independent.academia.edu/RajatBh … DO-markets
Financial Chernobyl or Manageable Risk - The Brewing Storm in sub-prime and CDO markets
Published in the Hedge Fund Journal, London in September 2007
This paper predicted the brewing problems in the sub-prime and CDO markets at a time when Ben Bernanke and Hank Paulson were assuring everyone that the worst of the crisis was behind us. Published in September 2007, the paper analyzed the causes of the sub prime and CDO crisis and explained whether the crisis was avoidable if at all.
marketwatch.com/story/aig-su … alysts-say
AIG subprime concerns overdone: analysts
Aug. 1, 2007
By Alistair Barr, MarketWatch
Insurer has roughly 4% of assets in subprime mortgage-related securities
SAN FRANCISCO (MarketWatch) – Concern about American International Group’s exposure to subprime mortgages is overdone, analysts said on Wednesday.
AIG (AIG 40.65, -0.09, -0.22%) shares dropped more than 8% in July as investors worried the giant insurer could be hit by losses from declines in the value of subprime mortgages.
Several analysts published research on Wednesday estimating AIG’s exposure and two said that if the company did experience losses, it would be manageable.
“Subprime fears (are) unnecessarily weighing on AIG shares,” Goldman Sachs analyst Thomas Cholnoky wrote in a note to clients.
“AIG’s shares have fallen significantly in past days. Why we don’t exactly know, but investors are telling us that it has something to do with the potential for AIG to suffer significant losses from subprime mortgages,” Paul Newsome, an analyst at A.G. Edwards, wrote in another note. “Even in a worst-case scenario, we think AIG’s subprime mortgage losses would be manageable.”
AIG CEO says subprime risk manageable, shares rise
NEW YORK | Wed Dec 5, 2007
By Ed Leefeldt
(Reuters) - American International Group Inc (AIG.N) shares rose nearly 5 percent on Wednesday after the world’s largest insurer quelled investor fears by telling them its risks from the subprime crisis were manageable.
AIG Chief Executive Martin Sullivan and other top officials said in a presentation to investors that while defaults and foreclosures in the housing market would continue through 2008, they were unlikely to cause the insurer major damage.
“U.S. residential housing exposures are manageable given AIG’s size, financial strength and diversified global businesses,” he said.
nytimes.com/2007/03/29/busin … .html?_r=1
Manageable Threats Seen by Fed Chief
Published: March 29, 2007
By JEREMY W. PETERS and EDMUND L. ANDREWS
WASHINGTON, March 28 — Ben S. Bernanke, the Federal Reserve chairman, said Wednesday that he did not expect the escalating problems in the mortgage lending business to spread to the rest of the economy, but noted that the Fed had given itself the “flexibility” to adjust interest rates should the outlook change for better or for worse.
In his first remarks on the economy since the Fed decided last week to leave interest rates unchanged, Mr. Bernanke did not stray far from the monetary policy statement the central bank issued with its decision. Inflation is still the predominant concern, and the economy does not appear to be in danger of slowing too much, he said in testimony to the Congressional Joint Economic Committee.
nytimes.com/2010/09/03/busin … ssion.html
Bernanke Says He Failed to See Financial Flaws
Published: September 2, 2010
By SEWELL CHAN
WASHINGTON — Ben S. Bernanke, who told Congress in 2007 that the subprime mortgage crisis was “likely to be contained,” said Thursday that he had failed to recognize flaws in the financial system that amplified the housing downturn and led to an economic disaster.
Mr. Bernanke said that when he made his remarks in 2007 he thought the subprime problems were “manageable.”
Anglo Irish Bank bailout “manageable”- central bank head
HONG KONG | Mon Aug 16, 2010
(Reuters) - Ireland’s bailout of Anglo Irish Bank ANGIB.UL, a key factor behind the country’s soaring budget deficit, is “costly but manageable,” the head of its Central Bank said on Monday.
Patrick Honohan, who is also part of the European Central Bank’s (ECB) governing council, said the total cost of bailouts of all Ireland’s banks and financial institutions would be around 20 percent of GDP.
Honohan said last week the net cost of the recapitalisation would reach 15 to 16 percent of economic output, though the final bill would depend on the price Anglo got on sales of loans to Ireland’s bad bank scheme.
“It’s a terrible shock to the system. It’s costly but it’s manageable.” Honohan said on Monday during a speech in Hong Kong.
Ireland extends bank guarantee; spot "manageable"
Tue Sep 7, 2010
By Carmel Crimmins and John O’Donnell
Ireland extends guarantee for short-term liabilities
Irish bond spreads hit fresh record
Cowen says situation manageable
Irish funding largely complete; t-bill auction Thursday
BRUSSELS/DUBLIN, Sept 7 (Reuters) - Ireland on Tuesday extended its guarantee for short-term bank liabilities, including corporate and interbank deposits, as expected as the government sought to reassure investors.
Irish Prime Minister Brian Cowen insisted the economic situation was manageable.
“It is clear that we have to deal with the situation, which we believe is manageable. There has been turbulence generally in the international bond markets for some time and you have seen ebbs and flows in terms of sentiment,” he told reporters.
Ireland to present manageable Anglo Irish plan -PM
DUBLIN, Tue Sep 28, 2010
(Reuters) - Ireland will soon present a manageable plan to deal with Anglo Irish Bank [ANGIB.UL] and it will do all that is needed to build the confidence of investors, Prime Minister Brian Cowen said on Tuesday.
Asked if record high borrowing costs will mean Ireland will soon be shut out of markets and will need to access a euro zone rescue fund, Cowen said Ireland had already raised enough funds to see it through the middle of next year.
“We are determined to do what’s necessary to achieve international confidence and build domestic confidence,” Cowen told reporters.
bloomberg.com/news/2010-09-0 … -says.html
Anglo Irish’s Bailout Won’t `Bankrupt’ Ireland, Finance Chief Lenihan Says
Sep 6, 2010
By Finbarr Flynn
Ireland’s Finance Minister Brian Lenihan said the bailout of Anglo Irish Bank Corp. won’t bankrupt the country and the costs are “manageable.”
“I was a bit concerned at the suggestion a lot of public opinion believe that Anglo Irish will bankrupt the country,” the minister said in an interview with national broadcaster RTE today. “That’s simply not the case.”
businessweek.com/news/2010-0 … able-.html
Ireland’s Lenihan Says Anglo Irish Cost ‘Hugh,’‘Very Manageable’
September 22, 2010
By Dara Doyle
Sept. 22 (Bloomberg) – Irish Finance Minister Brian Lenihan said that while the cost of rescuing Anglo Irish Bank Corp. is “huge,” it is “very manageable.”