Lunchtime Links 7-18

July 18, 2009

CIT’s Peek may be paid ahead of Treasury in case of bankruptcy (Bloomberg)  TARP money came in the form of preferred stock, which is junior in the capital structure to both employees and creditors.  Those folks get paid out before others when bankruptcy divides up the pie of assets.  Peek is owed $14.7 million if terminated or there’s a change in control.  He’s likely to get that money before taxpayers get a dime of their $2.3 billion of TARP preferred, which is now effectively worthless.  Not bad pay for having driven a company into the groun

What went wrong with economics (Economist)  and On the Unwillingness of Economists to recant (Naked Capitalism)  I’m linking to the Economist piece b/c it’s a decent take-down of the economics profession.  The glaring omission is that Austrians, especially those who focus on Minsky’s Financial Instability Hypothesis instead of Keynesianism and/or efficient market theory, most certainly got it right.  What this article should say is that the crisis demonstrates not only the bankruptcy of neo-classical economics, but the superiority of the Austrian school.  The Naked Capitalism link has a good anecdote that demonstrates how far up their own behinds most economists’ heads remain.

Foreigners still buy U.S. assets, but only the most liquid ones (CFR)  Lots of great data.

Satyajit Das weighs in on derivatives regulation (Naked Capitalism)  Another great one from Yves, she analyzes and links to this piece.  The takeaway is that the Obama administration isn’t coming down nearly hard enough on the OTC derivatives market, not if it wants to eliminate systemic risk.

Security Savings Bank: not so solid ground (Bank-Implode)  More evidence that OTS is totally feckless.

Another Goldman appointment in the Obama administration (WSJ)

New pictures of moon landing site (Discover Mag)  Pretty cool.

Why does anyone still listen to this guy?


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Thanks for posting the new ex-Goldman appointment.

I’m hoping that someday we redevelop the concept of conflict of interest in the revolving door between Wall St and the White House.

Posted by Dave | Report as abusive

That Security Savings (Kansas Bank)story is real funny read – with some very important information showcasing how our regional banks are just as much of a problem as the big ones becuase their regulator is incompetent or in bed with the bank. Thanks for showing us this story Rolfe.

Posted by P. Griffin | Report as abusive

I thought the exact same thing when reading the Economist piece. The Austrian school still gets no respect in MSM. But it is gaining followers. I did a post on this a few weeks ago, Austrian School on The Rise:

Posted by Adam Sharp | Report as abusive