Category: Regulation

Short selling is to financial markets what free speech is to political markets

Is it just us or are there a lot of unusually dumb pieces this morning? Somebody called Thomas Kostigen wants to flat out ban credit default swaps. We understand the impulse: When  CDS first became common they struck as a particularly appalling example [...]

As usual when regulators try to block conflicts of interest they just create a crisis of competence.
Of course investment advisors sell products in which they have a proprietary interest. Mostly it does not matter because it’s all plain vanilla stuff and the advisors know about as much as you can pick up in less expensive [...]

The Volcker rule is merely pointless. The Senate preference for regulatory discretion is really dangerous
In Panic we spend more than 200 pages explaining what caused the crisis: but here it is two sentence: Over the past 20 years we have had the most politicized banking system in U.S. history, with bankers more slavishly responsive to [...]

Gabcast! Richard Vigilante on Up Front Tuesday with Vicki McKenna.Â
 

The only thing surprising about Frank Luntz’s suddenly famous memo on how to oppose Obama’s financial reforms, is that anyone is surprised. Of course the House bill establishes permanent bail-out authority, and of course it sticks taxpayers with at least part of the bill. And the Senate bill will be even worse on this point.

Language [...]

It was a disappointing but not surprising piece in the NYT today from the man we still regard as the greatest Fed Chairman in history. Paul Volcker’s long and rambling commentary re-states one inoffensive but irrelevant reform proposal and another that would perpetuate the worst in the current system.
The small but irrelevant proposal is to [...]

Stiglitz, smart as he is, is allowing himself to be distracted by the President’s tendency to wander off in to irrelevant details that make good sound bites. Sure, forbid proprietary trading by commercial banks if you like; it won’t hurt. But it was utterly irrelevant to the crisis. Also the rule would tend to extend [...]

Here’s the President’s problem. It’s not just that he is far to the left of the average American. It’s that for all his high-mindedness he is operating in a different ethical scheme than most Americans—and he does not seem to know it.
What the President really seems to regard as the defense of high principle Americans [...]

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// That’s the only conclusion one can come to after reading Rep. Scott Garrett’s bonehead quote in the WSJ report on Obama’s financial reform speech. The WSJ reported Garrett as saying:
“This renewed focus on financial-services reform by the Obama administration is clearly a transparent attempt at faux-populism, in light of the outcome of the [...]