Category Archives: Banking industry

Minimum Wage Households That Get Pay Increases Typically Increase Their Borrowing Even More

The debate around Obama’s proposed minimum wage increase (when he had promised to deliver an even bigger wage rise in his first term) focuses mainly around how much economic stimulus it will provide and whether it will simply lead employers to cut worker hours (given how obscene corporate profits are, most companies have plenty of room to pay their employees more, even if their kvetching would lead you to believe otherwise. Remember, companies used to share the benefits of productivity gains with workers; it was in the later 1990s they started keeping the upside all for themselves). But a look at that question reveals what low wage workers do when they get pay increases.

Is the Eurozone Nearing a Make or Break Point?

One of the dangers of trying to understand what is going on in the Eurozone if you are a hapless but interested American isn’t simply that you’d have to be fluent in a lot of languages to keep on top of the media, but the media themselves are, as NC readers know well, not exactly reliable. Look at how much dictation from business and political leaders masquerades as news in the US. And we have a less controlled press than, say, Italy does.

So I will give readers some fresh data points and let you duke it out.

Student Loan Bubble So Big It’s Trumping Credit Cards as a Spending Driver

It turns out Lambert’s mother-in-law research is pretty good.

Congressmen Criticizing OCC Mortgage Settlement, While More Misrepresentations and Coverups Emerge

The Wall Street Journal today stresses that a lot of Democratic congressmen are unhappy about the botched settlement process but are unlikely to do more than beef because the new Comptroller of the Currency, Tom Curry, was selected by Obama.

But the more people poke at the settlement, the more creepy crawlies emerge.

Dave Dayen: Servicers Committed Loan Error Rates of Either 4.2% or 97.2%, Take Your Pick

By David Dayen, a lapsed blogger, now a freelance writer based in Los Angeles, CA. Follow him on Twitter @ddayen

Anyone paying a smattering of attention justifiably raised a skeptical eyebrow at the Office of the Comptroller of the Currency’s assurances to Congress that the Independent Foreclosure Reviews revealed hardly any borrower harm from servicer malfeasance. One has to marvel at this wondrous finding, particularly since just about no one who has gotten close to the records who was not paid for by banks has come up harm estimates remotely this low. Which raises another question: did the OCC lie (or more charitably, artfully fudge numbers) to Congress?

OCC Offers Lame Defense of Failure of Litigate as More Proof Emerges of its Abject Failure to Supervise Foreclosure Reviews

Elizabeth Warren’s opening salvo in the Senate Banking Committee, when she asked assembled top officers from various banking regulators when they had last litigated a case against a financial firm, drew blank stares (the SEC, which regularly files civil suits, was able to muster an answer).

Thomas Curry, the Comptroller of the Currency, addressed Warren’s question in a speech on Tuesday. However, his response was partly regulatory bromides, partly artful misdirection, and on the whole, provided more proof that regulators lack the will to regulate.

The Credit Report You Never Knew You Had, And How It Can Victimize You

Natalie Martin has a post up at Credit Slips about an paper by Ginger Chouinard on a form of credit reporting that has managed to remain beneath the policy radar despite its considerable importance, and how it can do even more harm that the sort we’ve all come to know and hate.

Occupy the SEC, Frustrated With Regulatory Defiance of Volcker Rule Implementation Requirements, Sues Fed, SEC, CFTC, FDIC and Treasury

Occupy the SEC has filed suit in the Eastern District of New York over the failure of the relevant financial regulators to issue a Final Rulemaking as stipulated in Dodd Frank.

Germans and Eurocrats Throw Hissy Fits Over Italian Elections

It’s unlikely that the destabilizing of the political calculus in Europe resulting from impressive showing of anti-austerity candidates in Italy will end prettily or nicely. However, Europe had already put itself in the position of having only bad choices. So the question is who suffers, and the public in periphery countries are starting to rebel against being broken on the rack while Eurocrats and pampered German and French bankers feel no pain.

Thirty Years of Financial Inefficiency

Arjun Jayadev at Triple Crisis provides a quote from Thomas Phillipon that somehow never sees the light of day in the financial press:

…the unit cost of intermediation is higher today than it was a century ago, and it has increased over the past 30 years. One interpretation is that improvements in information technology may have been cancelled out by increases in other financial activities whose social value is difficult to assess.

Quelle Surprise! Having No Idea What Really Happened in Foreclosure Reviews, OCC Parrots “Independent” Consultant Howlers

I was prepared to give the benefit of the doubt to incoming Comptroller of the Currency Thomas Curry. But it’s really hard to do that now.

Richard Wolff Discusses the Failure of Capitalism with Bill Moyers

The fact of this talk is telling in and of itself: that a mainstream commentator would devote an entire segment to the idea that capitalism isn’t working. While that idea may seem obvious to many NC readers, it was supposed to remain relegated to the sphere of deviance (see Daniel Hallin’s spheres of discourse for more detail).