Category Archives: Regulations and regulators

Why the Justice Department Inspector General Report on Mortgage Fraud Matters

Hello, folks! As Yves is off explaining the world to Washington, I’m manning the controls for a couple days.

This allows me to ensure that NC has that whole Justice Department IG report on mortgage fraud covered. I know that Yves heaved the written equivalent of a sigh at the news, and she wasn’t wrong. Nothing tangible is likely to happen for the borrowers victimized by the abusive practices that DoJ willfully neglected to prosecute. And there’s surely a seat being kept warm at Covington & Burling for Eric Holder’s post-government career; this won’t hurt him a bit.

But because I don’t feel the coverage so far has plumbed the depths of this corruption, and because it’s still happening, it’s not worth going silent just yet. It’s probably spitting into the wind, yes, but I’ve got the time and the spit, so I want to note a few things.

Bill Black at TED Explains How Insiders Rob Banks and Cause Crises

A presentation by Bill Black disproves that TED only features elite-flattering conventional wisdom.

Trans-Pacific Partnership Reveals Deadly Cost of American Patents

How debates over the TPP overseas show how extortionate the US pharmaceuticals regime really is.

17 Million Reasons Rent Control is Efficient

Wealthy investors love to talk about the sanctity of contracts until little guys assert their rights. Then the idea that they might have to fork over a lot of dough to get the other side to give up its right is presented as an offense against nature.

Tax Havens Make US and Europe Look Poorer than They Are, Exaggerate Size of “Global Imbalances”

Peculiarly, despite the importance of tax havens, a pathbreaking paper published in 2013 by Gabriel Zucman of the Paris School of Economics, The Missing Wealth of Nations: Are Europe and the U.S. Net Debtors or Net Creditors? (hat tip Dikaios Logos) has received perilous little attention. Perhaps that’s because, among other things, it undercuts the Bernanke-flattering claim that “global imbalances” were a major driver of the financial crisis.

JP Morgan/Madoff Case Puts Spotlight on Use of Lawyers as Investigation-Blockers

Whenever a scandal of sufficient magnitude arises at a bank, it’s standard practice to hire an “independent” third party to conduct an investigation and give a report to senior management and the board. But now even bank friendly regulators are starting to suspect that banks are hiring attorneys do to this work, not to come clean, but to facilitate a cover-up.

Steve Keen: Godzilla Banks are Good for You?

Yves here. Although Keen’s use of the Godzilla metaphor is fun, the unvarnished facts he presents are plenty alarming. Bank of England Governor Mark Carney is actually gleeful at the prospect that England’s banking sector might grow to be as large relative to its economy as Iceland’s and Cyprus’ on the eve of their busts. But even worse, Carney’s enthusiasm for a banking sector that continues with its cancerous (or as Keen would have it, monstrous) growth gives license to bank lobbyists in the US and Europe to press for high rates of growth in their finance sectors so as to defend their national champions.

Yes, Virginia, Banking Contributes a Lot Less Value Than You are Led to Believe

One thing we’ve discussed repeatedly is that the activities of large banks, as presently constituted, are purely extractive. And to add insult to injury, GDP calculations exaggerate what in the way of value they arguably do add.

Private Equity Industry Floats Trial Balloon For “Get Out of Decades of Flagrant SEC Abuses for Free” Card

In late February, Bloomberg stated that the SEC is “considering” forgiving decades of private equity firms acting as unregistered broker-dealers and possibly legalizing the practice going forward. In case you think this is not a big deal, as we explain later in the post, the SEC is in fact vigilant about enforcing these regulations, so this would be an unprecedented waiver of liability. But richer-than-Croesus private equity firms are special, right?

Obama Administration May Open Up Atlantic to Seismic Testing

Yves here. Another entry in the “What could go wrong?” category.

We Sue CalPERS Over Denial of Our Private Equity Public Records Act Request

[Yves asked me to sticky this — lambert]

Although it’s probably sensible to expect a public agency to resist providing information in response to a Freedom of Information Act filing, the lengths to which CalPERS has gone to mislead and obfuscate in trying to thwart my efforts is quite remarkable, particularly since some of the moves CalPERS staff took are in violation of CalPERS’ own procedures.

Vermont Citizens Push to Form a State Bank, But Will Ratings Agencies Kill the Idea?

Martha R wrote to tell me that a serious effort is underway in Vermont to launch a state bank.

Quelle Surprise! Banks Are Opposed to More Liquid Markets When They Don’t Make Enough From Them

Bloomberg has an intriguing story about a bit of lobbying the big dealer banks are engaged in via a group called the Treasury Borrowing Advisory Committee, which represents 15 out of the total of 22 primary dealers (a primary dealer, among other things, gets to bid for its own account at Treasury bond auctions). Of course, the object of their efforts is to improve their profitability, here by putting parties they regard as competitors at more of a disadvantage.

Matt Stoller: “Free Trade” Pacts Were Always About Weakening Nation-States to Promote Rule by Multinationals

Yves here. I hope those of you who are in countries being browbeaten to sign the Trans-Pacific Partnership or the TransAtlantic Trade and Investment Partnership will circulate this post widely.