By Neil Barofsky, the former special inspector-general of the troubled asset relief programme and is currently a senior fellow at NYU School of Law. He is the author of ‘Bailout’. Cross posted from the Financial Times with permission
Now that Tim Geithner has resigned as US Treasury secretary, it is time to survey the damage wrought from four years of his approach to the financial crisis.
Read more...Yves here. Remind me never to get on Bill Black’s bad side.
Read more...By 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.
It’s early, but Salon has published on January 30, 2013 either the funniest or saddest column of the year to date: “Are Banks Too Big To Prosecute?”
Read more...A pair of idiots testing the patience of the Parliamentary Commission on Banking Standards
Read more...When I took the introductory fine arts course in college (which actually was a tough course), one of the ideas that stuck with me was devolution.
Read more...Reviewing the press coverage of the HBOS fraud charges, and asking some questions.
Read more...By Cathy O’Neil, a data scientist. Cross posted from mathbabe
I just finished reading Nate Silver’s newish book, The Signal and the Noise: Why so many predictions fail – but some don’t. I have major problems with this book and what it claims to explain. In fact, I’m angry.
Read more...One element of the coming budget pact that is not getting the attention it warrants is a covert effort to gut military benefits by privatizing them.
Read more...Yves here. One of the things that has too often gone missing in the many discussions of why massive scale money launderer HSBC was not prosecuted is the basis of the “doing that would be destabilizing” excuse. When a company is indicted (mind you, indicted, not convicted), pretty much all Federal and many (most?) state agencies are required to stop doing business with it, immediately. The effect of the loss of so much business, particularly for a large financial firm, is seen as a death knell.
Of course, that’s the point.
Read more...By Abigail Field, a lawyer and writer. Cross posted from Reality Check
Showalter pushes the ‘it’s not the mod terms, it’s the bad borrower’ idea with far more than just a “Living Large” headline. He invents two couples, pitched as archetypes of good and evil, probably hoping to copy the policy-killing success of Harry and Louise. But this invocation of the irresponsible borrower myth is particularly egregious–both borrowers are trying to be responsible in the face of insolvency.
Read more...ow that student loans are undeniably in bubble territory, the officialdom is starting to wake up and take notice.
Read more...The New York Fed’s William Dudley gave a surprisingly candid, meaning not positive, assessment of the state of the Too Big to Fail problem in a speech yesterday at the Clearing House’s Second Annual Business Meeting and Conference. From the text of his speech (hat tip Richard Smith):
Read more...Greg Smith’s book on his time at Goldman has generated a hailstorm of criticism, aptly summed up by Jesse:
Read more...But the absolute trashing and personal attacks on Greg Smith in the past week that were orchestrated by Goldman and supported, heavily, by the US financial networks got my attention. Generally ad hominem attacks are used by those who consider the facts of the case to be dangerous ground, and wish to do anything that they can to avoid discussing them.
By Rowan Bosworth-Davies, a former head of investigations at regulator FIMBRA (Financial Intermediaries, Managers and Brokers Regulatory Association) and a former Scotland Yard Fraud Squad detective. Cross posted from Ian Fraser’s blog
“Go where you will, in business parts, or meet who you like of businessmen, it is – and has been for the last three years – the same story and the same lament. Dishonesty, untruth, and what may, in plain English, be termed mercantile swindling within the limits of the law, exists on all sides and on every quarter…”
No, this is not a comment from a contemporary website. It comes from an editorial published in Temple Bar – A London Magazine for Town and Country Readers in 1866. It was written at a time when England was experiencing a plethora of fraudulent offerings in railway shares, but the tenor of its complaint is as relevant today as it was then.
Read more...An important piece in the Financial Times by Manmohan Singh, a senior economist at the International Monetary Fund, describes persuasively how one of the central vehicles for reducing derivatives risk, that of having a central counterparty (CCP) and requiring dealers to trade with it rather than have a web of bi-lateral exposures, or rely on banks to act as clearers (making them too big to fail) has gone pear shaped. While the immediate reason for this outcome is the unwillingness of national banking regulators to cede powers to an international clearinghouse, Singh fingers an equally important cause: the reluctance to recognize that the underlying problem was and remains undercollateralized derivatives positions. His introduction to the mess:
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