Category Archives: Banking industry

Wall Street Hiring More Ex-Government Prostitutes Officials to Assure it Gets its Way

The infamous James Carville quote, “Drag a hundred-dollar bill through a trailer park, you never know what you’ll find,” seems more applicable to official Washington than the much-maligned Paula Jones.

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Quelle Surprise! Banks Whining About Cost of Breaking New California Homeowner Bill of Rights

During the protracted negotiations over what was to become the 49 state/Federal mortgage settlement, New York attorney general Eric Schneiderman was hailed as a progressive leader and California’s Kamala Harris was characterized as an opportunist.

Turns out the opportunist cut a much better deal for her constituents than the supposed true believer.

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Congressional Influence as a Determinant of Subprime Lending

A relatively unforeseen implosion in housing markets figured prominently in the 2007 meltdown in capital markets and the subsequent downturn in the global economy. This column presents new research on the political geography of subprime lending. Congressional leaders – as well as other recipients of campaign contributions – may have benefited from gains to trade in the direction, pricing, and sizing of subprime mortgage loans.

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Obama’s Patronage System: Pritzker Nomination for Commerce Department, Limp-Wristed Dodd Frank

The consternation at the not-exactly-a-surprise nomination of billionaire Penny Pritzker to be Commerce Secretary, is sadly much less than is warranted. That suggests that the Forbes 400 member will survive her confirmation hearings. And in a telling bit of synchronicity, last week some fauxgressives set about amplifying an article in the Nation that big bank lobbying efforts were the reason Dodd Frank was amounting to very little. As we’ll discuss, both reflect how much Obama supports the interests of the FIRE sector (finance, insurance, and real estate).

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Lynn Parramore: How a Much-Heralded Bank Reform Proposal Could Actually Blow Up the American Economy

Yves here. I had really wanted to write this piece, but Lynn Parramore beat me to the punch. There’s been almost universal enthusiasm for Brown-Vitter, legislation proposed by Sherrod Brown and David Vitter to get tough with the too-big-to-fail banks. The legislation is sufficiently stringently written that if it were enacted (big if), it would force the banks to make changes to maintain anything remotely resembling their previous profit margins. Goldman and Morgan Stanley would probably drop their banking licenses and the other US systemically dangerous banks would presumably downsize by hiving off major operations.

So what’s not to like? The problem is that the enthusiasts haven’t looked behind the curtain. This bill is being pushed, hard, by big insurers, who would be major winners.

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