Word: dollarization
(lookup in dictionary)
(lookup stats)
Dates: all
Sort By: most recent first
(reverse)
What is to stop speculators from buying up these bastardized securities for pennies on the dollar anticipating enormous profit when the government buys them at higher rates? The current owners of those securities aren't going to want to sell them for pennies on the dollar if they think the government will come in soon and buy them for dimes. That said, I think Treasury would love it if there were private vulture investors bidding for mortgage assets...
Federal loans aren't completely unaffected. While Stafford loans, which are made directly to students and don't take into account credit history, were up in the second quarter compared to a year ago, loans made to parents through the Parent PLUS program have plummeted - down 29% in dollar volume year-over-year, according to Department of Education data analyzed by Kantrowitz...
Then consider the wealth effect, much debated but empirically documented, which suggests that every dollar of increased household wealth will, over a period of time, convert to 3 to 5 cents of spending. Calculators, please: 0.03 times $1.2 trillion equals $3.6 billion in spending. In an economy that is two-thirds consumer spending, that's another growth driver. One other thing about the wealth effect is that it works splendidly in reverse too. There's the prospect that Broun and his colleagues could be serving up a double whammy to households across the country: declining stock market wealth in addition...
...billion dollar losses and complex financial assets, Santander's fortunes speak to the advantages of a simpler approach. Spain's largest bank "lends to their clients, takes deposits from their clients, and runs a network of branches," says Antonio Ramirez, analyst at investment bank Keefe, Bruyette & Woods in London. "It's quite simple, quite traditional." Focused on retail banking, with limited investment banking operations, and with a long-buoyant domestic market to lean on, Santander side-stepped the toxic assets caught up in the collapse of the U.S. sub-prime mortgage market. Enjoying "good growth at home, they were never...
...problem that underlies the financial meltdown in the first place. At every level of American life - from the struggling homeowner who can't afford his mortgage to the failing investment banks that can't meet their collateral requirements to the Federal Government, which can't prop up the drooping dollar - the bottom line is that we've borrowed too much money. We're all over-leveraged...