James Pethokoukis

FCIC report: 10 causes of the financial crisis

January 27, 2011

The other dissent (written by Keith Hennessey, Douglas Holtz-Eakin, and Bill Thomas) to the main Financial Crisis Inquiry Commission report identifies 10 causes for the meltdown. They run through them in a WSJ op-ed:

FCIC report: So why did U.S. have a financial crisis?

January 27, 2011

The Financial Crisis Inquiry Commission report is out, and it also includes two separate dissents. There’s a metaphor contained in the dissent by Peter Wallison of the American Enterprise Institute which does a pretty good jobof  describing the majority take and his critique of it:

Fannie and Freddie could need $363 billion in taxpayer funds by 2013

October 21, 2010

Ugh.

The Federal Housing Finance Agency (FHFA) today released projections of the financial performance of Fannie Mae and Freddie Mac (the Enterprises) including potential draws under the Preferred Stock Purchase Agreements (PSPAs) with the U.S. Department of the Treasury. To date, the Enterprises have drawn $148 billion from the Treasury Department under the terms of the PSPAs. Under the three scenarios used in the projections, cumulative Enterprise draws range from $221 billion to $363 billion through 2013.

A bank tax? Really?

October 18, 2010

I just did a CNBC  spot debating whether robust banks profits should spur new efforts to tax them. Here were my talking points:

Obama vs. the hedgie

September 21, 2010

Here is a bit-o-goodness from my Reuters Breakingviews column on the Obama-CNBC town hall yesterday .

The future of Fannie and Freddie? None

August 19, 2010

Bond guru Bill Gross warned on Tuesday that without U.S. government guarantees, only mortgage bonds backed by super-safe loans, would interest him. He frets too much. The funeral of Fannie Mae and Freddie Mac may be coming, but housing support from D.C. will live on. The key question is how much.

Did Obama just sign a bailout out bill?

July 21, 2010

I think on this matter, this American Banker interview with Sheila Bair is instructive: But does this bill stop them from happening?

Financial reform meltdown

June 29, 2010

Democrats are reopening the House-Senate  conference committee to deal with GOP opposition to the $19 billion tax to pay for the bill.  This likely means that Dems not only didn’t have Scott Brown’s vote, but either Susan Collins, Olympia Snowe or Chuck Grassley went from “yes” to “no.”  Maybe all of them.

Is financial reform in trouble thanks to Brown and Byrd?

June 28, 2010

The political calculus for U.S. financial reform is suddenly more complicated. Last Friday’s 5 a.m. Capitol Hill compromise was meant to be the culmination of months of hard-fought wrangling. But Republican Scott Brown’s wavering and Democrat Robert Byrd’s death put the proposal back in jeopardy.  I think the assumption is that Dem “no” votes Cantwell and Feingold will both switch to “yes” so that in the end losing Brown and temporarily losing the WV Dems vote won’t matter. But even though the early spin was that the bill got tougher on Wall Street at the end, bankers aren’t jumping from the windows today. That might irk Cantwell and Feingold and keep them against it. But I doubt it. Give the  bill a 80-90 percent chance of passage.

For banks, financial reform taking turn for the worse

June 24, 2010

Wall Street always knew financial reform was coming. The big banks never really thought there was a chance of killing it, not that they really tried to. In fact, once the effort moved into 2009, they wanted it over sooner rather than later. The longer the process dragged out, the greater the chance of something crazy popping up and the more political and profit damage they took. For instance: The “break up the bank” movement was almost successful. As it is, the Volcker rules and derivatives reform may end up far tougher than their worst-case scenario.