Wallace Stevens’ Thirteen Ways of Looking at a Blackbird came to mind Friday while watching bankers and regulators testify before the Senator Levin-lead bipartisan subcommittee hearing on “JPMorgan Chase Whale Trades: A Case History of Derivatives Risks and Abuses.” I was prepared to take notes and tweet (no pun intended), having carefully reviewed the subcommittee’s…
In yesterday’s New York Times, Joe Nocera incisively attacked the persistent falsehood that Fannie Mae and Freddie Mac were “ground zero” for the financial crisis. In “An Inconvenient Truth,” Nocera correctly observed that: “The reality is that Fannie and Freddie followed the private sector off the cliff instead of the other way around.” In an…
Possibly my two favorite things are 80s music and Goldman Sachs-related grandiosity. So, a combo is a special treat. We have them together with the BBC-broadcasted-boastings of independent trader Alessio Rastani. Rastani proudly proclaimed today, “This is not a time right now for wishful thinking that governments are going to sort things out . .…
We ended part i, with some questions. The answers to these questions could fill volumes. Yet, a high-level response is in order. First, can Dodd-Frank prevent another similar crisis? This is far from certain. The law depends too much on regulators to actually use the powers they have been granted. Past behavior suggests that they…
People are talking. And, they are not being kind. Word is, a year has passed, and Dodd-Frank is not living up to his potential. This observation is painful, but true. Yet, we should not blame the birthday boy. Here’s why. We expect him to be a doctor already, curing the bloated banking disease and immunizing…
Sheila Bair’s five-year term as Chairman of the Federal Deposit Insurance Corporation (FDIC) ends today, Friday, July 8th. During her tenure, Bair racked up an impressive list of achievements. Notably, even with the recent wave of bank failures, Bair managed to use only the industry-supplied deposit insurance fund (DIF), and not taxpayer dollars to shut…
This morning, in what may be her last address to the American Bankers Association (ABA) before her term ends in June, FDIC Chair Sheila Bair offered this vision: “First, I would like to propose to you a radical-sounding notion. And it is that increasing the size and profitability of the financial services industry is not…
As I feast on financial crisis books, thought I’d share this tasty bit from Dean Baker’s False Profits: Recovering from the Bubble Economy. On page 9, Baker writes: “Progressives do the conservatives’ bidding when we denounce them as ‘market fundamentalists.’ We should, instead, be exposing their use of government to set up structures that ensure…
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