Monthly Archives: March 2007

Preview of Next IPCC Report

The summary of the second report is due out this Friday. Oddly, this sneak preview appears, at least so far, only in the Financial Times (I checked the Wall Street Journal and the New York Times). As described below, the second report delves deeper into the nature and scope of likely changes, and how they […]

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Bernanke Argues for Rethinking Community Reinvestment Act

The Wall Street Journal reports tonight on its website, and presumably tomorrow in its print edition, that Federal Reserve Chairman Ben Bernanke said Friday that ongoing issues in the subprime mortgage market could force bank regulators to rethink their enforcement of a 30-year-old law that requires banks to serve the credit needs in their communities…. […]

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The Folly of Bank Mergers

A story in Thursday’s Financial Times, “Global, universal, unmanageable? Why many are wary of bank mega-mergers,” by Peter Thal Larsen describes why most bank mergers fail to live up to their promise. Even though the srticle was prompted by the possible Barclays-ABN Amro merger, its logic applies to much smaller deals. Most advocates of banking […]

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Food Poisoning!

Dear readers, I am afraid you will have to wait till later today at best to hear from me. This is the first time in the last day that I have been able to keep anything (including water) down, and being horizontal still feels like a better idea that being vertical. For your information, according […]

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"A Market Correction is Coming….."

This comment, “A market correction is coming, this time for real,” comes from William Rhodes, senior vice-chairman of Citigroup, and chairman, president and chief executive of Citibank. Consistent with the headline, Rhodes takes a bearish view (in fact, he says he has been concerned about leverage and indiscriminate pricing of risk for some time, and […]

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The Dangers of Overselling, and Overdoing, Global Trade

A very good comment in Tuesday’s Financial Times, “The cheerleaders’ threat to global trade,” by Dani Rodrik, professor of international political economy at Harvard’s Kennedy School. He makes the point that globalization fans may be their own worst enemy by taking the simpleminded point of view that if globalization is good, more globalization is of […]

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More Evidence of Regulators’ Limited Effectiveness

Faithful readers may have read our recent posts on the limits to the Fed’s regulatory authority, both relative to the subprime mess and to the proliferation of new instruments (see here and here and here). We had the spectacle last week of Roger Cole, the Federal Reserve’s director of supervision and regulation appearing before the […]

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"Unwinding the Fraud for Bubbles"

This is a great post by Tanta at Calculated Risk on the classic types of mortgage frauds and how they morphed into new forms due to a unique confluence of buyer naivete and broker/originator greed (oh, and sometimes buyer greed too). She clearly discusses recent versus traditional procedures. Tanta lays considerable blame at the lending […]

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A Very Sensible Observation About Executive Comp

This falls in the “Why didn’t I think of that” category. From Angry Bear: Reader Eightnine2718281828mu5 sent me a couple e-mails. I realized that together they constituted a post. This one is by Eightnine2718281828mu5: ———————————————— I think part of the reason that median salaries don’t rise as fast as CEO salaries is that CEO’s know […]

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Michael Panzner on Subprime Delusions

Michael Panzner at Seeking Alpha has a great post, “Donald Lambro’s Dangerous Suprime Delusions,” which I found a pleasure to read because he takes on a deserving target, namely, a pathologically optimistic piece by Donald Lambro,”Subprime Shakeout Just a Rough Patch.” The piece is fun, in part because Lambro is such a deserving target, and […]

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Larry Summers’ Grim View of Housing and Its Impact on Markets

This story in today’s Financial Times, “As America falters, policymakers must look ahead,” is remarkable because, as far as I can tell, it is the first time a prominent economist has come out and said the unwinding of the housing bubble is likely to have nasty consequences (actually, take that back, Paul Krugman had a […]

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"Toothless Fed"

The post below is from a reader, DS. He focuses on the fact that the Fed has basically admitted that its powers are limited due to the extent of financial activity that takes place outside its purview (the Fed supervises federally-chartered banks; securities firms, which are regulated by the SEC and hedge funds, which are […]

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