- Jurisprudence Fetishist Gets Off On Technicality | The Onion – America’s Finest News Source
This one’s for beowulf.
Video: Steve Keen on modelling and the Krugman debate | Credit Writedowns
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Mike Norman Economics: The often repeated, BS line that the Fed is “debasing” the dollar
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Streetwise Professor » When the Levee Breaks, Redux
He’s anti-clearing house, but I still don’t know why. Nothing solves every problem, and clearinghouses have less problems than non-cleared derivatives. Yes, they are still open to systemic risk, but these would be largely known, and so much easier to firewall, too. And why isn’t he talking about MF global? It’s downright weird. MF global could not have happened under a clearinghouse.
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The Coming Housing Finance Train Wreck « naked capitalism
“So how may this turn out? It’s a no-brainer that we will continue to have a housing market dependent on the willingness of the Federal government to continue to guarantee pretty much all mortgages. The GSE wind-down is on auto pilot. It is not inconceivable that the Republicans will try to rein in FHA lending, either in terms of tightening quality standards or imposing limits on the total guaranteed per year, which will further limit overall mortgage credit, again relying on the mistaken belief that if the government “got out of the way,” private sector lending would resume. While there is a price at which private loans would get done ex better investor protections, it’s at a much bigger premium than borrowers can stomach (one investor said he’d lend at a 5% premium to Fannie and Freddie rates. He’s greedy, so let’s reduce that by 50%. That’s still a deal-killer for most prospective buyers).”
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Three Corporate Myths that Threaten the Wealth of the Nation « naked capitalism
Yves has taken a pretty big turn left over the last few years. Not entirely unwelcome, either.
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Far Too Low for Far Too Long | Rortybomb
More on how similar sounding words come from very different assumptions.
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FT Alphaville » Counting the collateral, Main Street edition
wow Credit Suisse and Cardiff Garcia are knocking it out of the park.
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To Seriously Improve Global Health, Reinvent the Toilet – Bloomberg
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Meet the New Boss – Magazine – The Atlantic
Rahm seems pretty good so far. He loves Chicago, just like Daley Jr. did. Surprisingly, that counts to be an effective mayor.
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Political Animal – The Case Against Principal Forgiveness Is The Case For Mass Refinancing
Thanks for the link, but . . .
1. I am not clearinghouse. I am anti-clearing mandate. There is a difference. Read my research and maybe you’ll figure it out. Maybe. I am also pushing back on clearing propaganda from the likes of Timmy! and GiGi and Barney and Chris. I want to make it plain that CCPs are not panaceas, and pose their own risks. Maybe if you pay attention you’ll notice that regulators around the world are making the same warnings. Warnings I’ve been making for 3+ years. You need to get up to speed.
2. MF Global couldn’t have happened under a clearinghouse? Really? The whole point of MF Global is that customer moneys that were held in segregated accounts *as margins for cleared futures positions* (and extra funds that customers kept primarily to facilitate margin calls and the opening of new cleared positions) were used by the firm. For you to say that “MF Global could not have happened under a clearinghouse” is just embarrassing.
3. I haven’t written anything recently on MF Global because there are no new facts: when there are, I will weigh in. I wrote about it quite a bit when it happened. A good deal of what I wrote was deconstructing some of the false and misleading claims about the obligation of CME’s clearinghouse to MF Global customers. Which kind of shows that the MF Global disaster “happened under a clearinghouse.”
Are you claiming the trade which required additional funding from MF Global to JPM would have required that same additional funding in a clearing house setting?
I’d like to be sure you are making that specific claim. Because it seems to me if that derivative trade was commonly cleared, the change in MF Global’s credit rating would not have required the massive amount of additional margin which ended up triggering felonies, the bankruptcy and the loss of customer funds.
With a commonly cleared derivative – where the clearing house is the counterparty to every trade, long and short – this additional margin would not have been required. Or if there were additional margin requirements, they would have been minimal at best. You know this, because you do know clearinghouses.
The squeeze JPM puts on MF can’t happen if the derivative trade is commonly cleared, because the market for these derivatives didn’t change much in response to changes in credit worthiness of the clearing members. Changes in margin happen when price volatility significantly changes.
I do not know why you would think JPM could have still caused an MF Global bankrupcty in this case.
“Jurisprudence Fetishist Gets Off On Technicality”
Secretly, he was hoping for a hung jury.
I liked the asteroid story. It sounds disturbingly plausible.
“In a strong rebuke of President Obama and his domestic agenda, all 242 House Republicans voted Wednesday to repeal the Asteroid Destruction and American Preservation Act, which was signed into law last year to destroy the immense asteroid currently hurtling toward Earth.”
http://www.theonion.com/articles/republicans-vote-to-repeal-obamabacked-bill-that-w,19025/
I laughed and laughed at that one.
“In support of their position, Democrats have pointed to estimates from the nonpartisan Congressional Budget Office that show repealing the law could result in a loss of up to $14 trillion in the nation’s GDP.”
Maybe there is something to this, but I can’t help but think this is the phase where conservative economists switch from ‘austerity works’ to ‘the right kind of austerity works.’ Got it from Mankiw’s blog…
http://www.voxeu.org/index.php?q=node/7836