So Alex Pollack poses an interesting hypothetical. “Would you take a guaranteed $0.77/$1.00 of your projected Social Security account in cash, today?” In other words, Sam’s Government sets up a barbershop and administers a 23% haircut in return for buying all the default risk that may or may not exist in the Social Security Program. Pollack suggested back in 2012 that a lot of people | Read More »
Back in 2009, which is the political equivalent of a geological epoch, the Financial Crisis Inquiry Commission (FCIC) was established to investigate what led to the general apocalypse of the financial markets in 2007-2008. It has long been suspected that the fix was in and the commission followed the Alice in Wonderland formula of “Sentence first! Verdict afterwards.” In a just-released book, former FCIC member | Read More »
So help me God, I have no way to refute the basic point that the Democrats are making about the CRomnibus fight right now. In fact, I might even go so far as to say they are right. Here we have a bill that will kick the funding question almost a full year down the road, increases government spending, funds a wildly unpopular and probably | Read More »
Che, Bernie and Leon – Ideological Bretheren So Diogenes wandered the City of Demville with his lamp. His shoulders sagged, his expression grew hang-dog. He searched in vain for one honest man other than Jonathan Gruber. Ah, but his eyes lit up and his frown turned around. There was one man….one honest man on the American Left. That one last defender | Read More »
Just over three years ago, subsequent to the Dodd-Frank financial “reform” bill passing, the Consumer Financial Protection Bureau came into existence. As Elizabeth Warren’s intellectual baby, it should be no surprise to conservatives that the CFPB is an exercise in the biggest kind of government. However, in the third year of the CFPB’s existence, a bevy of stories have broken that underline that the bureau | Read More »
Famous economist Adam Smith first used the phrase “the invisible hand” in 1759 and alluded to it- without mentioning it- in his landmark book, “The Wealth of Nations.” Basically, it described the self-regulating behavior of markets. This is not a dissertation on classical economic theory or the writings of Adam Smith. Instead, this is about Section 342 of the Dodd-Frank Wall Street Reform Act which | Read More »
This month and next mark the fifth anniversaries of the Housing Bust-caused financial crisis that led to TARP and other Fat Cat-bailouts and the election of the purveyor of Obamanomics. Next month also marks the seventh anniversary of the Election of 2006 that returned Democrats to power in the House for four years and in the Senate for six years and counting that have, along | Read More »
Joining me this week on PowerTalk is Alice Joe, executive director, Center for Capital Markets Competitiveness at U.S. Chamber of Commerce. Alice and I talk not only about The Dodd–Frank Wall Street Reform and Consumer Protection Act, but many of the issues it creates and the ensuing uncertainty. For example, did you know that certain aspects of Dodd-Frank could alter the way companies like McDonald’s, | Read More »
There’s nothing like a new batch of environmental, labor, healthcare, and financial regulations to jump start a lethargic economy, right? As The Hill reported yesterday, with Obama’s cabinet in place for his second term, the rogue agencies are ready to rule by executive fiat. These radical new executive nominees are chomping at the bit to regulate our economy to death, over and beyond what has | Read More »
Celebrity CEO Jamie Dimon has made a compelling case against breaking up major US financial institutions. He cites the advantages inherent to economies of scale and claims that bigger banks are able to get better leverage out of their assets and thereby give average customers like little old me a better deal on financial products.
What doesn’t get mentioned by Dimon and his entourage is the power of moral hazard, the implicit subsidy and the blackmail potential that all come implicitly with being a bank that is too big to fail. Without indulging in paranoia worthy of Beppe Grillo and looking for the Bankster under the bed, we still can make a reasonable case that bigger banks are given significant advantages that exempt them from the laws that mere mortals like little old me are forced to obey if we desire a peaceful life.
Proposing solutions to the financial crisis without looking into the federal involvement in housing is akin to enacting immigration reform without dealing with our southern border and points of entry. The federal involvement in housing, via the monstrosities know ad Freddie Mac and Fannie Mae, is what created the asset bubbles, propelled the growth of subprime mortgages, and took down the rest of the economy | Read More »
In 2010, Congress passed the Dodd-Frank Act, which created the new “Bureau of Consumer Financial Protection (CFPB),” an all-powerful agency vested with the power to limit the choices of consumers in financial markets, making it harder and more expensive to obtain credit. This unaccountable agency operates autonomously within the Federal Reserve and will not be subjected to congressional appropriations or oversight. Yesterday, the CFPB announced | Read More »
On today’s edition of Coffee and Markets, Brad Jackson and Ben Domenech are joined by Francis Cianfrocca to discuss the market fallout of Obama’s re-election, replacements for Timothy Geithner and what Elizabeth Warren’s election means for the banking industry.
Short and sweet, Governor Romney, I love my country, but I’m voting for you because of: Chris Stevens, Sean Smith, Glen Doherty, Tyrone Woods who died because they loved their country, and their pleas for security and later help during the fire fight went unheeded by the incompetence and politics played by the Administration. REVENGE The lies told by the Administration to the American public | Read More »
We can statistically quantify “Too Big To Fail” in a number of different ways. George Will of the Washington Post is man familiar with the uses (and perhaps the nefarious uses) of quantitative data. He tells us 5 banks hold assets equal to 60% of the GDP. The top 10 banks hold 61% of all commercial banking assets; they only had 26% 20 years ago.
Will’s basically Conservative bent leads him to not be fond of the Dodd-Frank Act inflicted upon American Industry by the current Obama Regime. I certainly agree and sympathize with this point of view. However, not liking Dodd-Frank is one thing, getting rid of it and the systematic problems that made its overreach tenable is a taller order than merely quantified complaining. To actually dismantle the TBTF Empire and the implicit guarantee it enjoys via Dodd-Frank, it may help us to indulge in some Presidential History involving too great men. President Andrew Jackson foresaw and attempted to prevent this problem. President Theodore Roosevelt solved TBTF in some industries other than banking.