Category Archives: Politics

Quelle Surprise! It’s Better to Run a Private Equity Fund than Invest in One

It’s perverse that it takes a Mitt Romney presidential bid to shed some long-overdue harsh light on the private equity industry.

It was not as hard as you might think to do well in the private equity business in the 1990s. Rising equity markets lift all boats, and PE is levered equity. A better test of the ability to deliver value is how they did in more difficult times.

The Financial Times reports on a wee study it commissioned to look into who reaped the fruits of private equity performance. Its findings:

Paul Krugman Makes Housing Call He Will Likely Come to Regret

I’m behind on commenting on various opinion pieces, thanks to a mild case of food poisoning (ugh), but I wanted to take note of Paul Krugman’s current New York Times op ed, “Is Our Economy Healing?”

As an aside, Krugman has written a lot of good pieces lately that we’ve linked to on income inequality the disastrous austerian policies in Europe, and Republican derangement and duplicity. But he tends to cut the administration far more slack than it deserves.

His current piece voices cautious optimism on the prospects for the economy based on some strengthening in various economic indicators. But astonishingly, the core of his argument rests on the outlook for the housing market:

Thanks NC Readers! Tom Miller Says No Mortgage Deal Imminent

Readers no doubt saw both on this site and elsewhere that the Obama Administration was cranking the heat up on the mortgage settlements talks, and was apparently planning to go ahead with the Federal regulators inking a pact, on the assumption they’d get enough state attorneys general to provide at least a modest fig leaf. The assumption also seemed to be that the Administration could enlist Congressmen to pressure some of the current and rumored dissident Democrat AGs to fold and join the Obama camp.

That effort appears to have gotten such a large repudiation today, when the settlement terms were presented in Chicago to Democratic AGs and discussed over the phone with the Republican AGs that Tom Miller who is leading the attorney general negotiations has done a major climbdown:

Obama to Use Pension Funds of Ordinary Americans to Pay for Bank Mortgage “Settlement”

Obama’s latest housing market chicanery should come as no surprise. As we discuss below, he will use the State of the Union address to announce a mortgage “settlement” by Federal regulators, and at least some state attorneys general. It’s yet another gambit designed to generate a campaign talking point while making the underlying problem worse.

The president seems to labor under the misapprehension that crimes by members of the elite must be swept under the rug because prosecuting them would destablize the system. What he misses is that we are well past the point where coverups will work, and they may even blow up before the November elections. If nothing else, his settlement pact has a non-trivial Constitutional problem which the Republicans, if they are smart, will use to undermine the deal and discredit the Administration.

Greece Lines Up Portugal

By Delusional Economics, who is horrified at the state of economic commentary in Australia and is determined to cleanse the daily flow of vested interests propaganda to produce a balanced counterpoint. Cross posted from MacroBusiness.

Another weekend…. and we are still waiting for an outcome on Greece. The chief negotiators from Institute of International Finance (IIF) have left the country yet we still haven’t heard anything that sounds remotely like a deal. FT reports that the brinkmanship hasn’t ended but there doesn’t appear to be too much wiggle room left:

Call Your Attorney General Today to Oppose Big Obama Push to Get Mortgage Settlement Deal Done

We put up a few more stories on the mortgage mess tonight for a reason. It isn’t that we had a sudden explosion of new information on mortgage abuses. It is instead to remind readers that we could turn this blog entirely over to covering mortgage chicanery and not even scratch the surface.

And the latest bit of corrupt behavior is that the Obama administration has a full court press on to push the heinous “multi-state” settlement deal over the line.

Bending the Rule of Law to Help the Banks: Effort to Draft a National Foreclosure Statute Underway

There is a slow moving but nevertheless troubling effort underway to change foreclosure laws across the US. The Uniform Law Commission, the same body that created the Uniform Commercial Code, a model set of laws that sought to harmonize commercial laws in all 50 states, has had two full day public but not well publicized meeting of a “study group” on mortgage foreclosure. Note that it took over a decade to draft the first version of the UCC and a protracted period for it to be implemented by states (most states have adopted the updated version of the UCC, although certain articles of the new version have not been implemented in any states).

Given its august history, one would think the ULC would be above political influences. That would appear to be a naive assumption these days.

Is the “It Takes Forever to Foreclose” Meme a Big Bank Flattering Exaggeration?

A story that has increasingly become a fixture in the mainstream media is “It takes X [surprisingly large seeming number] days to foreclose.” The implications of X being a really big sounding number is of course that it is taken to mean that Deadbeats Are Living Rent Free For An Ungodly Amount of Time. This in turn incenses the respectable sorts that are offended at the idea that irresponsible neighbors are getting a break to which they are not entitled.

The premise behind this reaction is wrong.

Guest Post: Democrats Are the Ones Pushing Web Censorship

While the chief baddy on SOPA – Lamar Smith – is a Republican, it is really the DEMS who are the ones still trying to censor the web.

Zombie Europe

By Delusional Economics, who is horrified at the state of economic commentary in Australia and is determined to cleanse the daily flow of vested interests propaganda to produce a balanced counterpoint. Cross posted from MacroBusiness.

One of the major themes that I have been discussing in Europe for a long period of time is the simple failure of logic in which the European periphery is being instructed to push deflationary policy onto their economies, yet at the same time expected to meet their existing, and growing, debt obligations. In the most extreme case this has led to what you now see in Greece, but I don’t think Portugal or Spain are far behind. This failing policy is leading to the ‘zombification’ of nations, in which they can’t grow out off their debts yet aren’t being allowed to fail on them either. Kept alive by an ever-growing lifeline of foreign aid when the real solution is to let the beast die and re-build from the ashes. I think if we compare Iceland to Ireland we are beginning to get a clear picture of the benefits of writing off the debts and starting anew.

As I have also spoken about over the last month or so, what is happening in the real economies of Europe is being replicated in the banking system.

So Why Has the IMF Asked for $500 Billion That it Probably Won’t Get?

An odd development today was that Christine Lagarde, the head of the IMF, put forward the idea of having members pony up $500 billion for rescue loans, since the agency said it foresees demand of $1 trillion over the next two years and it has only $387 billion uncommitted. It goes without saying that the most of the anticipated need is in Europe.

There are two puzzling aspects of this story

Obama to Try Better Smoke and Mirrors to Address Housing Market Woes

If I had Onion-level parody skills, I’d treat the latest story in The Hill on Team Obama’s latest housing headfake masquerading as an initiative by riffing on one of its planned new program. Call it HUMP, Homeowners Upward Mobility Program. In true Ministry of Truth style, mortgage borrowers facing foreclosure would be moved, discreetly, into tent cities that would do Potemkin proud, with names like “Country Club Lane” and “Lake Shore Drive” and painted facades in front of their tents and shanties. Local merchants would praise the new subdivision and the inhabitants would say how nice it was to now be living in a McMansion, even if it was only really a couple of inches deep.

But instead you get my normal shtick.

Greece Poised to Default

By Delusional Economics, who is horrified at the state of economic commentary in Australia and is determined to cleanse the daily flow of vested interests propaganda to produce a balanced counterpoint. Cross posted from MacroBusiness.

Another melee won by the ECB overnight with the LTRO once again pushing sub 3 year sovereign auctions into a “happy place”.