Rolfe Winkler

Lunchtime Links 1-8

January 8, 2010

Bank regulators issue interest rate advisory (FFIEC) This may sound boring, but it’s rather important. The FFIEC — a collection of bank regulators including FDIC, OCC, the Fed, OTS and NCUA — hasn’t issued such a warning since 1996. It wants banks to make sure they can handle rising interest rates….which seems to me a HUGE disincentive to lend. 5% mortgages originated today will lose mucho value as rates go back up. This is a huge reason banks “aren’t lending,” because up is the only direction for rates to go!

Mosler’s 11 steps to fix the economy

January 8, 2010

by Warren Mosler

1.  A full ‘payroll tax holiday’ where the US Treasury makes all FICA payments for us (15.3%).  This will restore ‘spending power’ and, by allowing households to make their mortgage payments, will fix banks from the bottom up.  It may also keep prices down as competitive pressures may lead businesses to cut prices, passing on their tax savings to consumers even as sales increase.

FDIC nibbles nicely at bank risk

January 8, 2010

Rolfe Winkler2.jpgSheila Bair looks to be leading the regulatory race to the top. The agency she oversees, the Federal Deposit Insurance Corporation, has recently unveiled a handful of clever ideas to contain risky bank behavior and protect the nation’s deposit insurance fund. Rival watchdogs fighting for turf will find it difficult to ignore FDIC’s latest tactics.

Keynesianism, Monetarism and Complexity

January 7, 2010

by James G. Rickards

The debate between Keynesianism and Monetarism is over; they both won. Obama’s approach to the crisis is breathtakingly simple – print money and spend it fast. For Keynesians, stimulus substitutes for private demand until the latter is jump started and stimulus can be reversed.  For Monetarists, the logic is equally simple – increase the monetary base to expand GDP.  Don’t worry about inflation until you see the whites of its eyes. Then withdraw the money after the job is done.  Easy.

Morning Links 1-7

January 7, 2010

Tim Geithner covered up AIG’s payments to counterparties (DealBook) Timmy G. knew it looked bad for AIG to pay out 100¢ on the dollar to counterparties like Goldman. So he told AIG to shut up.

Mosler vs. Rickards on fixing the economy

January 6, 2010

I have a treat to share with readers. Warren Mosler and Jim Rickards have agreed to an op-ed debate here on my blog. Over the course of a couple weeks, they’ll engage in intellectual fisticuffs about how to fix the economy.

Is the output gap smaller than we think?

January 6, 2010

Economist Kevin Kliesen at the St. Louis Fed asks that question in an article he published today.

Lunchtime Links 1-6

January 6, 2010

Let them eat lobster! (Yves, Naked Capitalism)

The weather according to economists: sunny! (Kedrosky) Group think…

How to combat the natural tendency to procrastinate (Economist)

Let’s get fisical (Bill Gross, PIMCO) In his latest investor letter, Bill Gross paradoxically laments the influence of special interests. Of course he was one of the chief special interests — representing the investor class — lobbying for government to support asset prices. He also questions how the market will perform when our government “sugar daddy” disappears, especially in light of the disappearance of foreign buyers of Treasuries.

Dodd to quit

January 6, 2010

The big news today comes out of Washington where Senator Chris Dodd, Chairman of the Senate Banking Committee, is expected to announce he won’t seek re-election in November. (Ferraro, Reuters)

Ugly CRE charts

January 6, 2010

From the Mortgage Bankers Association’s Quarterly Data Book:

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Alvin the Franchise

January 6, 2010

Rolfe Winkler2.jpgAvatar’s $1 billion in ticket sales is getting all the headlines, but Fox’s other holiday film, “Alvin and the Chipmunks: The Squeakquel”, may be more valuable to Rupert Murdoch  over the long run.

Afternoon Links 1-5

January 5, 2010

Must ReadGlobal bear rally will deflate as Japan leads sovereign bond crisis (Evans-Pritchard, Telegraph) Points to Ambrose for making lots of predictions in a single column! (ht Yves)

Gerry Levin’s mea culpa

January 5, 2010

Finally got around to watching this video. Kudos to Gerry Levin for taking responsibility for the worst merger in history. His comments about banks being malls instead of supermarkets is very true, but it’s not his, it’s Chris Whalen’s, who provided a helpful counterpoint in NYT’s non-mea-culpa from Sandy Weill. Their point is that the synergy Sandy Weill claimed for Citigroup — combining insurance with commercial banking with investing banking with retail brokerage, etc. — was bogus from the start.

Buffett: Shareholder activist

January 5, 2010

Shareholder activism is a tactic typical of Carl Icahn, not the Oracle of Omaha. Yet Warren Buffett has issued a press release asking other Kraft shareholders to reject Kraft’s proposal to use up to 370 million shares of stock to buy Cadbury.

Afternoon Links 1-4

January 4, 2010

Living on nothing but food stamps (Deparle/Gebeloff, NYT) The safety net of last resort: 2% of U.S. households report zero income other than a food stamp card.