Yearly Archives: 2012

Cleaning Up the Mess: What to Do About Teetering Eurobanks?

Yves here. The Financial Times and New York Times tonight both have good overviews on the state of play in the effort to contain a slow-motion Spanish bank run. On the one hand, the Spanish government is in a position to tell the Eurocrats that it will consider only a bank bailout and not be required to take on further austerity measures. Given that retail sales have fallen nearly 10% year to year, it’s hard to see how anyone could expect more austerity to be a good idea.

Although markets reacted as if a deal was imminent, the FT makes it sound as if quite a few details need to be ironed out. And no wonder…

Michael Crimmins: What the Press Refuses to See in JP Morgan and MF Global Scandals

By Michael Crimmins, who has worked on risk management and Sarbanes Oxley compliance for major banks

Two former finance and political influence gods (Jon Corzine and Jamie Dimon) have tumbled back to earth. Yet, troublingly, the mythology that’s cowed the political establishment and the financial press for so long remains very much intact.

Michael Olenick: How Banks and Their Lawyers Win at the Expense of Investors and Homeowners

By Michael Olenick, creator of FindtheFraud, a crowd sourced foreclosure document review system (still in alpha). You can follow him on Twitter at @michael_olenick or read his blog, Seeing Through Data

The focus of news stories on mortgage abuses often focus on the immediate victims, the borrowers, but that’s far from a complete tally of the losers. And they also typically fail to look hard enough at the winners and the way they are able, again and again, to burn everyone but themselves.

Links 6/6/12

Neo-liberalism, De-capitalization/De-industrialization, and the Res Publica

By Tony Wikrent, who sells books (among them out-of-print manuals for equipment, including machine tools) at NB Books.

Lambert here. I’ve got a soft spot for theories of everything, and the thesis presented here, of neo-liberalism systematically de-industrializing/de-capitalizing America, and transforming it into an extractive economy (see under fracking, mountaintop removal, Keystone and Trailbreaker pipelines, etc.) with concomitant Second World-style political structures (elite impunity) has a lot of appeal for me.

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Bill Neil’s most recent exegesis, The Costs of “Creative Destruction”: Wendell Berry vs. Gene Sperling, provides a devastating critique of the economic thinking of Democratic Party elites, using Sperling’s speech before the National Press Club on March 27, 2012. Sperling is Chairman of President Obama’s Council of Economic advisors, and his speech was entitled “Renaissance of American Manufacturing.” Neil writes:

Quelle Surprise! Treasury Inspector Audit Report Whitewashes OCC Fail on Foreclosure Fraud

Yesterday, various news and financial sites picked up the release last Friday of a report by the Treasury’s Inspector General titled “SAFETY AND SOUNDNESS: OCC’s Supervision of National Bank’s Foreclosure Practices“. The media accounts are workman-like summaries with titles like “Bank oversight office failed to spot foreclosure fraud, Treasury inspector general says.”

The problem is that these various accounts are narrowly accurate (in that they summarize the report) but missed the real story.

The Real Bombshell in the MF Global Post Mortem

The report that John Giddens, the bankruptcy trustee in MF Global, released Monday is thorough and confirms many of the observations made in journalistic accounts of the firm’s collapse, particularly regarding inadequate risk and accounting controls, JP Morgan’s aggressive posture greatly increasing the liquidity squeeze. But a stunning revelation that comes early in the account and is central to the failure of the firm does not get the emphasis that it warrants.

Links 6/5/12

Manif de bonhommes

By lambert strether

Here is a super piece of artwork (original) from the Montreal red square “manifs” (manifestation, demonstration). I say “super” because I like funny and playful (and I also like strategies of civil resistance that lower barriers to entry so that “all walks of life” can participate, as they are so clearly doing here.) Be sure to use the scrollbar at the bottom to keep scrolling right, so you can see all the marchers in panorama!

Frick, Lassmann, Mikosch, Neuwirth, and Suellow: How do economists assess the european economic crisis? A survey

Andres Frick, Senior Researcher at KOF Swiss Economic Institute of ETH Zurich, Andrea Lassmann, PhD student and researcher at KOF Swiss Economic Institute, Heiner Mikosch, Postdoc Researcher at KOF Swiss Economic Institute, Stefan Neuwirth, PhD Student and Researcher at KOF Swiss Economic Institute, and Theo Suellow, Intern at KOF Swiss Economic Institute. Cross posted from VoxEU.

How do European economists assess the economic crisis in Europe? This column presents results of a survey of members of the Association of European Conjuncture Institutes on various issues related to the European economic crisis, such as the likelihood of Greece leaving the Eurozone, the likelihood of Europe falling back into recession, and the role of the European Central Bank.

Yanis Varoufakis: Why Europe Should Fear Fine Gael-like ‘Reasonableness’ Much, Much More Than it Fears Syriza

By Yanis Varoufakis, Professor of Economics at the University of Athens. Cross posted from his blog.

The establishment view in Europe is that the problem is too much debt (by profligate countries like Greece) and, therefore, that the solution must involve (a) austerity and (b) structural reforms (which increase the competitiveness of the weaker states). The problem, however, is that the establishment view is profoundly mistaken and, as a result, the proposed treatment poisons the patient. If this is so, Europe (and the world) have a lot more to fear from the ‘reasonableness’ of political parties like Fine Gael et al than from the ‘ultra-leftists’ of Syriza.

Links 6/4/12