Category Archives: Regulations and regulators

Negotiations with Greece Close to Breakdown as Budget Strains Worsen

Things are not looking good for Greece.

The SEC’s Andrew Bowden: A Regulator for Sale?

The SEC has retreated on its tough talk about widespread misconduct in private equity. A panel at Stanford Law School reveals a possible cause. Andrew Bowden, the head of the exam unit, reveals himself to be deeply, embarrassingly captured.

John Helmer: IMF Makes Ukraine War-Fighting Loan, Allows US to Fund Military Operations Against Russia, May Repay Gazprom Bill

For the first time, an IMF loan is funding a country at war, and one that is an impossible basket case economically. It’s hard not to conclude that the IMF largesse served to solve the wee problem of getting Congress to approve funding for US adventurism in Ukraine.

The Fed Impedes GAO Audits by Destroying Source Documents

Robert Auerbach, an economist to the Committee on Banking and Financial Services during the Arthur Burns, Paul Volcker, and Alan Greenspan chairmanships at the Fed, as well as being a Fed economist and now a professor at the University of Texas (Austin) has a bombshell revelation in his recent book Deception and Abuse at the […]

Did Ireland’s 12.5 Percent Corporate Tax Rate Create the Celtic Tiger?

Offshore banking and tax haven expert Nicholas Shaxson has launched a new blog, Fools’ Gold, to look at issues of ‘competitiveness’ and so-called ‘competition’ between nations. We’ve often taken issue with that policy goal, since it gives precedence to crushing labor as a way of lowering product prices to stoke exports. This approach is dubious for anything other than small economies, since all countries cannot be net exporters. Undue focus on exports as a driver of growth results in increasing international friction, such as the currency wars that are underway now. Moreover, as we have discussed separately, trade liberalization has gone hand in hand with liberalization of capital flows, in no small measure due to US efforts to make the world safe for what were then US investment banks. Yet Carmen Reinhardt and Ken Rogoff pointed out in their study of financial crises, higher levels of international capital flows are associated with more frequent and severe financial crises.

In addition, lowering wage rates reduces domestic demand. In countries like the US, where the domestic economy is much larger than the export sector, lowering internal demand to stoke exports is misguided.

Here we look at a first case study, the real reasons behind the growth and meltdown of the famed Celtic tiger, Ireland.

Fracking Industry Conspiring To Cover Up Oklahoma Earthquake Evidence?

It’s one thing to suspect that evidence that fracking causes earthquakes is being suppressed. It’s quite another to be able to name the parties behind the cover up.

Corporate Greed is Killing Investment

How the dubious “maximize shareholder value” thesis, an economic theory, and not a legal requirement, hurts investment and undermines growth.

Mapley Fights Back: How the Scammers Behind Virgin Gold Mining Corporation Bit Off More Than They Could Chew (VIII)

It’s high time I updated the APGMI part of the saga of Virgin Gold Mining Corporation. Here’s a round-up of the relevant parts of this sprawling series.

HSBC’s Money Laundering Nightmare (1): Mossack Fonseca

HSBC’s top brass have “no idea” about Mossack Fonseca. Here’s a primer.

In Rebuke to Cronyistic New York Fed, TBTF Bank Supervision Shifted to Fed Board of Governors

The Wall Street Journal has published an important account of a behind-the-scenes power struggle at the Federal Reserve over authority for regulation. The result that the New York Fed has had significant amounts of its authority shifted to the Board of Governors in Washington, DC. This is a major win for Fed governor Dan Tarullo, who has emerged as one of the toughest critics of big financial firms at the Fed in the wake of the crisis. It is also a loss for the banks, since the New York Fed is widely recognized as close to Wall Street. Moreover, the Board of Governors is more accountable to citizens (its governors are Federal employees, the Board of Governors is subject to FOIA, although confidential supervisory of all financial regulators is exempt), while the regional Feds can best be thought of as public/private partnerships with weak governance structures,* so this move in theory is also a gain in terms of accountability to the public. However, since Greenspan holdover, deregulation enthusiast and Dodd Frank opponent Scott Alvarez remains as the general counsel of the Board of Governors, it’s unlikely that any newfound serious intent by the Board of Governors will go all that far in practice, given the powerful role that Alvarez exerts over matters regulatory.

Do Greece, the Troika, and the Eurogroup Actually Have a Deal?

Ambrose Evans-Pritchard has a new article on Greece’s scramble to find the funds to meet it March IMF payments, which are €1.5b in total, with €300 due on Friday. Note that IMF payment dates aren’t as hard and fast as credit card due dates; the agency allows borrowers some leeway if they have a clear intent to pay.

Nevertheless, Evans-Pritchard’s most important observation may be the one at the close of his article:

Whatever piece of paper they signed in Brussels 10 days ago, the two sides are still talking past each other.

In other words, the two sides disagree profoundly as to what the memo means. And that may mean that in reality, there is no deal at all.

Greek Kolotumbas Increasing at Disconcerting Rate

I’m at risk of getting whiplash from watching the speed at which Greece is changing its position on key issues. And while I’d be delighted to be proven wrong, there are reasons to think this pattern does not bode well for the government’s ongoing negotiations.

The Administration’s Dishonest Response to Elizabeth Warren’s Attack on Secret Investor Arbitration Panels in Trade Deals

Elizabeth Warren is clearly getting on the Administration’s nerves.