See here for the introduction to the ZBI.
- Congress/debt ceiling. I spent the Fourth at Fort Bragg (hooah) and the rest of last week in the Central Valley. Folks in the Heartland (a) are not entirely clear about what the debt ceiling is, and (b) are very clear that whatever it is, it is Washington’s fault and Washington should just quit it. Three weeks or so to go (although ratings agency downgrades could be sooner, of course). To quote Buffy: “It turns out I suddenly find myself needing to know the plural of apocalypse.” Current rating : 10 zombie bears and 10 zombie dragons; we are at the zombie maximum.
- Inadequate provisions for improperly-assembled mortgage-backed securities. This isn’t the stuff covered by the BofA settlement (although there may be some overlap) but the more hyper-technical paperwork suits that I don’t think have tracked through the system yet in any great volume. Folks that are plaintiffs in one suit could turn out to be defendants in others. Still worried about this one. Current rating: 8 zombie bears and rising.
- Greece/PIGS. Well, Greece might not be threatening the world financial system . . . this week (although they’re not helping the markets any). But even assuming we do have a fix, they’ll be back unless they address the revenue side of the equation (wonder where else that might apply?). The rest of the PIGS now have to get themselves sorted out. Current rating: 4 zombie PIGS; negative watch list.
- Math/Algorithms. BofE’s Andrew Haldane warns on algorithms and the like. Clever chap, that. Current rating: somewhere between one and an infinite number of zombie bears; variable.
- Hackers. You don’t have to worry about hackers when your employees are willing to give it away. Current rating: 8 sleeping zombie bears; stable.
- Actuaries. I like that GASB is changing the rules so that there is a bit more transparency about pension liabilities for governmental entities. More transparency about assumptions and clarity on actuarial underpinnings is always good. Doesn’t change the fact that everyone’s bust, but at least you can tell earlier. Current rating: 2 zombie bears; falling.
- Cross-border equity custody. Current rating: one lonely zombie bear.
- Bitcoin or something like it. Bitcoin is not currently threatening financial Armageddon but I came across The Economist’s explanation of Bitcoins, which I think is really helpful. If The Economist could bake, I’d marry it. Current rating: one zombie bear and stable.
- Megabank’s Boring Transactions Division. Current rating: no zombie bears for now, but on the watch list.
Commercial Real Estate. Plenty of empty shopfronts in both Fayetteville and Napa. Current rating: no zombie bears; we are still pretending they aren’t there.