Tamny is always good but this is a great point “a vanilla loan is every bit the speculation that a risky trade is”
The single biggest reason the current proposals for financial reform are all either irrelevant or destructive is that they are based on a faulty premise: the banks got in trouble because they were [...]
How is it that one man can be so wrong, so often, about such obvious things. Here he takes up the mantra that of course we need a consumer financial protection agency. If the banks are not duping the gullible then “ why are the most risky loan products sold to the least sophisticated borrowers.” [...]
As readers of Panic know we are big fans of AEI scholar Peter Wallison so we were thrilled to get his reply to our post yesterday (which you can find below.)
Richard and Andy,
I was delighted that you saw the distinction I have been trying to make between creditors and managements. Too many in Congress and [...]
This is among the most sober and well-argued pieces we have seen on the flaws of the administration’s financial reform proposals. We thought we might end up disagreeing more strongly when Wallison pulled out the old chestnut of the “moral hazard” supposedly created by too-big-to-fail. We have always been skeptical of the moral hazard explanation [...]
If free market types are to grapple effectively with the late crisis, they need to get one thing clear in their heads: The mega banks are not free market institutions. They are agencies of the government.
Creating and maintaining the currency is a core function of government, laid out right in the Constitution (c.f. “and regulate [...]
John Tammy, editor of Real Clear Markets is certainly right that it is absurd to expect the regulators to be smarter than the banks. But that’s only an argument against discretionary regulation, which is what got us in trouble. And banks like lawyers, perform a partly public function and for that reason will always be [...]
Learn more and read our editorial at The Huffington Post.
The Brits let the cat out of Obama’s bag. How quickly the they have dropped the pretense that the bank tax is about anything but raising money from a politically unpopular group. We especially love the quote from PM Brown who argues a bank tax is necessary to make sure the “contribution banks make to [...]
It seems like whenever the government or its apologists want to distract attention from government’s responsibility for the financial crisis they start talking about hedge funds. Thus Bloomberg’s headline today about Volcker’s testimony: “Volcker Says Hedge Funds Should be Allowed to Fail”
Well, when weren’t they? The only hedge fund that ever moved the U.S. government [...]