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. Jointly posted with New Economic Perspectives
MSNBC persists in running a pro-austerity line by falsely presenting Paul Krugman as a isolated opponent of economic malpractice.
Read more...We have seen it for several years: foreclosure sales have become the hunting grounds for investors with two goals: hanging on to these homes until the Fed’s flood of money drives up their value, and renting them out. Thousands of smaller investors have piled into the game. And so have the giants. But now the second half of the equation is collapsing.
Read more...It would be ironic if Cyprus, one the smallest countries in Europe with little over 1 million people and about 0.5% of the European Union (“EU”) economically, were to prove a key inflexion point in the crisis.
Read more...It may seem churlish to hector the New York Times for turning its attention to the sorry financial prospects of the young. But this sort of attention would be more useful if it shed more light, rather than wistfully evoking standards from the old normal.
Read more...By Edward Kane, Professor of Finance at Boston College and founding member of the hadow Financial Regulatory Committee
“We are a moving company not a storage company”
…Apocryphal Bear Stearns executive
Regulators define a financial institution’s capital as the difference between the value of its asset and liability positions. The idea that capital requirements can serve as a stabilization tool is based on the presumption that, other things equal, the strength of an institution’s hold on economic solvency can be proxied by the size of its capital position. That in turn assumes you can rely on those figures.
Read more...The cheery view that Europe had moves past its crisis now looks to have been a tad premature.
Read more...Yves here. Our post today on Cyprus provides some broad background, including the political dynamics and the not-terribly-defensible reasons the Eurozone went that route, and a short discussion of the large risk that this inept move precipitates a wider crisis. This article by Charles Wyplosz serves as a companion, since it discusses the “tax,” um, expropriation option versus other alternatives. Even more important, it sketches out why this scheme, even if it manages not to kick off a crisis, is still inadequate to rescue Cyprus. It is thus a toxic variant of the Eurozone “kick the can down the road” strategy.
Read more...Michael Shedlock (hat tip furzy mouse) described a new gimmick for those who want to skirt international law: live in a fancy ship, 12 miles offshore from San Francisco, with all the tech amenities. He summarizes the pitch:
Read more...Ed Harrison here. I haven’t been on NC in a while now but Yves asked me to cross-post this one because the issue is important. Let me note here that Tyler Cowen asks some troubling questions on this. And Ed Conway raises some good issues as well. I recommend reading those posts too. Below is […]
Read more...The Guardian has released a documentary on American operative in Iraq, James Steele, which appeared on BBC. From the related news story in the Guardian:
Read more...The Pentagon sent a US veteran of the “dirty wars” in Central America to oversee sectarian police commando units in Iraq that set up secret detention and torture centres to get information from insurgents. These units conducted some of the worst acts of torture during the US occupation and accelerated the country’s descent into full-scale civil war.
Yves here. The Congressional Budget Office is widely depicted in the media as “nonpartisan” and therefore above reproach. It’s time to treat that view as outdated. Like the Fed, the CBO continues to profess its independence but is in fact an aggressive promoter of neoliberal policies. We discussed at some length how Fed economists savaged its health care cost model, which is the driver of budget hysteria.
Jeff Madrick describes even more problems with CBO forecasts, and how they have become so significant that the public needs a shadow CBO to challenge the often-flawed official projections.
Read more...Yves here. I wasn’t planning on liveblogging this hearing, but listing to the introductory remarks, the knives are really out for JPM. In all the post-crisis hearings I’ve watched, I’ve never seen such unanimity between the Democrats and the Republicans on the severity of the problem and the need for more regulation.
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