Afternoon Links 11-10

November 10, 2009

Mishkin defends bubbles (Yves Smith) Yves tears apart former Fed Governor Frederic Mishkin’s op-ed in FT, for good reason.

Bank told to raise more common equity (8-k filing, ht frog) Hanmi bank in CA was told to raise capital, tangible capital in particular. Hopefully regulators continue in this direction with other banks.

FDIC’s “merit” reviews preceded failures (Sterngold, Bloomberg) At least three U.S. banks failed in the past year after the Federal Deposit Insurance Corp. deemed them healthy enough to qualify for a program that reduced the time examiners spent on reviews by at least 20 percent.

F150 the most common purchase in Clunkers program (Felix)

Dodd proposes bold financial overhaul (Drawbaugh, Reuters) Like the original systemic risk bill in the House, this one would have taxpayers front the cost of resolutions. Sheila Bair and Tim Geithner are on opposite sides of this argument. Geithner says a standing fund for financial resolutions would feed moral hazard. He’s right. Her argument is that financial firms would never pay back taxpayers. She’s also right. To me, this gets to the heart of why relying on resolution authority to solve the TBTF problem isn’t enough. You need to get medieval on these guys, breaking them up and simplifying their biz models so that they don’t pose a systemic risk in the first place.

Schabowski shrugged (Meyer, Slate) The unanswered phone calls and misunderstood memos that helped bring down the Berlin Wall.

NASA on crusade to debunk 2012 apocalypse myths (AFP)

Miss England gives up crown over brawl reports (Holden, Reuters) Eat your heart out Carrie Prejean.

Subway stops inches before woman on tracks (Break)

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