It’s surprising and refreshing to see Bloomberg News, via an editorial, take on the way the economics profession has failed to clean up its act not simply in the wake of a massive intellectual failure but after the movie Inside Job highlighted some examples of corruption in the ranks of Famous Economists.
Read more...For those who are fond of depicting Occupy Wall Street as a bunch of hippies with no point of view, counterevidence comes in the letter submitted by the Occupy the SEC subcommittee for a joint subcommittee hearing tomorrow, January 18, of the House Financial Services Committee on the Volcker Rule. The title of the hearing broadcasts that financial professionals are ganging up against the provision: “Examining the Impact of the Volcker Rule on Markets, Businesses, Investors and Job Creation.” The supposed “business” representatives are firm defenders of the financial services uber alles orthodoxy, and there is a noteworthy absence of economists or independent commentators on the broader economic effects. The one non-regulator opponent to the effort to curb the Volcker Rule is Walter Turbeville of Americans for Financial Reform. However, they made the fatal mistake of accepting the banksters’ framing about financial markets liquidity and merely disputed the data submitted.
The letter is well documented and well argued. It goes directly after the financial services industry claim that implementation of a ban on proprietary trading will cause damage by hurting vaunted and mystical “liquidity.” An illustrative extract:
Read more...A revealing juxtaposition, and a belated MLK Day item:
Read more...By Matt Stoller, the former Senior Policy Advisor to Rep. Alan Grayson and a fellow at the Roosevelt Institute. You can reach him at stoller (at) gmail.com or follow him on Twitter at @matthewstoller. Cross posted from New Deal 2.0
The data — both anecdotal and otherwise — was out there, and the Fed even discussed it internally. Let’s not let it off the hook.
Read more...By Satyajit Das, derivatives expert and the author of Extreme Money: The Masters of the Universe and the Cult of Risk Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives – Revised Edition (2006 and 2010)
Over the next few months, the Euro-Zone faces a number of challenges including: the implementation of the new arrangements, possible further downgrading of a number of nations, refinancing maturing debt and meeting required economic targets. There will also be complex political and social pressures.
Implementation of the new fiscal compact may not be a fait accompli.
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The intense debate precipitated by a post on this site, “How Ron Paul Challenges Liberals,” and follow up posts by Glenn Greenwald and here serve to prove their simple yet frequently misrepresented thesis: that Ron Paul’s anti-war, anti-Fed positions expose fault lines among those traveling under the “liberal” banner.
Anyone who read comments on NC prior to this debate would have noticed some sympathy for Paul, ranging from the more common “he’s batshit and I’d never vote for him, but his opposition to our Middle East adventurism and the lack of accountability at the Fed is refreshing” to some making a stronger case for him. That shouldn’t be surprising given the point often made here and in the few lonely “progressive” outposts on the blogosphere (“progressive” is in the process of being co-opted in the same way “liberal” has been): that the Democratic party has been so deeply penetrated by the neoliberal/Robert Rubin/Hamilton Project types that it isn’t that different from the right on economic issues.
It should not be controversial to point out that the Democratic party uses identity politics as a cover for its policy of selling out the middle class to banks and big corporate interests, just on a slower and stealthier basis than the right. And we’ve seen the identity card used in a remarkably dishonest manner in this Ron Paul contretemps.
Read more...By Matt Stoller, the former Senior Policy Advisor to Rep. Alan Grayson and a fellow at the Roosevelt Institute. You can reach him at stoller (at) gmail.com or follow him on Twitter at @matthewstoller. Cross posted from New Deal 2.0
Records of the Fed’s meetings at the height of the housing bubble provide more evidence that our central bankers need to be held accountable.
Read more...At least when Penelope was resisting her suitors, it was clear what her objectives were. She was holding out on her belief that her husband Odysseus would return. And the suitors come off like real boors, so maybe she had also decided the single life was a better option than marrying any of them.
By contrast, it seems as if the Obama administration has completely lost the plot in what was formerly called the 50 state attorney general negotiations, and that appears to have fed directly into the news today of meetings of a breakaway group interested in concrete results.
Read more...I don’t know how many of you had been to lower Manhattan since the police cleared Zuccotti Park last fall, but it was about as open to the public as a demilitarized zone: barricades covering more than half the area, heavy police presence. It was so inhospitable that entering the park had the vibe of getting your name on an official Enemies of the State list, and apparently if you lingered at all, the police would shoo you away.
But we had thought the city’s efforts to change the rules for a privately owned but nevertheless public park were awfully heavy-handed, since these spaces were quid pro quos for zoning variances and are a long standing feature of New York. And the court agreed.
Read more...Yves here. As much as the image of Frau Merkel decked out as a domme is more than my tender sensibilities can take, the metaphor seems to apt for writers like Das to pass it by.
By Satyajit Das, derivatives expert and the author of Extreme Money: The Masters of the Universe and the Cult of Risk Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives – Revised Edition (2006 and 2010)
Financially futile, economically erroneous, politically puzzling and socially irresponsible, the December 2011 European summit was a failure. Only the attending leaders and their acolytes believe otherwise. German Chancellor Angela Merkel’s post-summit homilies about the “long run”, “running a marathon” and “more Europe” rang hollow.
Read more...By Michael Olenick, founder and CEO of Legalprise, and creator of FindtheFraud, a crowd sourced foreclosure document review system (still in alpha). You can follow him on Twitter at @michael_olenick
“Shadow inventory,” the number of homes that are either in foreclosure or are likely to end up in foreclosure, creates substantial but hidden pressure on housing prices and potential losses to banks and investors. This is a critical figure for policymakers and financial services industry executives, since if the number is manageable, that means waiting for the market to digest the overhang might not be such a terrible option. But if shadow inventory is large, housing prices have a good bit further to go before they hit bottom, which has dire consequences for communities, homeowners, and the broader economy.
Yet estimates of shadow inventory, and even the definition of what constitutes shadow inventory property, vary widely.
Read more...Although lots of technology-related sites are correctly up in arms about the Stop Online Piracy Act, the MSM has given it short shrift, and the financial blogosphere has not paid much attention (cross posts of some of George Washington articles being a welcome exception).
Read more...As hedge fund manager David Einhorn (known best for his public skepticism of Lehman’s accounting) apparently says regarding situations that don’t pass the smell test, “No matter how bad you think it is, it’s worse.”
Abigail Field’s post on how the Florida attorney general’s office befriends foreclosure fraudsters is an important, if nausea-inducing read. One of the striking sections that makes the extent of the corruption clear is a snippet toward the end. It show how the AG’s office acted to help Lender Processing Services do damage control, when it had LPS under investigation for foreclosure frauds.
Read more...Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Cross posted from http://neweconomicperspectives.blogspot.com/2011/12/did-ofheo-fix-fannie-and-freddies.html“>New Economic Perspectives.
The New York Times published a column by its leading financial experts, Gretchen Morgenson and Louise Story, on November 22, 2011 which contains a spectacular charge against the Obama administration’s financial regulatory leaders. I have waited for the rebuttal, but it is now clear that the administration does not contest the charge.
Read more...I don’t know how many times we’ve gone after the “TARP made a profit” bunk, but that topic requires an annoying amount of vigilance (the latest shill was Austan Gooslbee a mere week ago).
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