Rolfe Winkler

Sander’s TBTF amendment

November 9, 2009

Now THIS is legislation to get behind. From Senator Bernie Sanders, Independent from VT.

For “new economics,” look to old economists

November 9, 2009

When it comes to managing the business cycle, mainstream economics have failed rather spectacularly, their prescriptions leading to increasingly violent bubbles and busts. For this reason there have been calls for a “new economics.” To get there, perhaps we just need to rediscover forgotten economists like Hyman Minsky and Ludwig von Mises.

Lunchtime Links 11-8

November 8, 2009

The economics of trust (Harford, Forbes) A great article. I’ve argued that markets need rules because without them the division of labor breaks down.

Amendment could neuter FASB

November 7, 2009

Sarbox isn’t the only regulatory regime under threat. As Ryan Grim writes over at HuffPo, an amendment has been introduced that would put FASB under the thumb of the new systemic risk oversight council, and give the council the power to literally do away with inconvenient accounting rules that pose a problem for banks.

Bank failure Friday

November 6, 2009

As per usual, we begin in Georgia. The last one of the night is a big one.

#116

    Failed bank: United Security Bank, Sparta GA Acquiring bank: Ameris Bank, Moultrie GA Vitals: as of 9/14/09, assets of $157m, deposits of $150m DIF damage: $58 million

Ameris Bank also bought American United two weeks ago.

Lunchtime Links 11-6

November 6, 2009

Fannie asks for another $15 billion (press release) That brings the company’s total draw on Treasury to $59.9 billion. Here’s the paragraph that scares me: “Total nonperforming loans in our guaranty book of business were $198.3 billion, compared with $171.0 billion on June 30, 2009, and $119.2 billion on December 31, 2008. The carrying value of our foreclosed properties was $7.3 billion, compared with $6.2 billion on June 30, 2009, and $6.6 billion on December 31, 2008.” Why is the value of nonperforming loans growing so much faster than foreclosures? If Fannie’s not going to foreclose, then why bother paying the mortgage?

Architect of Citi says bring back Glass-Steagall

November 6, 2009

Objective observers mostly agree that it doesn’t make sense for banks to be in the securities business, not if they’re explicitly insured by the government. Wall Streeters invent rationalizations to support the current structure because a large chunk of their profits come from trading.

Gold hits $1,100

November 6, 2009

Methinks gold is rising because investors are anticipating a big second stimulus to counter the rising unemployment rate.

Lunchtime Links 11-5

November 5, 2009

Fight over blog comments hits NH high court (NHPR, ht AK) Aaron Krowne is fighting the good fight for bloggers everywhere.

Legislation coming to break up big banks?

November 5, 2009

In a note to clients yesterday, Paul Miller of FBR Capital Markets wrote:

We are hearing that discussion of breaking up large financial institutions that pose systemic risk to the market is gaining traction on the Hill. At this point, discussions are in the early stages, but we understand that an amendment addressing breaking up institutions deemed “too big to fail” could be introduced in the House over the next few days. How does one define “too big to fail” and how would the divestiture process work – these are good questions that Congress will have to address as the discussion moves forward. To our understanding, any amendment that could be introduced in the coming week would likely be vague and would give the regulators discretion to determine which institutions qualify as “too big” and how to address the risk they pose to the system.

The race to the regulatory bottom continues

November 4, 2009

An amendment permanently exempting small public companies from complying with a key provision of the Sarbanes-Oxley Act advanced in Congress today, demonstrating the bankruptcy of our approach to reform.

Consumer bankruptcy filings increase

November 4, 2009

From the American Bankruptcy Institute (no link yet):

The 135,913 consumer bankruptcy filings in October represented a 27.9 percent increase over last October’s monthly total of 106,266, according to the American Bankruptcy Institute (ABI), relying on data from the National Bankruptcy Research Center (NBKRC). The October 2009 consumer filings represented an 8.9 percent increase from the September 2009 total of 124,790. Chapter 13 filings constituted 28.5 percent of all consumer cases in October, a slight increase from the September rate.

Evening links 11-3

November 3, 2009

It’s Japan we should be worrying about, not America (Evans-Pritchard) There’s no pretty way to de-lever…

Gold jumps to record on purchase by India

November 3, 2009

From Surojit Gupta and Lesley Wroughton, Reuters:

The International Monetary Fund has sold 200 tonnes of gold to the Reserve Bank of India for $6.7 billion, quietly executing half of a long-planned bullion sale that has threatened to slow gold’s ascent….