Yearly Archives: 2013

For Once, Maybe Lying Does Not Pay: DoJ’s Lanny Breuer Resignation Leaked After Frontline Appearance

I am delighted to be proven to be wrong on the premise of the last post, which is that lying pays and it has become so routine that an op-ed writer for a liberal newspaper can point that out without being concerned about the broader ramifications. But this is almost certain to fall into “the exception that proves the rule” category.

Lanny Breuer, former Covington & Burling partner and more recently head of the criminal division at the Department of Justice, resigned abruptly today.

Links 1/23/12

China Economic Paradigm Nearing End Game

GMO, in a compelling analysis, not only confirms the skeptics’ case but provides reasons why the Chinese growth model faces an end game. While it may not be nigh, it seems to be closer than most people think.

The Persistent Power of Finance, Um, JP Morgan

By C.P. Chandrasekhar, Professor of Economics, School of Social Sciences, Jawaharlal Nehru University, New Delhi. Cross posted from Triple Crisis

In a move that went contrary to what is expected of regulators, the Securities and Exchange Commission of the US approved in mid-December a controversial JP Morgan-created exchange-traded fund (ETF) backed by physical supplies of copper.

Bank of America Foreclosure Reviews: Whistleblowers Reveal Extensive Borrower Harm and Orchestrated Coverup (Part II)

In the executive summary to this series, we provided an overview of OCC/Federal Reserve foreclosure reviews which were abruptly settled at the beginning of January. Critics anticipated that the flawed design, of having supposedly “independent” review firms hired by the banks themselves, meant the reviews were highly unlikely to find much if any damage to homeowners. Leaks during the course of the reviews confirmed these concerns, revealing that the review process at many of the major servicers was chaotic and the reviews were designed and scored so as to make a finding of harm virtually impossible.

As bad as that sounds, the reality is even worse.

Bank of America Foreclosure Reviews: Whistleblowers Reveal Extensive Borrower Harm and Orchestrated Coverup (Part I – Executive Summary)

After extensive debriefing of Bank of America whistleblowers, we found overwhelming evidence that the bank engaged in certain abuses frequently, in some cases pervasively, in its servicing of delinquent mortgages. This is the first in a series of posts discussing our findings and providing support for these charges.

Links 1/22/13

After Obama Decided to Sell The Inaugural to Corporations, Did He Even Make His Sales Quota?

Not to bring anybody down from the post-inaugural pink cloud, but possibly not (or, alternatively, so). In fact, the whole picture of how the Inaugural got financed seems a little sketchy.

Why financial markets are inefficient

By Roger E. A. Farmer, Distinguished Professor and Chair of the Economics Department, UCLA. Originally published at VoxEU.

The efficient market hypothesis – in various forms – is at the heart of modern finance and macroeconomics. This column argues that market efficiency is extremely unlikely even without frictions or irrationality. Why? Because there are multiple equilibria, only one of which is Pareto efficient. For all other equilibria, the whims of market participants cause the welfare of the young to vary substantially in a way they would prefer to avoid, if given the choice. This invalidates the first welfare theorem and the idea of financial market efficiency. Central banks should thus dampen excessive market fluctuations.

Links 1/21/13

Philip Pilkington: The Degenerating Discourse of Mainstream Economics

By Philip Pilkington, a writer and research assistant at Kingston University in London. You can follow him on Twitter @pilkingtonphil

The blogoshpere includes quite a few mainstream academic economic blogs. Most of the “debate” on these blogs, together with that in the mainstream academic departments that they mirror, focuses issues of aggregation; issues that have become central to the research paradigm of mainstream economics, which has been falling to ever new lows since the 1970s Rational Expectations “Revolution”.

Links 1/20/13

Brief Remarks on Gun Culture in Celebration of Gun Deprecation Day

By lambert strether. Originally published at Corrente.

I don’t agree with Josh Marshall very often and I’d want to think a long time before buying into his title for this piece (“Speaking for My Tribe”). But as far as the feelings and the policy outcomes?

[L]et me introduce myself. I’m a non-gun person. And I think I’m speaking for a lot of people. …

It’s customary and very understandable that people often introduce themselves in the gun debate by saying, ‘Let me be clear: I’m a gun owner.’ …

Well, I want to be part of this debate too. I’m not a gun owner and, as I think as is the case for the more than half the people in the country who also aren’t gun owners, that means that for me guns are alien. And I have my own set of rights not to have gun culture run roughshod over me. …

That said….