Category Archives: Banking industry

“Financial Reform, or, Rearranging Chairs on the Titanic”

By L. Randall Wray is a professor of economics and research director of the Center for Full Employment and Price Stability at the University of Missouri–Kansas City and writes for New Deal 2.0 Congress is nearing completion of its financial reform bill HR 4173 (Wall Street Reform and Consumer Protection Act of 2009), which appears […]

Effort to Reform Finance Instead Turning into a Coup by Banksters

I am not sure whether Potemkin reform is worse than no reform at all, except the latter makes it abundantly clear that America is in the hands of a corrupt plutocratic elite. The latest, from the Huffington Post, is that the normal flurry of last minute amendments to gut legislation has gone one step further, […]

“Highlights from the Bernanke Testimony”

By Richard Alford, a former economist at the New York Fed. Since then, he has worked in the financial industry as a trading floor economist and strategist on both the sell side and the buy side. It has been almost a week since the Bernanke testimony and since the dust has settled, two exchanges stand […]

Volcker: Little Evidence Financial Innovation Has Helped Economy

Tall Paul is my hero. I would go further than he did in a speech in Sussex. The case can made that financial innovation of the OTC derivatives variety, which has mushroomed from 1992 onward, has been at best a wealth transfer device from the real economy to the financial economy, and has probably exacted […]

Meredith Whitney: The government is “out of bullets”

By Edward Harrison of Credit Writedowns I am not sure I buy Meredith Whitney’s assertion that the government is “out of bullets” in its quest to prop up the economy. It’s a matter of political will more than anything else. Nevertheless, I do agree with her basic premise in the CNBC video below that the […]

No Need for New TARP: Fed Land Grab in Miller Amendment

We’ve commented repeatedly and disapproving of the increasing operation of the Fed as an off balance sheet vehicle of the Treasury, in violation of normal budgetary processes (as have some former central bankers, most notably Willem Buiter). Even thought Congress has been attempting to beat back the expansion of the Fed’s authority that Team Obama […]

Guest Post: Woman Who Invented Credit Default Swaps is One of the Key Architects of Carbon Derivatives, Which Would Be at the Very CENTER of Cap and Trade

As I have previously shown, speculative derivatives (especially credit default swaps or “CDS”) are a primary cause of the economic crisis. They were largely responsible for bringing down Bear Stearns, AIG (and see this), WaMu and other mammoth corporations. According to top experts, risky derivatives were not only largely responsible for bringing down the American […]

Newsweek: Goldman Supplied 9 Pages of Proposed Changes to Derivatives Legislation

Newsweek’s “Why is Barney Frank So Effing Mad?” is supposedly about the Congressman from Fidelity but is really about how the banksters are succeeding in neutering financial reform. One Congressional staffer has told me that everyone involved recognizes the measures don’t go far enough, but feel they can’t do much more (Congress can step out […]

BIS Warns Low Rates Lead to Excessive Risk Taking

The Bank of International Settlements is taking a more public stand on a matter it took up with central bankers privately prior to the crisis, namely, that overly low interest rates stoke asset bubbles. Its chief economist William White had been warning against overly lax monetary policy as early as 2003: White recognized the brewing […]

“Values and Rules”

By Satyajit Das, a risk consultant and author of Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives Wall Street Revalued: Imperfect Markets and Inept Central Bankers by Andrew Smithers (2009) The Road to Financial Reformation: Warnings, Consequences, Reforms by Henry Kaufman (2009) In a sense, this crisis is about values […]

Every Dog Has Its Day, Even Citigroup

Reader Steve sent this tidbit from the Australian. Sovereign wealth funds not all that long ago were generally seen as sophisticated to at least competent. But so were university endowments, and in many cases, “sophisticated” turned out to be tantamount to “has a higher appetite for risk than most” which in a bull market can […]

Bank failures in Georgia crushing small business and home owners

This article originally appeared at Credit Writedowns. Note: Since this post was published, three more banks in Georgia have failed. Read details here. Recently, I have been writing a lot about regional banks and the capital problems they have been having. This is having a direct impact on lending capacity available to small and medium […]