Starting late last week, there’s been a marked shift in the mix of headlines in the major media outlets. While it may simply be post fall equinox moodiness or a confluence of downer reports leading to a rare moment of sobriety, suddenly the big venues are concerned about the economic outlook.
Read more...A New York Times profile of Ina Drew, the former head of the JP Morgan Chief Investment Office, almost certainly produced high fives in the bank’s corporate communications office. This piece is the best sort of PR you can get: it treats the trading losses as yesterday’s news, of interest only as point of entre into the downfall of a heretofore unknown but once hugely successful and personally appealing trading manager.
Read more...During the Microsoft antitrust case, some institutional investors were keen for Microsoft to lose, and not because they were short its stock. They felt that Microsoft being in both the operating systems business and the applications business had become a negative. They believed that separating the two businesses would not only produce higher multiples over time for each as “purer” plays, but having each new business more narrowly focused would be better for growth in the long term.
We have a similar discussion taking place regarding the big banks, and the pro-breakup case is even stronger there than for the software giant.
Read more...Just because the banks are on one side of an issue does not always mean they are wrong, just that they might be right for the wrong reason.
Read more...It looks like Eric Schneiderman is living up to his track record as an “all hat, no cattle” prosecutor. Readers may recall that he filed a lawsuit against the mortgage registry MERS just on the heels of Obama’s announcement that he was forming a mortgage fraud task force. The MERS filing was a useful balm for Schneiderman’s reputation, since it preserved his “tough guy” image, at least for the moment, and allowed his backers to contend that he had outplayed the Administration.
By contrast, we were skeptical of the suit, both in timing and in substance, and thought it had substantial hurdles to overcome. Indeed, despite invoking an impressive-sounding $2 billion in lost recording fees and other harm, the suit settled for a mere $25 million.
Schneiderman has churned out another lawsuit that the Obama boosters and those unfamiliar with this beat might mistakenly see as impressive.
Read more...Gretchen Morgenson has a good piece up today which again proves that no matter how bad you think the mortgage settlement is, it’s worse.
Read more...By Occupy the SEC. Cross posted from their website
Contrary to critics, who seem to think that the only way for Occupy Wall Street to have an impact is by taking to the streets, the movement continues to focus on developing novel ways to reduce the power of a deeply entrenched, abusive financial services industry. One way is by serving as a people’s lobbyist to shine light on the way critical aspects of financial services regulation are negotiated, usually out of sight of the public.
Read more...The mortgage settlement looks to be every bit as bad as cynics predicted. The most exacting and detailed reporting on the settlement terms came from attorney Abigail Field, who undertook the painful process of reading the entire agreement and making sense of what the detailed terms meant. And the latest word from the settlement monitor Joseph Smith is yet another confirmation of the settlement process as enforcement theater.
Read more...Aside from the rise of concerted trolling (which Barry Ritholtz discusses in a post today), it has been hard not to notice what amounts to an increase in collective pissiness among the NC commentariat. One might ascribe it to a multitude of influences: elevated stress produced by a lousy economy, the utter distastefulness of the Presidential campaign, the offhanded corruption among our ruling classes and their minions, the nagging worry that another big shoe might be about to drop (Iran? Europe?).
I’m not about to tell you all to take Soma. But there are a couple of forms of argument that are destructive to the community here, as well as being just plain fallacious.
Read more...In this speech,Robert Jenkins of the Bank of England blows apart the self-serving myths that ‘old guard’ bankers and their lobbyists have been peddling since the financial crisis ripped apart the global financial system in 2007.
Read more...By Delusional Economics, who is determined to cleanse the daily flow of vested interests propaganda to produce a balanced counterpoint. Cross posted from MacroBusiness.
As I talked about yesterday the outcomes of the failing policies enacted by European leaders in the face of the economic crisis boil down to a lose-lose struggle between international creditors and national citizens.
Read more...Sheila Bair’s new book Bull by the Horns is out and based on early reports, it looks like it skewers the bailouts in general and Tim Geithner in particular. But it also gets a lot into the weeds in what still needs to be fixed in bank-land, which is a part of these crisis post-mortems and retrospectives that too often get short shrift.
Read more...By Delusional Economics, who is determined to cleanse the daily flow of vested interests propaganda to produce a balanced counterpoint. Cross posted from MacroBusiness.
I genuinely thought the Europeans were getting somewhere in the last few weeks as I detected (or maybe that should be optimistically hoped) a change of rhetoric from some of the more hardened camps and a growing realisation that the current approach to “solving” the crisis is failing. My optimism was helped by the fact that the OMT, like the LTRO before it, has driven down sovereign yields which has given the European leaders yet another opportunity to sit down away from the fire fighting and discuss outcomes beyond a short term market window.
But alas, this is Europe and I appear to have been wrong.
Read more...It’s hard to tell whether the situation described in an article the New Haven Register is very unusual, or just under the radar by design. But either way, it does not pass the smell test.
Read more...We’ve written a lot about the scientism of mainstream economics, both here and in ECONNED, and how these trappings have let the discipline continue to have a special seat at the policy table despite ample evidence of its failure. As bad as this is, it pales in comparison to the overt corruption of science at work in the drug arena. Although this issue comes to light from time to time, often in the context of litigation, the lay public is largely ignorant of how systematic and pervasive the efforts are to undermine good research practice in order to foist more, expensive, and sometimes dangerous drugs onto patients.
Read more...