Straw Horse? How About, Straw Herd?? “Long before Sanford Weill suggested last week that big banks should split up, Bank of America executives and directors considered the idea and then decided against it, said people close to the nation’s second-biggest bank by assets.” –“Bank Breakups: Not So Fast“; The Wall Street Journal (July 29, 2012)...Read More
“What Would TR Do?” “It’s too soon to tell.” –Mao Tse Tung’s response, when asked (in 1947) about the consequences of the French Revolution. Just as perspective is needed to appreciate signal historical events, so, too, is distance required to assess great individuals. More than a century after Teddy Roosevelt successfully challenged the monopolists and concentrated financial...Read More
Defective Designs — & Their Fallout Usually when a nuclear reactor is first shut down, an electric pump pulls heated water from the vessel to a heat exchanger, and cool water from a river or ocean is brought in to draw off that heat. But at the Japanese reactors, after losing electric power, that system could not...Read More
Voiding Credit Default Swaps In a book stuffed with scathing insights and blockbuster revelations, here’s perhaps the biggest one (courtesy of Michael Lewis, writing in The Big Short): The reason Citigroup (amongst others) is considered “Too Big Too Fail” isn’t because it holds over $1 trillion in ordinary Americans’ savings in their vaults. It’s not...Read More
The Too-Big-To-Fail Debate Advocates for cutting so-called “too big to fail” financial institutions down to (less threatening) size — I’m one of them — have rightly focused on the systemic risk such entities pose; the unfair, distorting effects on competition such a policy causes, due to the implicit federal guaranties backing TBTF companies (which drives...Read More
An Independent Voice on Financial Reform (Hmm, I wonder why . . .?) Senator Ted Kaufman, Joe Biden’s replacement in the Senate, has rapidly emerged as perhaps the leading Congressional advocate for real financial reform (Chris Dodd’s version doesn’t come close). Not a few people have noted that Kaufman’s path to the Senate — he...Read More
