China Credit Worries Rise as Large Shadow Banking Default Looms
China faces the first big test of its shadow banking system, in the form of a pending default. How is it likely to fare?
Read more...Category Archives: Regulations and regulators
How Bitcoin Plays Into the Hands of Central Bankers and Will Facilitate the Use of Negative Interest Rates
Bitcoin enthusiasts like to present it as a “power to the people” form of money, stressing its apparent lack of ownership (the “Napster for finance“). They stress the lack of need for a “trusted party” like a bank or broker to verify that a payment has been made. And many clearly relish the idea of launching a currency outside the control of central banks (plus this beats Cryptonomicon in geekery).
If you believe the hype, you’ve been had.
Read more...Michael Olenick: “Conversation with the Receptionists” – An Obamacare Skit
Minimum Wages: The Effects on Employment and Labour-Force Turnover
Minimum-wage increases are associated with a lower probability that a job will end, and with a lower probability that an unemployed person will find work.
Read more...Claire’s Stores: Private Equity Broker-Dealer Violations in Action
In an earlier post, we discussed the ongoing violation of SEC broker-dealer regulations by private equity firms when they collect “transaction fees” for buying and selling companies on behalf of the funds they manage. The 1934 Exchange Act mandates that only SEC-registered broker-dealers may collect transaction-based compensation (subject only to limited exceptions which are not […]
Read more...Obamacare Enrollments Show Low Uptake by Uninsured, Hoisting Insurers on Their Own Petard
One of the few saving graces is that the health insurers’ scheme to enrich themselves known as Obamacare may be going pear-shaped from the standpoint of their profits.
Read more...Debunking the Idea that “Structural Reforms” Reduce Unemployment
Both the IMF and the ECB call for “structural reforms” which are code for further weakening labor protection as beneficial to “competitiveness” and job creation. Does this claim stand up to scrutiny?
Read more...Wikileaks on the Trans-Pacific Partnership Environment Chapter: “Toothless Public Relations Exercise”
Wikileaks has thrown yet another wrench in the negotiations over the sellout-to-multinationals-masquerading-as-trade-deal otherwise called the Trans-Pacific Partnership.
Read more...On Elizabeth Warren’s Bill Against Using Credit Scores in Employment Screening
Since I give Elizabeth Warren a hard time when she pulls her punches, I am remiss in not giving a thumb’s up to her proposed Equal Employment for All Act, which would bar the use of credit reports in most hiring decisions.
Read more...Why is the CDC Trying to Block an Accurate Lyme Disease Test?
Yves here. While this article may seem a bit far afield for this website, it illustrates how political considerations influence science and medicine, two fields we have been indoctrinated to view as relatively free of corporate and ideological influences.
Read more...Are Fracking Fluids to Blame for Rail Car Explosions?
Over the past year or so there seems to have been far more train derailments of cars carrying crude oil that have resulted in huge, deadly explosions, and it is not a coincidence that the oil in these explosions originated from the Bakken shale formation in North Dakota.
Read more...Are Banks About to Win on Commodities Trading After Their Success in Watering Down Basel III Capital Rules?
You know it’s bad when Bloomberg’s editors attack the banks’ win against regulators, in this case, their success in watering down already-too-generous Basel III capital requirements. And they look primed to score a twofer on pending rulemaking on trading in physical commodities.
Read more...Banks May Have Scored Hollow Victory on Volcker Rule/TRuPS CDO Compromise
Readers may recall that banks, in their eagerness to depict the final Volcker rule as a terrible miscarriage of justice, made a great deal of noise about the case of Zions Bank, which was blaming $378 million of prospective losses on the Volcker-rule requirement that banks sell these dubious instruments called TruPS CDOs by July 21, 2015. The regulators clarified the relevant rules, which looks like a concession. But how much of a concession is it?
Read more...In Echo of Runup to Crisis, Bond Investors Reaching for Yield
An article in the Financial Times by Tracy Alloway gives yet another sighting that bond investors are getting a bit frantic in their hunt for yield. The piece has the eyepopping title, Yield-hungry investors snap up US homeless bond. It uses recent deals in the CMBS (commercial mortgage backed securities) market as a proxy for bond investors’ QE-driven hunt for more return.
Read more...Target, Neiman Marcus Credit Card Hacking Reveals Third-World US Payment Systems
Occasionally, we’ve commented on the shoddy state of US credit card payment infrastructure. One of the noteworthy aspects of the fiasco of recent US retailer security breaches is that the media has more or less ignored the question of what could have been done to forestall these incidents, which in the case of Target involved as many as 70 million customers, and Neiman Marcus, under (but presumably not much under) 1 million.
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