Some Common Sense at Last about Banks- Volcker

This strikes me as the right approach.
Volcker Calls for Restricting Banks’ Risk, Trading Activity – WSJ.com
The comments reflect Mr. Volcker’s long-held view that banks should act more in line with their traditional role and not take extremely risky gambles, which could threaten the viability of commercial banks and expose the Federal Reserve and taxpayers to [...]

What is wrong here

X-posted at my class blog.
“Retention bonuses” would seem to be bonuses by any other name.  Obviously, public and political scrutiny is at super high levels as we reel from the financial crisis.
This little nugget caught my eye about a joint venture between Citigroup and Morgan Stanley:
According to the newspaper [The WSJ], not all of the [...]

Through the looking glass: Putting a Value on a C.E.O.

January 28- Update:
Maureen Dowd Agrees with me:
“If you don’t pay your best people, you will destroy your franchise” and they’ll go elsewhere, he said.
Hello? They destroyed the franchise. Let’s call their bluff. Let’s see what a great job market it is for the geniuses of capitalism who lost $15 billion in three months and helped [...]

Network Liabilities- Citigroup Pays for a Rush to Risk

The Reckoning – Citigroup Pays for a Rush to Risk – Series – NYTimes.com
But many Citigroup insiders say the bank’s risk managers never investigated deeply enough. Because of longstanding ties that clouded their judgment, the very people charged with overseeing deal makers eager to increase short-term earnings — and executives’ multimillion-dollar bonuses — failed to [...]

The Reckoning – Agency’s ’04 Rule Let Banks Pile Up New Debt, and Risk – Series – NYTimes.com

The Reckoning – Agency’s ’04 Rule Let Banks Pile Up New Debt, and Risk – Series – NYTimes.com
In loosening the capital rules, which are supposed to provide a buffer in turbulent times, the agency also decided to rely on the firms’ own computer models for determining the riskiness of investments, essentially outsourcing the job of [...]

No blank check for Wall Street.

No blank check for Wall Street.
This is worse than a bad deal – this isn’t a deal at all. This is a blank check to some of the richest companies in the world.
This is a blog post with a petition linked to  it.  I may not agree with all the language, but this is not [...]

FDIC does not publish its problem bank list

15 minutes of web searching for this mythical list of problme banks leads me to learn that the FDIC does not publiish the list.
Of course not.  It might cause people to worry about their deposits!  So, we have to protected from our own self-interest.
It is always the most critical information that is hidden.  One site [...]

Facing Default, Some Walk Out on New Homes

This NYT article caught my attention as a nice example of economic sociology.  The gist of it, captured in the quotation below, is about the shift in attitudes and practices around home buying and ownership in the US.   Traditionally home ownership is promoted by government policy and cultural norms because it is a means [...]

Market contagion

This will make economic sociologists of all of us.   Expand later…
A Crisis of Faith – New York Times
Today, we’re witnessing another kind of contagion, not so much across countries as across markets. Troubles that began a little over a year ago in an obscure corner of the financial system, BBB-minus subprime-mortgage-backed securities, have spread to [...]

The power of power- Warren Buffett throws $800bn lifeline to bond insurers

If you haven’t been watching the slow, ugly waltz to recession, the role of the bond insurers in the housing mess in the US has been crucial. Bored with insuirng boring (but so important) municipal bonds, the insurers decided to lend their good name too the high risk securitized mortgages which were the [...]