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Category Archives: Liquidity

Goldman Sachs comes late to the game

The Financial Times ran a story Monday about Goldman Sachs becoming the first big dealer to orient its business around electronic fixed-income trading and away from “hands-on” order processing in light of new regulations coming from Dodd-Frank. The story claimed that Goldman was a pioneer in this approach: Now Goldman could be one of the first banks to […]

How to untangle the credit rating agency’s conflicts of interest

The House and Senate conferees worked hard to today to reconcile their versions of financial reform. Agreement was reached on private funds, insurance regulation and the merger of bank regulators. A sticking point was on Subtitle C of Title IX which covers credit rating agencies. I’d like to recommend to Chairman Barney Frank and others that they propose […]

In response to Ben Bernanke’s claim of Fed independence

Federal Reserve Chairman Ben Bernanke gave a speech at the Bank of Japan on the importance of central bank independence and transparency… Chairman Bernanke espoused a lot of platitudes… but the reality of the Fed’s actions is their deep entanglement with the administration, Congress and Wall Street… I think we will be hearing more speeches […]

Kite flying

From FT Alphaville some comments from Tullett Prebon economist Lena Komileva on the similarities and differences between the growing Euro sovereign contengion and Lehman’s collapse… Basically she’s saying it’s an order of magnitude bigger this time… or maybe two orders of magnitude… ~~~ “…The current episode of the global crisis is similar to the crisis mechanism […]

AUDIT THE FED

President Obama should do Americans a favor and get behind the AUDIT THE FED amendment rather than fighting it. His actions in this matter subvert every campaign promise he made about accountability and transparency. When Congress passes the Sanders “AUDIT THE FED” amendment today important information will be audited by the Government Accountability Office such […]

Audit the Federal Reserve

The Dodd bill (Senate bill 3271) grants enormous new powers to the Federal Reserve. Senator Bernie Sanders of Vermont is filing an amendment (S. 3738) to “audit the Fed” which currently has fifteen cosponsors. America needs ponder if a private, independent institution should control such a substantial part of financial system without complete and thorough […]

Lehman 2.0

The global financial system is a tight web of connections. While the US Congress debates financial reform the Euro system is being shaken down by its weakest member Greece… In the financial crisis of 2007-2009 everyone was taken by surprise by “mortgage repayment” default risk… The assumption had always been that RMBS were sufficiently varied by […]

Glorious sunlight…

It’s so refreshing to see this lovely video of Senator Blanche Lincoln talk about her derivatives reform legislation… here is her draft… Somehow I sense the hand of CFTC Chairman Gensler in this process… and the spirit of House Agriculture Chairman Collin Peterson… yes… substantive forces to rein in Wall Street on derivatives are at […]

Is the next global crisis beginning?

It’s very helpful to see this chart. Data points like this show the extra risk that investors believe Greek debt represents. In September, 2008 when Lehman failed the global credit markets froze. Note how that impacted the the risk premium for Greek debt. FT Alphaville pointed to comments made by the Bank of France governor, […]

Dean Baker calls Greenspan testimony “silly”

Dean Baker, co-director of the Center for Economic and Policy Research, talks with Bloomberg about former Federal Reserve Chairman Alan Greenspan’s testimony to the Financial Crisis Inquiry Commission on his leadership of the central bank. And from the WSJ… ~~~ “Mr. Greenspan sought to lay blame for the crisis on international economic forces that were […]