Yearly Archives: 2012

Links 4/27/12

Frontline’s Astonishing Whitewash of the Crisis

Several of my savviest readers wrote expressing disappointment and consternation with the Frontline series on the crisis, “Money, Power, and Wall Street.” The first two parts of the four part series have been released, and it’s probably safe to say that this program is far enough along to be beyond redemption.

Morgan Sandquist: Finance in Denial

By Morgan Sandquist, a member of the Occupy Wall Street Alternative Banking Group. Cross posted from mathbabe

The largest banks in America–Citibank, Bank of America, Wells Fargo, and others–are probably insolvent.

Will the Fiscal Cliff Eat the Recovery, Such as It Is?

Lately, the US has been winning the investment beauty contest among Cinderella’s ugly sisters. Europe’s addiction to austerity, rolling rescues, and inability to address internal imbalances means at best a wild ride and at worst a crisis resurgence. China still has its perennial fans, but long-standing bears like Jim Chanos have been joined more recently by Marc Faber, who foresees 3% growth, which is tantamount to a recession. Japan is struggling with a mile high currency. The US, by comparison, does not look too bad.

Or does it? One of the lurking worries in the background is the so-called fiscal cliff.

Pavlina Tcherneva: No, Mr. Krugman, Bernanke’s Conundrum is Completely Different

By Pavlina Tcherneva, Assistant Professor of Economics at Franklin and Marshall College, Research Scholar at The Levy Economics Institute, and Senior Research Associate at the Center for Full Employment and Price Stability. Cross posted from New Economic Perspectives

Our mainstream colleagues keep banging their heads against the wall. “Why, oh why wouldn’t Chairman Bernanke do more to rescue the economy?” Today Paul Krugman took on this question again, arguing that Chairman Bernanke should listen to Professor Bernanke who had far more sensible ideas about rescuing an economy from a deflationary environment, as seen in his research on Japan during the 90s.

Krugman revisits a 2000 paper by then professor Bernanke, which many of us have scrutinized before, titled “Japanese Monetary Policy: A Case of Self-Induced Paralysis?” Krugman faults Bernanke for not following his own advice…..

The difference is that, unlike Paul Krugman, I actually read Bernanke’s paper from start to finish.

Links 4/26/12

The ECB is on Mars

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 http://www.macrobusiness.com.au/2012/04/spain-has-only-denial/“>MacroBusiness.

Overnight the president of the European Central Bank, Mario Draghi, gave a speech to the Hearing at the Committee on Economic and Monetary Affairs of the European Parliament. The speech was not particularly out of line with what Mr Draghi usually says…

Bill Black: Mankiw Hearts “Governmental Competition” That Made Romney Rich

Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Cross posted from New Economic Perspectives.

This is the second part of my discussion of N. Gregory Mankiw’s column asserting that governmental competition is desirable for the same reason that private competition is. Mankiw was Chairman of President Bush’s Council of Economic Advisors from 2003-2005. He was one of the principal architects of the perverse incentive structures that proved so criminogenic and drove the ongoing financial crisis. He gave no useful warnings of the necessity for containing the developing crisis – even after the FBI’s September 2004 warning that mortgage fraud was become “epidemic” and would cause a financial “crisis” if it were not contained. He is now Mitt Romney’s principal economic advisor. His column favors the “competition” argument that led him to support crippling financial regulation even as private sector competition led to endemic fraud.

Mankiw is a moral failure as well as a failed economist.

George Washington: Tarp Overseer Debunks Bailout Myths: Big Companies HAVEN’T Repaid Tarp Funds … And Funds to Help Homeowners HAVEN’T Been Disbursed

Debunking Bailout Myths

Interview, MERS RICO complaint: Doug Welborn, State District Court Clerk vs. MERSCORP Shareholders and Trustees (“the banksters”)

By lambert strether of Corrente.

UPDATE For those of you who like to listen to NC on your commute (say) there is a podcast of the interview at the bottom of the full post.

Yes, I know that Doug Welborn, East Baton Rouge Parish Clerk of Court vs. MERSCORP Shareholders and Trustees (“the banksters”) is a bit unwieldy as a case name, but it’s a lot less wieldy than the actual name — [32 parish clerks in Louisiana, so far] vs. [16 big banks including TBTF poster weasels BAC, JPM, and WFC (but not GS)] — so I think I’ll just go with “Welborn” from here on in.

The triple damages claim under civil (sigh) RICO is a billion dollars or so for Louisiana alone — real money — which makes Welborn interesting. Even more interesting is that RICO, as a “theory of the case,” is simple, clean, and easy to explain, unlike so many of our criminal banksters’ fraudulent schemes. We caught up with the trial lawyer for Welborn, Ted Lyon, and interviewed him. Did I mention the claim is for a billion?

Links 4/25/12

Fed Paper on Repo Exposes Inadequacy of Financial Reforms

I’m late to write on a terrific and largely unnoticed paper presented at the Federal Reserve Board’s research conference on “Central Banking: Before, During and After the Crisis” in late March (hat tip Michael C). “A Proposal for the Resolution of Systemically Important Assets and Liabilities: The Case of the Repo Market” by Viral V. Acharya and T. Sabri Öncu could be more accurately titled, “What Financial Reform Missed.”

Daniel Alpert: Earth to Paul Krugman

By Daniel Alpert, the founding Managing Partner of Westwood Capital. Cross posted from EconoMonitor

This past Sunday, Paul Krugman penned a screed in the New York Times Magazine (entitled, somewhat unflatteringly in my opinion, “Earth to Ben Bernanke”) that expanded on the content of an ongoing debate in the economics blogosphere over the contents of the mind of Federal Reserve Board Chairman Ben Bernanke.

Professor Krugman has posited for months now that Bernanke has come up short…..