off the hook for making serious economic reforms.

Most importantly, however, he says it won’t work.

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  Monday, 15 Nov 2010 | 4:27 PM ET

Rattner May Find Himself In Trouble Again.

Posted By: Ash Bennington

Current New York Attorney General —and now governor elect —Andrew Cuomo maybe going after Steve Rattner. Again.

Andrew Cuomo
Getty Images
Andrew Cuomo

An article in today's New York Time's DealBook allows us all to relive the whole sordid mess of the scandal that brought us here in the first place.

Cuomo's office, it seems, has issued a new subpoena to Rattner's old firm, the private equity fund The Quadrangle Group. The subpoena seeks new information about Rattner's compensation, and the financial terms of his departure from Quadrangle, where he served in the role of managing principal until his resignation in February of 2009 .

As you may recall, the original complaint stems from Rattner's alleged role in a kickback scandal centering around New York State pension fund business. Cuomo's continued investigation of Rattner is presumably to gain a stronger hand in his ongoing settlement negotiations with him. Rattner has already rejected a $20 million settlement offer from Cuomo's office. The SEC has reached a separate, tentative deal with Rattner—which calls for Rattner to agree to accept a multiyear ban from the securities industry, and to pay the potentially more palatable sum of $6 million.

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  Monday, 15 Nov 2010 | 3:10 PM ET

Will Europe Break Up?

Posted By: Ash Bennington

Is the real threat of the European debt crisis being underreported in the US?

When news articles appear in the United States about the serious problems currently plaguing the European debt markets, the articles tend to focus on the fiscal worries—and consequent default risks—of individual nations. (Regular consumers of business news in the US are certainly familiar enough with the recent stories of Ireland's credit woes).

But are we missing the bigger picture?

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  Monday, 15 Nov 2010 | 2:21 PM ET

NetNet Solves the Budget Deficit—Without Raising Taxes or Touching Social Security

Posted By: John Carney

Following the leads of Barry Ritholtz and Felix Salmon , I decided to take a stab at David Leonhardt's challenge to readers to attempt to reduce the budget deficit by playing with this interactive New York Times graphic .

Deborah Harrison | Getty Images

It’s pretty simple to operate. You get a work sheet with various options to cut spending or increased revenue. The goal is to fill the $418 billion budget hole projected by 2015 and a $1.3 trillion hole by 2030.

I solved the shortfall without raising any taxes or touching the core of Social Security. That is to say, 100% of the fix comes from spending cuts. \(You can read all the details here.\) In the end, I actually overachieved.

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  Monday, 15 Nov 2010 | 1:47 PM ET

Could the European Union Actually Break Apart?

Posted By: Ash Bennington

In an article in today's Financial Times, Portuguese finance Minister Fernando Teixeira dos Santos was discussing the implications of the current simultaneous credit crises in Greece, Portugal, and Ireland.

In reference to the broader framework of the problems faced in Europe today he said the following:

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  Monday, 15 Nov 2010 | 12:27 PM ET

Roubini: 'Inflation Is Not a Problem'

Posted By: Ash Bennington

Despite a huge program by the Federal Reserve intended to provide monetary stimulus to the economy, Nouriel Roubini doesn't think we need to worry about inflation.

Nouriel Roubini
Getty Images
Nouriel Roubini

In fact, he argues that people who take the position that the Fed should curtail its easing policies do not really understand inflation.

In the first two parts of my interview with economist Nouriel Roubini we discussed two issues: Why Professor Roubini believes a gold standard is no longer a viable option for modern economies, and second why monetary easing is a necessary evil .

So let's take a deeper look at Roubini's theory of inflation.

Let's begin with what seems to be the principal conclusion of Roubini's argument. Simply put: "Inflation is not the problem."

Why does he believe that to be true?

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  • NetNet is where you'll find the low-down and the high jinks of Wall Street. It's the place for insider stories, trader gossip, and tales of the foibles of the moneyed crowd and the culture of finance.Wall Street news and commentary served fresh all day long.

 

  • Jeff Cox is finance editor for CNBC.com.

  • Lawrence Develingne

    Lawrence Delevingne is the ‘Big Money’ enterprise reporter for CNBC.com and NetNet.

  • Stephanie Landsman is one of the producers of "Fast Money."

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