Category Archives: Credit markets

Bill Black: How the “Super Crunchers” Became the “Super Torturers” of Finance Data

Many of the concerns about Big Data focus on the surveillance apparatus used to collect it, or on the naive modeling approaches, like attributing causality to mere correlations. Here Black addresses an established problem: that of deliberate abuse of models.

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Greece Threatens to Miss IMF Payment, Issue Drachma (Updated)

Greece has decided to up the ante in its negotiations with the Troika. The open question is whether the latest move, the press leak via Ambrose Evans-Pritchard at the Telegraph that Greece will miss its April 9 payment to the IMF so that it can continue to make pension payments, and has started to make plans to issue the drachma, are game-changers that Greece hopes they will be.

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Greece Throws Away One of Its Eurogroup Memo Wins, Submits Reforms Reaching Up to a 3.9% Fiscal Surplus

One of the things we’ve stressed is that the Greek government’s repeated claims that it is submitting an anti-austerity reform package is untrue. The Greek government committed to achieving a fiscal surplus of 1.0 to 1.5% and has separately said it will always run a fiscal surplus. We have stressed that running a fiscal surplus is an economic dampener, and is even more damaging in a severely depressed economy like Greece.

So what has Greece done? It has submitted a reform package that it says will meet an even higher fiscal surplus target.

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Tom Adams: The Ocwen Meltdown: When a Company Discloses Conflicts of Interest, You Should Believe Them

By Tom Adams, securitization professional for over 20 years and partner at Paykin, Krieg & Adams, LLP. You can follow him on Twitter at @advisoryA It’s been a while since I wrote here about Ocwen Financial Corporation http://www.nakedcapitalism.com/2015/02/tom-adams-ocwens-servicing-meltdown-proves-failure-of-obamas-mortgage-settlements.html , the large non-bank mortgage servicer, but things haven’t gotten any better for the company or its […]

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Central Banks Warn: Investors May Get Crushed When They All Run for the Exits

This post illustrates how remarkably short investors’ memories are. Or they may be betting that if they have a big enough hissy fit when monetary authorities raise rates, as they did during the taper tantrum of 2013, that central banks will lose their nerve.

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How Wall Street Used Swaps to Get Rich at the Expense of Cities

This post by Ed Walker provides a detailed description of how badly municipalities have been fleeced when they bought interest rate swaps from Wall Street as part of financings. It isn’t simply that these borrowers were exploited, but that the degree of pilfering was so extreme that the financiers clearly knew they were dealing with rubes and took full advantage of the opportunity.

But what is even more troubling than the fact set here is the failure of the overwhelming majority of abused borrowers to seek to recover their losses. Walker describes that multiple legal approaches lead you to the same general conclusion: the swaps provider, as opposed to the hapless city, should bear the brunt of the losses. So why haven’t cities like Chicago, that have been hit hard by swaps losses, fought back? Walker does not speculate, but in the case of Rahm Emanuel, it’s not hard to imagine that his deep ties to Big Finance are the reason.

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Billl Black: The Lessons Richard Bowen’s FCIC Testimony Should Have Taught the Nation

Get a cup of coffee. This important post gives an in-depth analysis that helps explain how bad conduct was covered up or glossed over by the FCIC, and how much of the media fell in line with the official, sanitized story.

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