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So this guy decides to violate zoo policy and feed the liger face-to-face. Even when danger is this obvious, someone will always push the boundaries.
We show that losses on the most senior tranches referencing an index of investment grade credit default swaps are largely connected to the worst economic states, suggesting that they should trade at significantly higher yield spreads than single-name bonds with identical credit ratings. Surprisingly, this implication turns out not to be supported by the data.
And we have this extraordinarily complex globa1 economy which, as everybody now realizes, is very difficult to forecast in any considerable detail. Mr. Chairman, I know I agree with you in the fact that there are a lot of people who raised issues about problems emerging. But there are always a lot of people raising issues, and half the time they are wrong. And the question is, what do you do?
And the reason essentially is that a financial crisis must of necessity be unanticipated, because if it is anticipated, it will be arbitraged away, and if a financial crisis by definition is a discontinuity in asset prices, then it means from one day to the next people were surprised. Something fundamentally different happened. I think that, and I have argued this, and I am not saying whether the government resources are relevant to this, I think the academic community could do it surely as well. And what we do have to understand is that our view of the way an economy functions is not properly modeled by what we now have.
Several oil analysts — who predicted earlier this year that oil would reach $200 by year's end — have recently said that oil could drop to $50 a barrel.
what happened in the mortgage meltdown and the ensuing credit crisis demonstrates that where SEC regulation is strong and backed by statute, it is effective
challenge its reliance on the Basel standards and the Federal Reserve's 10% well-capitalized testOK, if the capitalization standards were much higher, say 15%, what would have been different?
credit default swaps ensured that when the housing market collapsed the effects would be felt throughout the financial system.So, blame the messenger, not the message. Cox harps on this a lot, as if the 'unregulated' credit default swaps, which are derivatives, are the basis for the fact that mortgages issued in 2006 had twice the loss rates as previous mortgages. If mortgages weren't worth 10 cents on the dollar, there would be no problem. The ABX.HE (subprime CDS) market highlighted that prior to any other indicator--way before the rating agencies. If anything, this diversified the risk, as opposed to aggrevated it.
Today’s balkanized regulatory system undermines the objectives of getting results and ensuring accountability.In other words, double his budget, increase his power, and all will be well.
That's a bit more quantitative than I have an ability to evaluate but...it is time to have a process that gets rid of regulatory gaps.So, in other words, I don't know about 'numbers' or 'estimates', even as vague as what Greenspan mentions, but more power for the SEC is still an obvious solution.
My strong, personal suggestion is that you are digging yourself deeper and deeper into public statements that you will regret. Now, not only is Friedman’s name expendable, the GSB political, but President Zimmer ’rushed this through.’ He’ll be delighted to see that in print. You may have long, convoluted explanations, but that won’t do much good when this sort of thing gets out.
Screw off, John
I see her and think she's as smart as I am. I want someone smarter than that in the White House
I know you worry about the economy. So do I. But, frankly, if you elect me, I won't do much about it... 'Energy independence' is a fraud. ... Without major technological breakthroughs, making big cuts in greenhouse gases will be impossible. ... Unless we stop poor people from coming across our Southern border ... we won't reduce [American] poverty."
Borders' Mr. D'Agostini said there are five titles that appear to most interest consumers. These include: Charles Morris's "The Trillion Dollar Meltdown," which Mr. D'Agostini says predicted market turmoil caused by subprime mortgages and Wall Street greed; David Smick's "The World is Curved," which cited the mortgage crisis as a early indicator of further problems ahead; George Soros's "The New Paradigm for Financial Markets," which looks at past crises and their significance for future events; Kevin Phillips's "Bad Money," which examines the state of the dollar, credit issues, and the world market, and Peter Schiff's "Crash Proof," which warned of a coming crisis and suggested how consumers could protect themselves.
Trillion Dollar Meltdown: Greenspan, deregulation, greed, over-the-counter derivatives, securitization, lack of public healthcare
World is Curved: globalization, financial complexity, reckless volatility
New Paradigm for Financial Markets: globalization, credit expansion, market fundamentalist beliefs, and deregulation
Bad Money: financial complexity, power in finance, market triumphalism, weak dollar, hubris
Crash Proof: weak dollar, inflation, US trade deficit
False facts are highly injurious to the progress of science, for they often long endure; but false views, if supported by some evidence, do little harm, as every one takes a salutary pleasure in proving their falseness.
Charles Darwin
Finite games are played to win; infinite games are played to keep playingI find that profound on many levels: the inherent meaningless of life ('just keep playing the game'), the prisoner's dilemma (screw the other guy in single-period interactions), why being nice to friends and colleagues is a good idea (you want to 'keep playing').
While the 1977 Community Reinvestment Act did call on banks to increase lending in poor and minority neighborhoods, its exact requirements were vague, and therefore open to a good deal of regulatory interpretation.
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At the same time, a wave of banking mergers in the early 1990's provided an opening for ACORN to use CRA to force lending changes. Any merger could be blocked under CRA, and once ACORN began systematically filing protests over minority lending, a formerly toothless set of regulations began to bite.
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As early as 1987, ACORN began pressuring Fannie and Freddie to review their standards, with modest results. By 1989, ACORN had lured Fannie Mae into the first of many “pilot projects” designed to help local banks lower credit standards. But it was all small potatoes until the serious pressure began in early 1991. At that point, Democratic Senator Allan Dixon convened a Senate subcommittee hearing at which an ACORN representative gave key testimony. It’s probably not a coincidence that Dixon, like Obama, was an Illinois Democrat, since Chicago has long been a stronghold of ACORN influence.
Dixon gave credibility to ACORN’s accusations of loan bias, although these claims of racism were disputed by Missouri Republican, Christopher Bond. ACORN’s spokesman strenuously complained that his organization’s efforts to relax local credit standards were being blocked by requirements set by the secondary market. Dixon responded by pressing Fannie and Freddie to do more to relax those standards — and by promising to introduce legislation that would ensure it. At this early stage, Fannie and Freddie walked a fine line between promising to do more, while protesting any wholesale reduction of credit requirements.
By July of 1991, ACORN’s legislative campaign began to bear fruit. As the Chicago Tribune put it, “Housing activists have been pushing hard to improve housing for the poor by extracting greater financial support from the country’s two highly profitable secondary mortgage-market companies. Thanks to the help of sympathetic lawmakers, it appeared...that they may succeed.” The Tribune went on to explain that House Democrat Henry Gonzales had announced that Fannie and Freddie had agreed to commit $3.5 billion to low-income housing in 1992 and 1993, in addition to a just-announced $10 billion “affordable housing loan program” by Fannie Mae. The article emphasizes ACORN pressure and notes that Fannie and Freddie had been fighting against the plan as recently as a week before agreement was reached. Fannie and Freddie gave in only to stave off even more restrictive legislation floated by congressional Democrats.
Finally, in June of 1995, President Clinton, Vice President Gore, and Secretary Cisneros announced the administration’s comprehensive new strategy for raising home-ownership in America to an all-time high. Representatives from ACORN were guests of honor at the ceremony. In his remarks, Clinton emphasized that: “Out homeownership strategy will not cost the taxpayers one extra cent. It will not require legislation.” Clinton meant that informal partnerships between Fannie and Freddie and groups like ACORN would make mortgages available to customers “who have historically been excluded from homeownership.”
Alan Johnson, managing director of pay consultancy Johnson Associates Inc., blames unrealistic performance targets for much of the risky behavior. He says executives of some financial firms he advised had to produce a return on equity of 20% to earn their full annual bonuses. A more realistic goal might have been around 15%, he says.Clearly, that's a recipe for disaster, because banking is about putting on assets that are often front loaded in fees, and often have average lives of 7 years. I would think a better compensation would be to give these guys options that mature in 5 to 10 years, or some function of net income, including extraordinary items, over such a period.
This is the worst point we have seen in 15 years,” said Jesse Toprak, head of industry analysis for the automotive Web site Edmunds.com. “And it is likely to be even worse in the month of October."
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“During the last 10 days of the month it was extremely weak,” said George Pipas, a market analyst at Ford. “It was tantamount, really, to a natural disaster.”
Condé Nast's Portfolio magazine had this to say recently about Wilmott: “Paul Wilmott, publisher and editor in chief of Wilmott, is looking pretty smart these days. Wilmott and his magazine, which is aimed at the quantitative-finance community - the math geeks at banks and hedge funds - foresaw many of the problems that dominate the headlines today. He and the contributors to the magazine, whose influence far outstrips its small circulation, were railing about the limits of math and financial models far in advance of the meltdown."
We had a bad banking situation. Some of our bankers had shown themselves either incompetent or dishonest in the handling of people's funds. They had used the money entrusted to them in speculations and unwise loans . . . It was the government's job to straighten out this situation and do it as quickly as possible.