Monthly Archives: May 2012

Michael Crimmins: Jamie Dimon’s Illegal “Cookie Jar”

By Michael Crimmins, who has worked on risk management and Sarbanes Oxley compliance for major banks

The bad news just keeps on coming in the JP Morgan CIO scandal. We’re getting a lot of salacious detail, but the media manages to continue to miss the bigger picture.  On Tuesday, David Henry at Reuters coined a wonderful catch-phrase that should prove difficult for JPMorgan to explain away to its depositors and to the rest of us -  “JPMorgan dips into cookie jar to offset ‘London Whale’ losses”.

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Bill Black: Career Limiting Gestures (CLG): Trying to Speak Truth to Congress

By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Cross posted from New Economic Perspectives.

At the large law firm where I began my professional career we were warned about making “career limiting gestures” (CLGs).  I confess to being an expert in committing CLGs, such that I am unemployable in the federal government.  I’m a serial whistle blower who blew the whistle too often and too effectively on too many prominent politicians and bosses running my agency.  One of the proofs of what a great nation America is capable of being is that I survived and the prominent politicians and agency heads who tried so hard to destroy my career and reputation failed.  Indeed, in the process they helped to make me an exemplar that public administration scholars use to illustrate how regulators should function.  The latest act of Congress disinviting me from speaking truth to power has caused me to ruminate on CLGs.  I have concluded that they are essential to effective regulation.

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The Career of Reaganite Barney Frank

Most Democrats think that they belong to the party of the little guy, the party that attempts to constrain Wall Street.  Sometimes a Democrat won’t fight hard enough, or, like Obama, will make political calculations that shave off the better angels of their nature.  This myth says that Reagan deregulated, and Bush led us into […]

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Barney Frank: Obama Rejected Bush Administration Concession to Write Down Mortgages

Here’s Barney Frank, in an exit interview recently in New York Magazine, revealing unwittingly that Obama during the transition rejected a Bush administration concession to write down mortgages.  Here’s what Barney said.

The mortgage crisis was worsened this past time because critical decisions were made during the transition between Bush and Obama. We voted the TARP out. The TARP was basically being administered by Hank Paulson as the last man home in a lame duck, and I was disappointed. I tried to get them to use the TARP to put some leverage on the banks to do more about mortgages, and Paulson at first resisted that, he just wanted to get the money out. And after he got the first chunk of money out, he would have had to ask for a second chunk, he said, all right, I’ll tell you what, I’ll ask for that second chunk and I’ll use some of that as leverage on mortgages, but I’m not going to do that unless Obama asks for it.  This is now December, so we tried to get the Obama people to ask him and they wouldn’t do it.

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All Eyes Turn to Spain

By Delusional Economics, who is horrified at the state of economic commentary in Australia and is determined to cleanse the daily flow of vested interests propaganda to produce a balanced counterpoint. Cross posted from MacroBusiness.

The news from Europe was all Spanish overnight as the country continues to struggle to find traction on any plan that will lead it away from the need for external help:

Spain backtracked on a plan to use government debt instead of cash to bail out Bankia, as Prime Minister Mariano Rajoy struggles to shore up the nation’s lenders without overburdening public finances.

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Drug Warrior and Pro-Drone Democratic Congressman Silvestres Reyes Goes Down Hard

Matt Stoller is a fellow at the Roosevelt Institute.  You can follow him on twitter at http://www.twitter.com/matthewstoller

Yesterday, we hit a turning point in the war on drugs.  Pro-legalization Democratic Congressional candidate Beta O’Rourke defeated eight term Democratic incumbent Silvestre Reyes in a bitterly fought and exceptionally vicious primary yesterday in a Texas border district, where the war on drugs was a central issue.

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Randy Wray: MMT Without the JG?

By L. Randall Wray, a Professor of Economics at the University of Missouri-Kansas City and Senior Scholar at the Levy Economics Institute of Bard College. His book, Modern Money Theory, will be available in August. Cross posted from New Economic Perspectives

Lambert here. As MMT increasingly gains mainstream popularity and some traction in policy-making circles, some MMT popularizers, both advocates and detractors, have found a policy prescription put forth by MMTers — the Jobs Guarantee (Mitchell; Mosler; Kelton) — problematic. Wray’s post adddresses their concerns.

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The contentious issue is this: can one adopt MMT while rejecting the JG?

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False dawn in Greece

By Delusional Economics, who is horrified at the state of economic commentary in Australia and is determined to cleanse the daily flow of vested interests propaganda to produce a balanced counterpoint. Cross posted from MacroBusiness.

European markets were lead by Greek equities which were up 6.8%, attempting a bounce last night on the news that:

Greece’s conservatives have regained an opinion poll lead that would allow the formation of a pro-bailout government committed to keeping the country in the euro zone, a batch of new surveys showed on Saturday.

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Satyajit Das: The Great Pretender – India’s Economic Past & Future, Part 3: Political Atrophy

By Satyajit Das, derivatives expert and the author of Extreme Money: The Masters of the Universe and the Cult of Risk (2011). Jointly posted with Roubini Global Economics

In the aftermath of the global financial crisis, optimists hoped that the BRIC (Brazil Russia India China) would drive the global economic engine. But China’s economic growth has slowed to its lowest rate in three years. Brazil’s economic growth has fallen from around 7.5% to under 3%. Russia’s economy is heavily dependent on oil and energy prices. India also has stalled. This 3-part paper looks at the development and future trajectory of the “I” in the “BRIC”. The third part looks at the India’s inability to confront its current problems.

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