Monthly Archives: April 2011

Your Humble Blogger Asked Larry Summers a Question He Did Not Like

A funny thing happened at the INET conference. First, I got to ask Larry Summers a question because Martin Wolf, who was moderating the session, is a good sport. Normally, at this sort of event, only At Least Semi Big Names get to interact with Big Names. Yours truly is a minimum of a rank or two below At Least Semi Big Names.

You will find our question at 55:40.

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Mirabile Dictu! Economists Agree All the Fed Has Done is Goose Financial Markets!

You heard it first in the blogopshere. From the New York Times:

The Federal Reserve’s experimental effort to spur a recovery by purchasing vast quantities of federal debt has pumped up the stock market, reduced the cost of American exports and allowed companies to borrow money at lower interest rates.

But most Americans are not feeling the difference, in part because those benefits have been surprisingly small….

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Latest “New Normal” Sighting: Divorce Rebound

A Financial Times article discusses an unlikely indicator of recovery: divorce rates have risen. One divorce attorney commented, “There is huge pent up demand.” Another lawyer, who was apparently a decent representative, said her business had increased 25% compared to the same period last year.

But the post crisis economy has led to some changes in tactics:

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Guest Post: Predicting the Improbable– Evidence from Playing the Lottery

By Claus Bjørn Jørgensen , Sigrid Suetens, and Jean-Robert Tyran. Cross posted from VoxEU.

Japan’s trio of tsunami, earthquake, and nuclear disaster has left the world stunned. As this column points out, even the experts were shocked. But while these events were highly unlikely, they were still possible. This column uses evidence from the Danish lottery to show that people tend to adjust their expectations of future events based on only small pockets of recent experience, often at their cost.

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We Speak on BNN About the S&P Negative Watch for US Debt

I had hesitated to post this video, since I wasn’t too happy about it. Just before the segment was about to start, I got a cross feed on the audio, which meant I was listening to another show! I had to open the door to my itty bitty booth and yell to the production guys to fix it (I was already tethered so I couldn’t really go anywhere). This happened twice. The remote video was also on a big delay, so I couldn’t watch it to see my hosts.

I think that got me sufficiently adrenalined up that I got a bit stroopy and also invoking ideas (like gold standard versus fiat currency constraints) without explaining them enough.

Oh well. One reader thought it was OK and chided me for not linking to it. Hope you like it.

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Another Class Action Suit Filed in Federal Bankruptcy Court Against Lender Processing Services

The noose is tightening around Lender Processing Services.

Last week, various news outlets revealed that Federal banking regulators had issued consent orders against major servicers, MERS, and LPS. Kate Berry of American Banker pointed out that LPS is exposed to making payments to servicers:

In addition to the 14 biggest mortgage servicers, two of the biggest vendors to the industry received cease-and-desist orders from regulators Wednesday. One was stronger than the other.

Lender Processing Services Inc. and Merscorp Inc.’s Mortgage Electronic Registration System were both cited for “significant compliance failures” and “unsafe and unsound business practices” related to foreclosures. Regulators are requiring both companies to hire independent consultants, take remedial steps to address past failures and hire additional staff.

But only LPS, a publicly traded company in Jacksonville, Fla., that provides foreclosure-related services to banks, faces the possibility of having to reimburse servicers and borrowers if an independent review finds anyone was financially harmed by its failure to properly execute mortgage documents….

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Sheila Bair as Head of CFPB?

Economics of Contempt and I are typically at loggerheads on financial services industry policy matters (he’s far too positive about the bank reform measures for my taste, even though his technical explanations are always instructive). But he had an inspired idea today:

I think Obama should seriously consider Sheila Bair for the CFPB job….

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Matt Taibbi Follows the Money in Iowa AG Tom Miller’s Faux Tough Posture in 50 State Mortgage Settlement Negotiations

We’ve taken aim repeatedly at Tom Miller’s obvious soft touch toward banks in his role as lead negotiator in the 50 state attorney generals negotiation over foreclosure abuses. Some of his questionable actions:

Promising to put people in jail, then quickly reversing himself

Working closely with the bank-friendly Treasury Department when the state and Federal legal issues are very different, rendering the rationale for cooperation suspect…..

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Semi-Nude Parliamentary Candidate Protests Against Banker Pay At RBS AGM

I missed this extraordinary scene. When the aspiring politician Kit Fraser stripped to his boxer shorts outside RBS’s annual shareholder meeting last Tuesday, I was already inside the meeting, listening to chairman Sir Philip Hampton defend the bank from shareholder allegations that he had lost the plot on pay.

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Musings on Plutocracy

I trust readers don’t mind that we are a bit heavier than usual on the political-related postings tonight, since this is a slow news week. But that may be useful, given that the big new subtexts at the INET Conference were the importance of “political economy” (three years ago, that expression was seen as having a decidedly Marxist color to it) and the rising wealth and power of the top 1%.

One nagging question is how the increased concentration of income and wealth in the top strata came to pass. The story that this group and their hangers-on would have us believe is that it is all the result of merit and hard work. Two offerings raise doubts about that line of argument.

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