By Tom Adams, an attorney and former monoline executive When the financial crisis hit, I was in the direct line of fire. My company blew up very early in the crisis, giving me the dubious opportunity to see how bad things were going to get long before most of the rest of the world, including […]
Read more...The normally bank-friendly Fed fired an unexpected shot across the industry’s bow today, taking issue with its failure to take sufficiently tough measures to curb undue risk-taking. Per the Washington Post: The Federal Reserve has completed an initial review of compensation policies at 28 large banks it oversees and has been giving them confidential feedback […]
Read more...As we noted last week, Spain has forced the hand of other Eurozone bank regulators by declaring it will release the results of recent ECB stress tests, which earlier were to be published only on an aggregated basis, not bank by bank. There is still a good bit of confusion as to what happens next. […]
Read more...I’ve seen some eye-poppin’, credulity-stretchin’ accounts in my time. The report “The Budgetary Impact and Subsidy Costs of the Federal Reserve’s Actions During the Financial Crisis,” just released by the Congressional Budget Office, ranks with the most extreme. It claims that the budgetary cost (which corresponds roughly to expected losses) of the Fed rescue facilities […]
Read more...Brad DeLong points out that Ronald Reagan was far more concerned about unemployment than Team Obama (or Washington generally) is, and also took far more aggressive measures to combat it. From The Week (hat tip reader Marshall): By the start of 1983, labor unions were frantically giving back previously-promised wage increases and offering wage cuts […]
Read more...Reader Richard Smith provided a sighting of bank boosterism, courtesy The Economist: The happy secret of Western banking is that the system in aggregate now has lots of capital (see chart) relative to the net losses experienced over the crisis. The kind of erosion of capital forecast by the Federal Reserve’s stress tests last year, […]
Read more...Wow, the Obama Administration is less than a year and a half old, and it’s already twiddling with the record. I was gobsmacked to see this section in a post by Felix Salmon today, on a new book by Jonathan Alter and a New York Magazine cover story by John Heilemann: Both Alter and Heilemann […]
Read more...By Warren Mosler, a fund manager, co-founder and Distinguished Research Associate of The Center for Full Employment And Price Stability at the University of Missouri in Kansas City, and creator of the modern euro swap futures contract. Gillian Tett of the Financial Times wrote today about stress in the dollar funding markets, which she regards […]
Read more...Today provided yet another example of how the best government money can buy works. The Senate majority leader Harry Reid suffered an embarrassing defeat when his effort to pass a motion for cloture, which would have stopped debate on the financial reform bill, failed due to two Democrat and one Republican defection among the votes […]
Read more...Would you believe the chairman of a financial firm who told you that he was going to be able to pay off his loans to you when: 1. The company was showing a not-negative net worth ONLY because it had marked down its loans on its accounting statements by 7.5%, even when the loan agreement […]
Read more...By Yves Smith and Tom Adams, an attorney and former monoline executive The Fed and its friends and enablers in power, most recently Rahm Emanuel, are fighting tooth and nail to beat back the Audit the Fed amendments to pending financial reform legislation. That’s unfortunate and misguided. Even a cursory inspection of the Fed’s disclosures […]
Read more...Ryan Grim at Huffington Post has parsed recently released transcripts of 2004 Fed Open Market Committee discussions that show the debate over the rapid rise in housing prices and concerns about global imbalances were downplayed at Greenspan’s insistence. For instance, the minutes reveal that Fed governor from Atlanta, Jack Guynn, was worried about signs of […]
Read more...A Bloomberg story today on Neil Barofsky, the head of the Office of the Special Inspector General for the Troubled Asset Relief Program, or SIGTARP, contained this explosive little item (hat tip Tom F): The TARP watchdog has also criticized Treasury Secretary Timothy F. Geithner in reports and in congressional testimony for his handling of […]
Read more...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. The Fed believes that it has succeeded in making monetary policy significantly more transparent. Furthermore, the Fed believes that […]
Read more...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. Both fiscal and monetary policymakers have said that they will begin to unwind the stimulative policy stances when the […]
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