Commentaries

from Rolfe Winkler:

Afternoon Links 1-20

January 20, 2010

Must Read -- Short sale fraud + follow-up (Olick, CNBC) Great sleuthing from Diana Olick. Sounds like outright fraud being committed by big banks. One follow up question: In many cases, the second-lien holder is also the first lien holder. How is that impacting short-sales?

from Rolfe Winkler:

Rickards: You can’t print your way out of debt

January 20, 2010

Reader note: This is Jim's second piece in an ongoing debate with Warren Mosler about the economy. Here are links to previous posts in the series: Writer biographies / Mosler #1 / Rickards #1 / Mosler #2.  There will be one more post from each writer.

from Rolfe Winkler:

Is Conan O’Brien a $40 million bailout recipient?

January 20, 2010

Conan O’Brien is expected to receive some $40 million for leaving NBC, the media unit of General Electric, itself among the largest recipients of taxpayer help. While it would be a stretch to compare the late-night talk show host to a Goldman Sachs or Citigroup banker, he’s arguably only a few steps removed.

from Rolfe Winkler:

Lunchtime Links 1-19

January 19, 2010

MUST READ -- Souring mortgages, weak market put FHA on tightrope (Timiraos, WSJ) Good article, though Timiraos doesn't address the absurd circularity perpetuated by FHA Chief David Stevens when Stevens says, on the one hand, that more gov't lending protects the housing market from further declines, while simultaneously arguing that such lending isn't sustainable. That said, Timiraos has worked lots of interesting stuff into this piece, especially towards the end. For instance, in late '07 investors were refinancing at-risk borrowers into FHA loans in order to shift risk to taxpayers. Barney Frank defends permanently raising FHA maximum loans for certain geographies to $729k. Also lots of data about how badly FHA loans are performing.

from Rolfe Winkler:

Mosler: The wrong standard

January 19, 2010

Reader Note: This is the second entry from Warren Mosler in a debate with Jim Rickards about how to fix the economy. More on the authors here. This is a response to Rickards first piece. Mosler's first piece is here.

from Rolfe Winkler:

Does Volcker give the Fed too much credit?

January 18, 2010

Paul Volcker's speech to the Economic Club of NY last week (pdf) was generally reported as the latest example of the former Fed Chairman calling for more substantive financial system reform. He did repeat those points, but the focus of his speech was about the importance of the Fed maintaining its regulatory and supervisory authority over the banking system. At a certain point, this seems the stuff of absurdist theater. If the Fed never intends to use its regulatory authority, why insist the authority be maintained?

from Rolfe Winkler:

In Haiti crisis, a lesson for investors, givers

January 17, 2010

Well-known to businessmen everywhere, but totally under-appreciated by investors, is the concept of working capital, the day-to-day operating cash flow that makes a business run. Turns out the Red Cross has a big working capital problem when it comes to text message donations. From Carrick Mollenkamp (WSJ), Americans pledge millions, but cash flow takes weeks:

from Rolfe Winkler:

Bank failure Friday

January 16, 2010

The year has started off slowly: Only 4 closings the first half of January. Expect FDIC to pick up the pace...

from Rolfe Winkler:

Lunchtime Links 1-15

January 15, 2010

Consumer protection agency in doubt (Paletta, WSJ) Chris Dodd appears willing to trade the CFPA in exchange for Republican support of his financial reform bill.

from Rolfe Winkler:

Lunchtime Links 1-14

January 14, 2010

Obama to unveil plan on bank taxes (WSJ) Surprisingly this doesn't look dead on arrival in Congress, maybe because banks know that the tax -- spread over 10 years -- isn't likely to hurt very much. It's a missed opportunity to shrink big bank balance sheets.