Yearly Archives: 2012

NC Crowdsourcing: Will the Euro Survive?

All eyes in finance are on Greece…

Links 6/16/12

Walkback on Basel III Confirms Bank Victory on Regulation

The Wall Street Journal reports that a key element of Basel III rules, its provisions on liquidity buffers, are about to be watered down.

Links 6/15/12

Another Schneiderman Con: Proposes Likely-to-go-Nowhere Foreclosure Fraud Legislation

Having sold out the possibility of getting a decent settlement for homeowners for a seat in Michelle Obama’s box at the State of the Union address and a star turn on a Potemkin mortgage fraud task force, Schneiderman appears to be an adept student of the Obama strategy of preferring empty gestures to substance, since they generate good PR and take a lot less effort.

Satyajit Das: The Euro-Zone Debt Crisis – It’s Now ABOUT Germany NOT UP TO Germany!

Yves here. Das’ post has a lot of useful information, but like a lot of finance people, he is hostage to a conventional markets-driven reading of the issues. Governments are not households or businesses. When the private sector delevers, unless a country is running a big surplus (as Germany is) you can’t have government delever at the same time. So Germany’s notion of virtue (that governments and private citizens should wear an austerity hair shirt) works only for Germany.

There are also ways to prevent an Euro train wreck that don’t involve using German’s balance sheet, such as having the ECB issue bonds, or do revenue sharing (say on a per capita basis, as Marshall Auerback suggested in a NC post). Or the ESM could be given a banking licence via the ECB so that it has the ability to deploy unlimited capital to sort out the solvency issue (as France has suggested). Yanis Varoufakis’ “Modest Proposal” is another approach. But if Germany continues to oppose having the ECB take a much more aggressive stance, Das’ concerns are germane.

Peer-to-Peer Lending: Will Aggressive Operators Screw Up a Promising Idea?

Never underestimate the potential of bankers to ruin a good idea by trying to wring too much profit out of it. Subprime lending, mortgage securitizations, microfinance all were products that had merit and were beneficial until industry incumbents pushed for growth and cut corners and/or tried to extend the market well beyond sensible limits.

Peer-to-peer lending may prove to be yet another victim of this propensity.

Wolf Richter: Manna for Bankrupt Cyprus

In Greece’s chaotic wake bobs the listing Republic of Cyprus, soon to be the fifth Eurozone country, out of seventeen, to get a bailout. By June 30. Only last year’s €2.5 billion loan from Russia has kept it afloat. It’s economy is shrinking, unemployment is at a record, and real estate is collapsing after a phenomenal bubble and a nationwide title-deed scandal that has taken down the banks. But Cyprus has something—and it’s huge—that no other troubled Eurozone country has.

Trip Report: Netroots Nation (part II)

By lambert strether

Part I of this post considered Being, Doing, and Writing. In each section, the theme of Agency was important, but in two senses: 1. The power to act on behalf of a principal, and 2. The power to act, as such. In Doing, especially, we see many agent/principal issues, if we view citizens as the principals (“We the people do ordain and establish”), and elected officials, union leaders, political operatives, etc., as their agents. (Or not. See at “pitch.”) But Writing, or at least blogging, is for me agency in sense two: The power to write in one’s own voice, and to find a public. Finally, Being shows the interplay between the two senses: Trade shows, because of travel, the buzz, the foraging, and the caffeine, always seem to reinforce one’s power to act; but one attends a trade show on behalf of a principal. More centrally, the alienation I felt came from the sense that many around me must have given trust and loyalty to principals whose actions and policies are inimical to me; yet I was present as an independent agent with the capacity to reflect on my experience. (As before, I’ll paraphrase and patch all the panel discussions from my notes.)

The Crisis Shifts to Italy

By Delusional Economics, who is horrified at the state of economic commentary in Australia and is determined to cleanse the daily flow of vested interests propaganda to produce a balanced counterpoint. Cross posted from MacroBusiness.

As we head towards Greece’s weekend election, rumoured to be celebrated by the locals by moving ever larger sums of money elsewhere, the Eurozone appears to be seriously straining under the constant pressure of its ongoing crisis.

Links 6/14/12

Marshall Auerback: Germany’s Constitutional Conundrum

By Marshall Auerback, a hedge fund manager and portfolio strategist. Cross posted from New Economic Perspectives

Hans-Werner Sinn, president of Germany’s Ifo Institute and the director of the Center for Economic Studies at the University of Munich, has taken to the pages of the NY Times to explain why Berlin is balking on a further bailout for Europe. Amongst the points that Sinn makes against German sharing in the debt of the euro zone’s southern nations is a legal one:

Obama Plans to Put Foreign Companies Above the Law

Zach Carter has a must-read new article up at Huffington Post on leaked documents from trade negotiations that have been posted at the website Public Citizen. You should read his entire article, pronto, but here is the money quote: