Morgan Stanley Banker Who Stabbed Cab Driver Fired by Firm

By: Friday December 21, 2012 1:04 pm

I was racking my brain for one final story that sums up this era in politics, the state of our world circa 2012, and I have to give it to this one from a few days ago. William Bryan Jennings, whose parents obviously hoped for a Progressive populist reformer as a child, grew up to [...]

Corporate Loans to Highly Leveraged Companies Proliferate

By: Friday December 21, 2012 8:30 am

This seems like a great time for banks to start loosening their lending standards. After all, household balance sheets are strengthening, and with mortgage rates so low, they can better afford the loans. Oh wait, you’re not talking about banks loosening their lending standards to individual homeowners? Only to corporations? Never mind. Regulators are concerned [...]

What the Housing Market Actually Looks Like

By: Thursday December 20, 2012 8:30 am

This week brought more good statistical news for the housing market. Existing home sales rose at a decent clip in November, nearing post-bubble highs not seen since the artificial spike from the homebuyer’s tax credit (I’ve noted that the end of the Mortgage Forgiveness Debt Relief Act could be giving the same spike). Inventory fell [...]

SEC Report on Credit Ratings Highlights Conflict of Interest Inherent in Issuer-Pays Model

By: Wednesday December 19, 2012 11:39 am

The Securities and Exchange Commission released a report on the method for how credit rating agencies get their business, something mandated by the Dodd-Frank financial reform law. And just as expected, it showed a serious conflict of interest in the current business model, where rating agencies are paid by the issuer of securities, and have to compete for their business, adding all sorts of distortions into the kinds of ratings they give. A better model, envisioned by Dodd-Frank at first but then put into this study, would allow an oversight board to dole out to qualified ratings agencies the securities that would get rated, removing the conflict of interest entirely.

Mortgage Backed Securities Lawsuits Still Proliferate

By: Tuesday December 18, 2012 7:35 am

While we wait for more settlements in the Libor case, banks continue to face exposure for their fraudulent mortgage conduct dating back to the housing bubble. Two more major lawsuits emerged yesterday. DZ Bank, a cooperative from Germany, sued Bank of America over $546 million in mortgage backed securities. The same firm has sued Morgan [...]

Republicans and Democrats Speak Out Against “Too Big to Jail” HSBC Case

By: Monday December 17, 2012 8:30 am

We now have bipartisan anger at the decision to hold HSBC and its executives harmlessfor years of money laundering and facilitating the culture of Mexican drug cartels. In fact, only the shareholders will pay, and not all that much, what amounts to five weeks’ worth of profits for the bank. The certainty of not being [...]

Yes, We’re Still in the Middle of a Foreclosure Crisis

By: Thursday December 13, 2012 3:26 pm

The Office of Mortgage Settlement Oversight released some interesting data on the first-lien and second-lien portfolios of the five services sanctioned in the foreclosure fraud settlement. Calculated Risk reproduces the data here. Despite the heavy investment in a narrative of the foreclosure crisis being over and the housing recovery underway, these loan portfolios show substantial [...]

FHA’s Passivity Could Lead to Big Loan Losses

By: Thursday December 13, 2012 10:05 am

Gretchen Morgenson has an interesting story today about risky lending at the FHA AFTER the housing collapse. The story here is that, after the bubble popped, it became harder and harder to secure a loan. The FHA stepped in to insure a lot of what loans were made over that time, and as a result [...]

Fed Cracks Down on New Mergers at the Biggest Banks

By: Thursday December 13, 2012 9:15 am

I do go on about the lack of regulation at the big banks. But I’ll have to grant the Federal Reserve a modicum of credit for this action: The Federal Reserve is pushing large U.S. banks to forget about all but the smallest acquisitions for a while amid a raging debate over the risk big [...]

The HSBC Money Laundering Case as a Perfect Symbol of Too Big to Fail

By: Thursday December 13, 2012 6:19 am

Maybe I was too blasé about the federal government letting HSBC off the hook; certainly the story has effectively shown how Too Big to Fail continues to be the watchword of the financial regulatory community. My pet theory here is actually that, because practically every mega-bank engaged in this same type of money laundering for [...]

Elizabeth Warren Formally Gets Banking Committee Slot

By: Wednesday December 12, 2012 12:51 pm

Senator-elect Elizabeth Warren officially received her committee assignments today, and she will sit on the Senate Banking Committee, with key oversight over Wall Street and the financial system. Progressives agitated for weeks for Warren to get this spot, and in the end it wasn’t that difficult a lift. I’m looking forward to future hearings from [...]

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