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Category Archives: Regulatory

Senator Dodd’s excellent proposal

From Jesse’s Cafe…
~~~~ ” Senator Chris Dodd made an interesting proposal this afternoon, and on thinking further it seems to be one of the most reasonable and practical suggestions that we’ve heard during this crisis.
The Senator proposed that whatever givebacks, restrictions, haircuts, penalties, oversight, pay cuts and equity arrangements that are written into the bridge [...]

Law becomes practice

Just some background for those not familiar with the process for rulemaking at SEC… it goes like this…
~~~~ ” Concept Release:The rulemaking process usually begins with a rule proposal, but sometimes an issue is so unique and/or complicated that the Commission seeks out public input on which, if any, regulatory approach is appropriate. A concept releaseis issued [...]

arrow in the Federal Reserve’s quiver

There is no better commenter in the blogsphere than Don-the-Libertarian Democrat… I’ve copied his post reviewing Federal Reserve Chairman Bernanke’s speech in Austin….
~~~~  Ben Bernanke gave a speech yesterday:
“As you know, this extraordinary period of financial turbulence is now well into its second year. Triggered by the contraction of the U.S. housing market that began [...]

New rules for raters…

Brilliant news reported by Marketwatch… new rules are coming… sounds excellent…
~~~ “Commissioners expected to vote unanimously to pass new conflict-of-interest regulations
WASHINGTON (MarketWatch) - The Securities and Exchange Commission is scheduled to take steps on Wednesday to expand its oversight of controversial credit rating agencies, which have been criticized for contributing to the financial crisis.
Commissioners [...]

Rater disincentives?

George Washington blog has some hard hitting comments about credit rating agencies…
~~~~ ” Well, the credit-rating agencies committed fraud in keeping the credit ratings for corporations that were failing too high for years. (See this and this). The government could easily prosecute them criminally for fraud.
But the government wants to keep its AAA credit rating. [...]

make believe world of interdealer CDS

 ~~~~ ” …What Geithner and Fed Chairman Ben Bernanke failed to tell the Congress, President-elect Barack Obama and the American people is that CDS dealers don’t post any effective collateral at all with other dealers. So much for the legal requirements for safety and soundness in 12 CFR. If Barack Obama and the Congress ever [...]

Japan 1999

~~~~ ” ….The real driver in the consumption problem is Mrs. Watanabe, the Japanese equivalent of the “soccer mom” in the US.
She is frightened.
If you took Mr. or Mrs Watanabe’s pulse in terms of job security, it has tripled in the last two years.
The reason for the fear probably is the collapse of Yamaichi Securities.
At [...]

Marshall Plan + Louisiana Purchase + Korean War + Vietnam War + Moon Landing

President Elect Obama and Treasury Secretary Designee Geithner are making an enormous bet with the nations patrimony…  ”the single most expensive expenditure in American history”… gentlemen… history is watching and will be measuring the outcome…
))))  )  ))))  )  ))))
~~~~ “ The government’s financial bailout will be the most expensive single expenditure in American history, potentially costing [...]

Cathedral derivatives

The derivatives news is flowing out… everyone is focused on the problem and pushing solutions… excellent… this monster will likely not be slayed but will suffer severe damage… keep beating friends…

“Creditex and Markit today announced the compression of $1.036 trillion in notional value of credit default swap (CDS) transactions since the successful launch of a [...]

Kitchen sink

From Econompic Data…
If nothing else you have to credit the creativity of the Fed/Res…
Imagine the “whiteboarding” of potential solutions…
Take a holiday guys…