Feb. 9 (Bloomberg) — Since its inception, the derivatives market has echoed the fairground hawkers’ call to “scream if you want to go faster.” Among the new derivatives, collateralized-debt obligations (CDOs) were particularly hot.
To make a CDO, bankers bundle together a package of other kinds of securities, such as corporate bonds, asset-backed securities (ABSs) or [...]

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The Great Bailout is mostly over for the banks. But for those troubled behemoths of the nation’s housing bust, Fannie Mae and Freddie Mac, the lifeline from Washington just keeps getting longer.
Fifteen months after Fannie [FNM  1.01   -0.02  (-1.94%)   ] and Freddie [FRE  1.21  -0.02  (-1.63%)   ] were effectively nationalized, neither the Obama administration nor Congressional leaders see a quick solution to one of the [...]

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WASHINGTON: President Barack Obama on Monday unveiled a budget projecting a record deficit this year, with billions of dollars to curb unemployment and tax hikes on the rich to tame big fiscal shortfalls.
“It’s a budget that reflects the serious challenges facing the country,” Obama said at the White House after sending the mammoth spending plan [...]

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DAVOS, Switzerland : Global leaders and bankers will be looking for firm signs at the Davos forum this week of China’s determination to control the hot money pouring into its economy.
A year after China’s Premier Wen Jiabao sternly lectured the United States and other western nations at the World Economic Forum for causing the international [...]

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WASHINGTON : The lead author of a World Bank report on the global economy published Wednesday said the bank sees “signs of bubbles” in the Chinese economy, a problem he said the Chinese government acknowledges.
“We can already see some signs of bubbles and signs of tensions in the Chinese economy, in particular in the housing [...]

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Thousands of American homeowners are starting to see their monthly mortgage payments skyrocket, dealing a fresh blow to the already shaky housing recovery.

The widely feared reset of thousands of option adjustable-rate mortgages—where both interest and principal payments rise sharply—is already leaving many homeowners struggling to keep a roof over their head.
“It’s going to kill off [...]

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At a hearing last fall, U.S. Treasury Secretary Timothy Geithner told lawmakers that he and his team were working to put the $700 billion financial bailout fund “out of its misery.” But some in Washington now see a second, backdoor bailout in its place.
On Dec. 24, the Obama administration announced it was extending an unlimited [...]

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By Dakin Campbell and Michael McKee
Oct. 23 (Bloomberg) — U.S. regulators closed more than 100 banks in a single year for the first time since 1992, signaling the financial crisis hasn’t abated for lenders struggling with mounting losses tied to commercial real estate.
Seven banks — three in Florida and one each in Georgia, Wisconsin, Minnesota and [...]

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Oct. 20 (Bloomberg) — A 40 percent jump in Wall Street bonuses this year may bring relief to New York City and Albany as the state and its biggest metropolis struggle with a combined $14 billion in budget deficits this fiscal year and next.
New York investment houses will dole out $26 billion in bonus checks [...]

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This article is the winner in the university category of the Plus new writers award 2009.
On a sunny morning in 2001, a piece of investment plan landed on the desk of Dick Fuld, the then Chief Executive of Lehman Brothers. The document, compiled by a team of maths and physics PhDs, included a calculation to show [...]

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