Feb 23, 2012 16:03 UTC

New US finance sheriff carves out shadowy domain

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By Rob Cox and Daniel Indiviglio
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.The American banking industry has had a rough few years. The subprime meltdown, financial crisis and economic hardship have slammed stocks, slashed bonuses and crunched jobs. But life has been pretty sweet for a motley crew of companies – from cash checkers and credit bureaus to money wirers and debt collectors – operating on the edges of the regulated financial services industry. That may be about to change.

The recent recess appointment by President Barack Obama of Richard Cordray to lead the newly formed Consumer Financial Protection Bureau will, for the first time ever, throw a federal regulatory lasso around the biggest players in the shadows of finance. In the same way that enhanced regulation has curbed many of the excesses on Wall Street, so, too, may the increased scrutiny of this netherworld of the money industry.

COMMENT

Talk about being out of touch! Consumers are not endangered by payday loans. Nobody is forcing us to use them, and it’s unclear how many actually do use them… Yet far too many of us took out risky mortgages to buy over-valued homes in our communities. Interest rates are at an all time low, yet many of us can not refinance, or even find our mortgages as they have changed so many hands in the derivatives market. What’s being done about that?

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Feb 21, 2012 22:12 UTC

Happy stock highs belie bonds teetering on edge

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By Robert Cole
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Some nice round numbers have equity investors smiling. The Dow Jones industrial average crossed the 13,000 level for the first time since before the crisis and Britain’s FTSE 100 index is headed towards 6,000. Many in the market may be wondering if the run can be sustained. But the real danger may be lurking for bondholders.

Feb 8, 2012 22:35 UTC

Renters need to flex muscle in U.S. housing debate

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By Agnes T. Crane
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Though America’s mortgage system subsidizes homebuyers, its dysfunction has cost all taxpayers dearly. Few constituencies with much clout are pushing for change. But the nation’s 39 million rental households – often an afterthought in the housing debate – ought to be up in arms. They might find unlikely allies, too.

COMMENT

It certainly is understandable that renters would be less organized than the Real Estate Industrial Complex made up of brokers, agents, owners, banks, etc… Unfortunately, their control of the legislative process and policy in this realm is as strong as it gets. Renters get a break every now and then when market forces convulse under horrible policy – but policy makers get right back to punishing renters.

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Feb 8, 2012 15:45 UTC

Still a long slog ahead for U.S. jobs

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By Daniel Indiviglio and Richard Beales

The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

There’s still a long slog ahead for the unemployed in America. Jobs growth has started picking up. But even at a rate of 250,000 a month, a hair above January’s figure, full employment may not be reached until 2020. A new Breakingviews calculator shows how a faster or slower rate of job creation changes that picture.

Jan 31, 2012 20:12 UTC

Gingrich makes Goldman 4-letter word – to no avail

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By Daniel Indiviglio

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The Florida Republican primary’s big winner tonight may be Wall Street’s most infamous bank. Front-runners Newt Gingrich and Mitt Romney are trying to connect one another to the financial crisis. Gingrich paints his rival as an agent of the giant vampire squid, while Romney criticizes his opponent for being paid handsomely for advising Freddie Mac to inflate the housing bubble. But in a state still in pain from the bust, Romney’s line is winning.

Jan 27, 2012 20:45 UTC

U.S. private sector emerges from government shadow

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By Martin Hutchinson

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The U.S. private sector is emerging from government’s shadow. Headline annualized GDP growth of 2.8 percent in Friday’s fourth-quarter data looks more anemic when inventory growth is netted out. But overall in 2011, as government has retreated private enterprise has regained strength.

Jan 26, 2012 16:08 UTC

Uninvited guest, Mr 99 Percent, crashes Davos

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By Rob Cox 

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The most difficult guest to avoid bumping into at the World Economic Forum this year has no badge. He was not invited to the annual gathering in Davos, but he haunts the panels, hallway conversations and politicians’ speeches. He is Mr. 99 Percent, the specter of the unemployed and disenfranchised.

COMMENT

What, like blood flow, capitalism cannot stand is constriction. Put a rubber band around your finger and watch it fall off. Blood pressure is all important as any doctor can tell you. tourniquets are counter-indicated when the problem is dehydration. A transfusion, a massage; more like it.

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Jan 25, 2012 22:37 UTC

Fed doubles risk of being whipsawed by market

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By Martin Hutchinson

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The U.S. Federal Reserve could be setting itself up for an uncomfortable surprise. It extended its commitment to keep interest rates near zero from about 18 months to three years on Wednesday. Job creation, the departure of Chairman Ben Bernanke or rising inflation could force a damaging reversal before then – or lead the Fed to drag its feet to avoid one.

Jan 20, 2012 18:46 UTC

Latest U.S. bank stock surge could prove fickle

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By Antony Currie

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The latest bull run in U.S. bank stocks may prove fickle. The big six, including Goldman Sachs and Bank of America, have added $100 billion of market value since mid-December, a 23 percent jump, despite meager fourth-quarter earnings. Receding fears over Europe have helped better align bank valuations with balance sheet and income realities. But no further rally is warranted with more ugly surprises likely.

Jan 19, 2012 21:49 UTC

Alluring subprime debt can still poison investors

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By Agnes T. Crane

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Subprime mortgage debt has got its mojo back. A growing number of investors reckon there’s life yet in the mortgage market’s toxic sludge from the crisis – and that now’s the time to buy. But buyers should tread carefully.