Evening Links 8-3

August 3, 2009

(send links, pics, vids to optionarmageddon at gmail)

U.S. raids Colonial bank office in Florida, serving “TARP-related” warrants (Reuters)  Cheers for kicking butt and taking names.  As the special inspector general for TARP, Neil Barofsky has broad authority, including subpoena power and the right to carry a handgun.  This profile in the WSJ quotes critics that say he’s got too much Eliot in him, Ness or Spitzer, “over-stepping” his bounds or other such nonsense.  With the vast legal apparatus that rich banksters are able to hide behind, we need a guy who’s not afraid to offend delicate sensibilities.

Hot Waitress Economic Index (NY Mag)

Wall Street profits from trades with Fed (FT)  Makes a great point.  Too bad there aren’t any numbers here. But then the Fed won’t make that possible; it won’t let anyone audit its books.

Boom and Bust will be with us for some time (FT, via Kedrosky)  The former SocGen strategy duo (Montier recently left) take on the adaptive markets hypothesis.  Keeping economists honest!

Cops: Wife, three other women torture husband (Chicago Breaking News)  “Torture” is probably too strong a word.  Then again…

10 years ago, an omen no one saw (NYT)

Trump cuts price on Park Ave. penthouse by 40% (NY Post)  WSJ also had a good page 1 story this morning on the problems at the high end of the housing market.  So much for the top of the market being the last to decline and the first to recover…

Japanese couple turns down free trip to Rome, says would be waste of Italian taxpayers’ money (abc.net.au)

Barney’s illegitimate child? (imgur)  I can’t believe I never noticed the resemblance.

Cosmoplitan (incredimazing)


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RE: Colonial Bank and Neil Barofsky.

Apparently not everyone see’s it like that. Here is the only comment on the raid in the Orlando Sentinel by one A. Adams ( Neil may want to get a search warrant ready for him too)

If Colonial goes under you can bet interest rate for borrowers WILL go way UP. WHY?? Because so many independent mortgage lenders across the country, including Taylor, Bean and Whitaker have warehouse lines of credit for mortgage closings with Colonial. If Colonial is taken over by a big greedy bank that kills warehouse lending, you will have FAR fewer lenders to chose from/less ability to shop rates…and you know what that means.

Posted by sangellone | Report as abusive

So we should continue propping up bad lenders so they can keep offering taxpayer-subsidized lines of credit? We need to borrow less, not more. For that to happen, the price of credit has to adjust upward. If there’s less competition in banking because bad lenders are allowed to fail and that means higher interest rates for borrowers, then good. That’s how to get the economy out of debt, how to rebuild capital levels: People have to STOP borrowing.

Posted by Rolfe Winkler | Report as abusive

I guess I don’t understand the TARP angle, since CNB didn’t receive TARP funds (at least not the capital boosting preferred part). They were approved conditionally, pending getting private capital first.

On the wharehouse lines: It’s not like CNB is the only bank in the western galaxy that provides this service to mortgages lenders. We’re talking about a bank that is 1/100 the size of BAC, and 1/10 the size of USB and PNC. The loss of CNB’s wharehousing is hardly a systemic threat to the mortgage industry. It might inconvenience some, but it’s not a mortal threat.

I also like how people who are invested in failing banks lash out and place blame for their bank failing on “greedy big banks” and their “crony regulators” conspiring to enrich themselves.

Posted by Andrew | Report as abusive