Category Archives: Regulations and regulators

Nathan Tankus: Centralized Planning in the United States

By Nathan Tankus, a student and research assistant at the University of Ottawa. You can follow him on Twitter at @NathanTankus

Discussions of centralized planning in the West often take it for granted that the Soviet Union and similar social systems are the only ones with centralized planning. This is a basic (albeit ideological) confusion that results from the belief that markets and centralized planning are incompatible. This is not the case

Did the Euro Kill Governance in the Periphery?

Yves here. We’re a little EU-centric tonight as a result of a wealth of particularly good material, which is often a sign that stresses are rising (there was tons of good material in the runup to the crisis as well).

By Jesús Fernández-Villaverde, Professor of Economics, University of Pennsylvania and Luis Garicano, Research Fellow with the Productivity and Innovation Programme, Centre for Economic Performance; Professor of Economics and Strategy, Departments of Management and of Economics. Cross posted from VoxEU

By the end of the 1990s, under the incentive of Eurozone entry, most peripheral European countries were busy undertaking structural reforms and putting their fiscal houses in order. This column argues that the arrival of the euro, and the subsequent interest-rate convergence, loosened a tide of cheap money that reversed the incentives for further reforms. As a result, by the end of the euro’s first decade, the institutions and governance in the Eurozone periphery were in worse shape than they were at the start of the decade.

Lynn Parramore: When Your Boss Steals Your Wages – The Invisible Epidemic That’s Sweeping America

Imagine you’ve just landed a job with a big-time retailer. Your task is to load and unload boxes from trucks and containers. It’s back-breaking work. You toil 12 to 16 hours a day, often without a lunch break. Sweat drenches your clothes in the 90-degree heat, but you keep going: your kids need their dinner. One day, your supervisor tells you that instead of being paid an hourly wage, you will now get paid for the number of containers you load or unload. This will be great for you, your supervisor says: More money! But you open your next paycheck to find it shrunken to the point that you are no longer even making minimum wage. You complain to your supervisor, who promptly sends you home without pay for the day. If you pipe up again, you’ll be looking for another job.

Mary Jo White About to Get Off to a Bad Start

Your humble blogger was surprised when Obama nominated Mary Jo White to head the SEC, since her reputation as a tough prosecutor is at odds with Obama’s well established pattern of catering to banks (the fact that he gives them only 97% of what they want is nevertheless offensive enough to their tender sensibilities). I surmised that there had to be an angle here…

Bundesbank Looks to Undermine Italy

By Delusional Economics, who is determined to cleanse the daily flow of vested interests propaganda to produce a balanced counterpoint. Cross posted from http://www.macrobusiness.com.au/2013/02/europe-waits-for-italy/“>MacroBusiness.

Another chapter in the Italy political story comes to a close as a government is formed, for how long who knows, but a familiar figure appears to be playing puppet master…

OCC Misses Another Conflict of Interest: Foreclosure Review Outreach/Payment Processor Rust Consulting Owned By Residential Real Estate Player Apollo, Being Sold to VC Arm of Citigroup

It appears that the Office of the Comptroller of the Currency and the Fed dropped the ball yet again on vetting firms involved in the Orwellianly-named Independent Foreclosure Review (IFR) for conflicts of interest. Michael Olenick’s expose on Allonhill, one of the “independent consultants” hired by Wells Fargo, led to Allonhill’s role being curtailed considerably.

But there’s no way to curtail the role of Rust Consulting, a firm that has been central in the Independent Foreclosure Reviews virtually from their onset. And as we’ll see, Rust has ample conflicts of interest when it was engaged to handle mailings and outreach under the IFR, and is about to become even more conflicted.

Wolf Richter: Luxembourg Is Not The Next Cyprus, Not Yet, But….

Yves here. This article if anything underplays how much a one-trick pony Luxembourg is and what a fix it is in if Germany and/or the EU continues its campaign against tax avoidance and evasion. Luxembourg hope to come to an understanding with the Eurozone and slowly reach accommodations, which would still shrink its banks, but in a less brutal manner than Cyprus. But with such a large financial sector, any action is still going to cause a fair number of customers to flee. It’s hard to see how any gradual path can be found, which then raises the question of whether a series of bank failures in Luxembourg would have broader ramifications.

John Galt Kills Texans in Massive Fertilizer Plant Explosion

Yves here. Coverage of the horrific fertilizer plant explosion has taken a back seat to reporting of the Boston Marathon bombings. Yet more people died in the Texas tragedy, which was also preventable.

Bank “Zombie Title” Rises, Hurting Communities and Borrowers, as OCC and Fed Sit Pat

We’ve written before about the perverse phenomenon known as “zombie title.” Kate Berry of American Banker provides an update.

Congress Scheming to Avoid Eating its Own Cooking on Obamacare

You cannot make this stuff up.

Mirabile Dictu! Someone (Bankruptcy Trustee Freeh) Finally Sues Jon Corzine Over MF Global

The great unwashed public might get to enjoy a bit of theater.

More Foreclosure Review Fiasco: Paying Agent Rust Consulting Sends Letters to Different Addresses Than on Borrower Letters, Refuses to Make Corrections

Hedge fund manager and famed short seller David Einhorn is right: no matter how bad you think it is, it’s worse.

Independent Foreclosure Review Fiasco: OCC and Fed Decided Not to Find Harm

The last few days have had more and more ugly revelations emerge about the botched OCC and Fed Independent Foreclosure Review settlement, with some particularly important ones coming out of the hearings in Robert Menendez’s Senate Banking subcommittee today.

Vice Chairman of Chinese Accounting Association Warns Chinese Local Debt Could Create Bigger Crisis than US Housing Implosion

On the one hand, Bloomberg today tells us retail demand for stocks is as hot as ever. On the other, we have someone well-placed in China telling the world that its local debt is a train wreck waiting to happen, a classic Minksy Ponzi unit, but the timing of the unraveling is uncertain.