Yearly Archives: 2013
Regulatory Looting, Promontory-Style: Botched Foreclosure Reviews Alone Generate More than Double Goldman’s Revenues per Employee
t’s really hard to convey a sense of how utterly grotesque the looting that Promontory Financial Group conducted on the misnamed Independent Foreclosure Reviews.
Read more...Corruption, EuroStyle: ECB Chief Draghi Fudged Italy’s Books to Secure Eurozone Entry, Italy Stuck With Derivative Losses
As readers of the financial press may recall, there was a kerfluffle over the fact that Greece had used a currency trades designed by Goldman in 2001 to mask the level of its indebtedness and secure Eurozone entry. A much bigger and more costly shoe of the same type has dropped in Italy and it directly implicates the current ECB chief, Mario Draghi.
Read more...Nathan Tankus: Krugman von Hayek
Mainstream economic discussions employ a false dichotomy. At one “extreme” you have Austrian economists who believe the current Federal Reserve policy is (or should be) causing inflation, malinvestment, and all sorts of other maladies. They think the nominal interest rate set by the Fed is too low and should be raised . At the other “extreme” you have Paul Krugman and “New Keynesian” company, who argue that the nominal interest rate set by the Fed is too high and should be lowered in some way. To the causal observer who is unfamiliar with the history of economic thought, these two positions seem diametrically opposed. They, in fact, are not.
Read more...Hong Kong to US on #Snowden: A4 Paper, Please. And Do Remember to Spellcheck!
By MsExpat, a journalist and essayist who lives in New York and Hong Kong, and Fellow of The Mighty Corrente Building. Originally published at Corrente.
Anyone who has ever had any dealings with Hong Kong’s scrupulous bureaucracy can’t help but chuckle at today’s South China Morning Post article detailing the problems that Hong Kong’s government had with the United States’ request to detain Edward Snowden. Since the SCMP is behind a paywall here are the juicy parts:
Read more...Links 6/25/13
Mortgage Rate Shock Likely to Dent the Housing Market
As regular readers know, your humble blogger, along with a lot of investors, was taken by surprise when the typically dovish Bernanke not only started using the taper word a month ago, but then made the demise of Fed heroics sound even more imminent by talking about higher unemployment “thresholds,” namely 7%, than had been voiced previously. And the reading of Fedwatchers like Tim Duy and (even before the FOMC statement) James Aitken is that the central bank wants out of the QE business sooner rather than later.
The impact on mortgage rates already looks very likely to throw a big bowl of cold water on the housing party.
Read more...Danny Schechter: Mandela and Snowden – Two Heroes With More In Common Than We Know
Clearly the stories of Nelson Mandela and Edward Snowden are very different, but there are some parallels that almost no one in the media is willing to acknowledge.
Read more...Lee Adler: The Big Four Central Banks Muddy The Same Sea Of Liquidity, And Then There’s China
The world’s major central banks are now working at cross purposes, creating massive crosscurrents that are making life extremely difficult for investors. This isn’t likely to end soon. In fact, conditions should get worse.
Read more...Gensler Staring Down Administration and Banks on Derivatives Reform
Yves here. Readers may recall that Gary Gensler, the head of the Commodities Futures Trading Commission, is being pushed out by Obama. His planned replacement is so appallingly lightweight (oh, and formerly in a very junior role at Goldman) as to assure that all she’ll be able to do is take dictation from financial firm lobbyists.
But Gensler may be having a last laugh before he leaves office.
Read more...Links 6/24/13
The BIS Loses Its Mind, Advocates Kicking Citizens and the Bond Markets Even Harder
If anyone doubted that Ben Benanke’s “we’re convinced the economy is getting better, so take your lumps” press conference after the FOMC statement last week was awfully reminiscent of 1937, the newly-released Bank of International Settlements annual report is tantamount to a kick to the groin. And to change metaphors, if the Fed’s sudden hawkish posture is playing Russian roulette with the real economy, the BIS just voted loudly for putting a couple more bullets in the cylinder.
Read more...Administration Keeps Pretending Mortgage Servicing Has Been Fixed, Whistleblowers Say Otherwise
It sometimes feels like a Sisyphean task to keep discussing how Americans were thrown under the bus in the various mortgage settlements reached in 2011 and 2012. Needless to say, whistleblowers continue to come forward and describe widespread abuse even though the officialdom would have you believe otherwise.
Read more...Quo Vadis, Edward Snowden?
On the one hand, I’ve vastly amused by the consternation of various US spokescritters at the fact that Edward Snowden has slipped out of Hong Kong and is apparently en route to Ecuador. What good is being a superpower if you can’t stomp world-headline-creating embarrassments like a bug?
Read more...Monday DataDive: Fedspook, May Reports on Consumer Prices, New Home Construction, and Existing Home Sales
By RJS, a rural swamp denizen from Northeast Ohio, and a long-time commenter at Naked Capitalism. Originally published at MarketWatch 666.
Lambert here: rjs does what he does every weekend: Covers the most important economic releases from the previous week. Thanks, readers, for your feedback on formatting from last week; I hope you see some improvements. Don’t hesitate to make more suggestions. Also, the FRED geekery is fun.
Fedspook
The financial news of the week came as a result of the two day meeting of the Fed’s Open Market Committee, which really produced no news on its own. The statement barely changed from the statement issued after the last meeting, and Bernanke’s responses to questions at his press conference after the meeting (pdf transcript) were pretty much a reiteration of his statements in testimony before the Joint Economic Committee of Congress roughly 4 weeks earlier, i.e, that the economy was improving and they would soon be starting to taper off the from the $85 billion a month they’ve been injecting into the financial system, mostly by buying mortgage backed securities and reinvesting the interest proceeds of the Treasury bonds and MBS that they already hold on their balance sheet. However, market players must have not believed the first iterations, because as soon as the statement was released and Bernanke began to confirm what he’s already said previously, financial markets started heading south, and by the time the planet had spun once on its axis, prices in every market around the world & for most every asset class were down by 2% or more.
Read more...