Category Archives: Banking industry

Michael Hudson: QE3 – Another Fed Giveaway to the Banks

In this Real News Network interview, Michael Hudson gives a high level discussion of why the Fed’s claim that QE3 will help employment needs to be taken with a fistful of salt.

FHFA to States that Uphold the Rule of Law: Drop Dead

If you had any doubt that the ongoing coup by bankers and their allies was proceeding apace, the latest story from Shahien Nasiripour of the Financial Times should settle all doubts.

Yes, Really, Truly, No Joke, That Schneiderman Mortgage Task Force is Gonna Get Someone….Soon!

I’m sure the banksters are quaking in their boots. Eric Schneiderman, the New York state attorney general whose joining a heretofore moribund mortgage fraud task force and withdrawing from opposition to the horrid mortgage settlement allowed the Administration to push the bank-friendy deal across the line, is now making noises that really, truly, he and his Federal best buddies are gonna nail some baddies really soon. From Reuters:

Mirabile Dictu! Bloomberg Finally Notices Deposit Flight, a Major Threat to the Eurozone

On the one hand, given that the Eurozone remains a major economic and financial flashpoint, it is good to see a major news service like Bloomberg provide a lengthy report on a continuing existential threat, that of deposit flight, or as we have described it, a slow motion bank run. But it’s a bit surprising it has taken them this long to take notice.

Mirable Dictu! Has Someone Noticed the IRS isn’t Enforcing Tax Laws in the Mortgage-Industrial Complex?

Reader Deontos highlighted a post on Reuters by two Brooklyn Law School professors, Bradley Borden and David Reiss, on a subject near and dear to our hearts, the abject failure of the IRS to take interest in widespread, probably pervasive, violations of REMIC, the part of the Federal tax code that governs mortgage securitizations.

The reason this matters is that this situation belies on of the Administration’s pet claims, that its hands were tied as far as addressing the foreclosure mess was concerned because it had no leverage over servicers. As we’ll discuss, in fact the Administration has a nuclear weapon in its hands that it is simply refusing to use.

Ian Fraser: UK Bank Regulator, FSA, Protects Powerful Cronies and Undermines Proper Bank Reform

By Ian Fraser, a financial journalist who blogs at his web site and at qfinance. His Twitter is @ian_fraser.

The UK’s failed regulator, the Financial Services Authority, is up to its old tricks again. Last week, it sought to scapegoat just one of the 16 directors who drove the awesomely badly managed British bank Halifax Bank of Scotland into the ground. And all he received was a £500,000 fine and a lifetime ban from working in the financial sector.

Michael Hudson on How Finance Capital Leads to Debt Servitude

This edited transcript is expanded from a live phone interview with Michael Hudson by Dimitris Yannopoulos for Athens News. It summarizes some of the major themes from Hudson’s new book, The Bubble and Beyond: Fictitious Capital, Debt Deflation and Global Crisis, which is available on Amazon.

Q: How has the financial system evolved into the form of economic servitude that you call “debt peonage” in your book, implying a negation of democracy as well as free-market capitalism as classically understood?

Is QE3 Yet Another Stealth Bank Bailout?

It’s difficult to puzzle out what Bernanke thinks he is accomplishing with QE3. The level of bond buying, as various commentators have pointed out, is much lower than in the earlier QE programs. And pulling out bigger guns in the past was not terribly productive. As we wrote in April 2011 in a post titled “Mirabile Dictu! Economists Agree All the Fed Has Done is Goose Financial Markets!“:

Eugene Linden: In a World of Underpriced Risk, What Could Possibly Go Wrong?

By Eugene Linden, a journalist and author of seven books who has written extensively about animal behavior, environmental issues, and markets

On a recent conference call, the strategist of a major international bank (it was an off-the-record call for clients only) laid out the bare bones of what he called the world’s “giant experiment” in debt and interest rates. Never before have so many countries maintained such low base rates for so long; never before in peacetime have so many countries had such huge deficits and debt burdens; never before in U.S. history had long term rates been so low; never before has the U.S. gone so many decades without deflation following inflation. Because we live in these unprecedented times, it’s easy to lose sight just our strange they are… and how dangerous.

Local DAs Allowing Debt Collectors to Use Their Letterhead, Split Fees from Shakedown

It’s one thing for the officialdom to sit back and allow financial services industry chicanery to go un or inadequately punished, quite another to get in bed with them to perpetrate a scam.

The Fed’s QE3: No Exit

The Fed’s launch of QE3 looks more than a tad desperate. If you believe the central premise of the Fed’s action, that propping up asset price gains would have enough effect on consumptions to lift the economy out of stall speed, it would seem logical to sit back a bit and let the recent stock market rally and the (supposed) housing market recovery do their trick. But the Fed has finally taken note of the worsening state of the job creation in an already lousy employment market and has decided it needed to Do Something More.

Quelle Surprise! Regulatory Measures to Reduce Systemic Risk Are Proving to Be Ineffective, Possibly Counterproductive

In an perverse case of synchronicity, one headline last night touted regulatory efforts to address systemic risk as another highlighted bank efforts to increase it. And the ongoing efforts of banks to expand risk creation is no accident.

Sheila Bair Visits Occupy Wall Street

Sheila Bair, the former FDIC chairman who heads the Systemic Risk Council, and Ricardo Delfina, a fellow Systemic Risk Council member, met on Sunday with members of several Occupy Wall Street working groups: Occupy Bank, Alternative Banking, and Occupy the SEC. I’ve watched presentations by Bair twice previously: once when she was at the FDIC, another not long after she had left government service. Even though she had been pretty direct in those discussions, she was surprisingly specific in this meeting about some of the impediments she faced during the crisis. Some of the topics:

Markets Applaud Draghi’s New, Improved Kick the Can Down the Road Strategy

On Thursday, ECB chief Mario Draghi announced a bond-buying program that had been largely leaked the day prior, namely that of a new bond buying program, the Outright Monetary Transactions, or OMT. Bond yields in Italy and Spain had already come down on the rumor, and stock markets around the world rallied on the news.

The enthusiasm appears overdone when you look at the sketchy details.

The Banks Are Bluffing – They Aren’t Moving Anywhere

Yves here. This is a subject near and dear to my heart. Banks occasionally harrumph that if regulators are too mean, they’ll just pack up and go somewhere else. That’s complete bluster as far as TBTF banks are concerned. Any major bank needs to be backstopped by a real central bank. The Caymans don’t begin to cut it. And central banks are actually not all that welcoming of world scale players trying to take advantage of the slack they give to banks they’ve been in bed with a long time. UBS considered splitting in two and relocating its investment banking operations when the Swiss National Bank announced it would impost 20% equity requirements. It has concluded it has to stay put.

Andrew Norton debunks another sort of threat made by large banks: that they will move significant activities out of particular financial centers like London.