Mirabile Dictu! Bank of America Found Guilty of Fraud for “Hustle” Mortgage Lending Program
Don’t get too excited.
Read more...Author Archives: Yves Smith
Links 10/23/13
Ken Rogoff Loses It, Calls Criticism of Errors in Debt Paper a “Witch Hunt”
Ken Rogoff has just shown how out of touch he is with reality and basic standards of professional accountability, as demonstrated in an interview published in the Frankfuerter Allgemeine, which is best thought of as a center-right New York Times. He’s come as close as Serious People do to foaming at the mouth, accusing those who criticized the discovery of errors in a widely cited austerity-supporting paper he wrote with Carmen Reinhart as being on a “witch hunt” and engaging in an “orchestrated attack…as in the 1950s under McCarthy.”
Read more...Us Versus Them
By Gerald Minack, a former global equity strategist for Morgan Stanley. Cross posted from MacroBusiness
Rising political polarisation in the US has gone hand-in-hand with rising income inequality, falling top-end tax rates, lower taxes on business, rising leverage and higher asset prices. These trends may be coincidental, but they seem to reinforce each other.
Read more...Links 10/22/13
The Ridiculous “Jamie Dimon as Victim” Meme on the Pending JP Morgan Mortgage Settlement
Nothing like having a credulous, leak-dependent media to carry your messages.
Read more...The Rise of an American Debtcropper System for the Young
Readers have often been using the term “neofeudalism” to describe the outlines of the new economic order, in which the uber wealthy and a thin cadre of their advisors, managers, and other elite professionals do well, with a network of less lofty managers helping oversee and orchestrate the provision of services to the broad base of the public, and they struggle to eke out a meager existence.
Debt appears to be the “one ring that rules them all” of this emerging order.
Read more...French Officialdom Now Discussing Eurozone Exit
Just because a taboo has been broken does not necessarily mean that more radical action is in the offing. But the flip side is that, while we’ve been busy following debt ceiling and budget hijinx in the US, there are some surprising developments on the other side of the pond. One is that, as anti-Euro candidate Marine Le Pen is leading in polls in France, respected members of its ruling bureaucracy are deeming the Euro as a failed experiment and presenting detailed plans as to how an breakup could be executed.
Mind you, the Eurozone has been limping from crisis to crisis for so long that it’s hard to take new signs of trouble seriously.
Read more...The Fed’s Exit Problem: Symptom of Paradigm Breakdown?
Yves here. This Real News Network interview with Yilmaz Akyüz, chief economist at the South Centre and former director and chief economist at UNCTAD, focuses on the conundrum of the Fed’s need to exit from QE from an international perspective, and layers in the further complication that China is not going to keep up its investment spending at the same level. Akyüz argues that “….we have problems at the end of the crisis which are as big as the ones during the crisis, and these problems are largely due to mismanagement of the crisis, particularly in the U.S. and Europe.”
But I’m not sure it’s as simple as mismanagement.
Read more...Why the “Maximizing Shareholder Value” Theory of Corporate Governance is Bogus
One mantra you see regularly in the business and popular press goes something along the lines of “the CEO and board have a fiduciary duty to maximize shareholder value.”
That is untrue. Moreover, the widespread acceptance of that false notion has done considerable harm.
Read more...The European Crisis: Lessons from the 1920s, the Gold Standard, and Historical Trilemmas
Yves here. This post by Michael Bordo and Howard James finds significant parallels between the 1920s and the economic and policy conflicts facing the Eurozone, which does not speak well for them being resolved tidily.
Read more...So How Big a Deal is the Pending “$13 Billion” JP Morgan Settlement?
One of the big news stories of the weekend is that JP Morgan and the Department of Justice, brokering a settlement of liability across multiple Federal agencies, have reached a tentative $13 billion settlement on the bank’s mortgage-related conduct in the run-up to the crisis. But the size is not necessarily a metric of accomplishment.
Read more...Links 10/19/13
Ilargi: Winter In America Gets Colder – Why We Choose Poverty
We continue to live with the idea of recovery, which in our minds equals a return to what we had, plus added growth. For some of us that may come true, but for a very rapidly increasing number amongst us, it will not. Because, and it’s high time we acknowledge this, at this point in time, the only way the upper echelons of our societies can achieve some level of growth is to take it away from everyone else. And those upper echelons, mind you, demand exponential growth, which means, in a society that cannot grow, that the numbers of poor people will rise exponentially as well.
In reality, we are of course already seeing a huge redistribution of wealth today, only this one increases inequality instead of decreasing it. Which means all those dreams about equal access for everyone to the best health care and education available are long gone. If we would only redistribute wealth in such a way that it would see us return to the level of inequality that existed when those dreams were relevant, 60-odd years ago, much of our poverty conundrum would be solved. It is really as simple as that.
Read more...Our New Piece at Aljazeera: “The shutdown is over, but the austerity fight continues”
I hope Naked Capitalism readers will check out our new article at Aljazeera, The shutdown is over, but the austerity fight continues.
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