It’s more than 18 months since Mortgage Resolution Partners (MRP) first came to general public attention, and since I wrote three substantial posts explaining exactly why, as the headline of the first post says, “using eminent domain for liens is a bad idea”. The idea is still a bad one, but it lives on — and now Shaila Dewan has delivered a 2,500-word piece in the NYT about its status in Richmond, California — the town where it is closest to being enacted.
13 months ago, the Hurricane Sandy jobs report was released — the one for November 2012. Analysts were bracing themselves: a lot of people hadn’t been able to work that month, due to bad weather. But in the end, the report was not that bad: 146,000 new jobs were created in the month, and the unemployment rate nudged down to 7.7%. Markets, which had been expecting a mere 80,000 new jobs, were positively surprised.
If you want a good test of whether someone is an ideologue on the subject of bank prosecutions, just have them look at today’s agreement between Eric Schneiderman, the New York attorney general, and Blackrock. If they think it makes perfect sense, and that Schneiderman should have pursued this line of prosecution, and that Blackrock has been behaving badly, then they will never find a bank prosecution they don’t love. Because this thing is an utter farce.
It’s hardly news that in the run-up to the financial crisis, some banks created highly-toxic collateralized debt obligations, and other banks bought those highly toxic CDOs and put them on their balance sheets. The result was that when the crisis hit, and the CDOs plunged in value, a lot of banks needed to take a lot of write-downs.
When JP Morgan paid its record $13 billion fine for problems with its mortgage securitizations, the bank came out of the experience surprisingly unscathed, in large part because Wall Street reckoned that the real guilt lay mainly in the actions of companies that JP Morgan had bought (Bear Stearns and WaMu) rather than in any actions undertaken on its own watch. There was a feeling that the bank was being unfairly singled out for punishment — a feeling which, at least in part, was justified.
At the end of December, I wrote about the non-scandal of Scott Irwin and Craig Pirrong, a response to a hit-piece in the NYT by David Kocieniewski. Later that week, Kocieniewski offered to answer questions about his article, so I provided some. Here are my questions, along with Kocieniewski’s answer:
The white-goods queen of Eighth Avenue asks my opinion on @aoscott adgate. I take requests, over here, so: is it kosher for a movie producer to selectively quote from the Twitter feed of the NYT’s movie reviewer, in a print ad, even when the reviewer in question explicitly said he would not give permission?