Canadian De Tocqueville Does Finance The world’s concentrated financial sector has been grabbing more than its fair share of wealth because it has been able to and this must stop. “This is like looting,” said outspoken Boston money manager Jeremy Grantham. “This industry can grow to gobble up all the benefits of the real economy...Read More
“Buying Too Many Votes — er, Mortgages?” Dear Jack: Don’t buy a single vote more than necessary. I’ll be damned if I am going to pay for a landslide.” –JFK quoting a made-up telegram from his father, Joseph Kennedy What recalls the above anecdote is Ben Bernanke’s so-far successful efforts to keep mortgage rates low...Read More
“It Depends on What the Definition of ‘Is,’ Is” Too much risk is just as bad [as too little]. Just ask the financial wizards at American International Group who ended up on the wrong side of tens of billions of dollars in financial contracts, almost bringing down the world’s biggest insurer. –Andrew Ross Sorkin, “Taking...Read More
“Assisted Living” Are the too-big-to-fail banks suddenly healthy? Call me skeptical, for all the reasons listed below: Take any industry you like, eliminate half of the combatants, and give the remainder fat government guarantees, free money and relaxed accounting standards, and JPMorgan Chase & Co’s second-quarter profit of $2.7 billion doesn’t look so remarkable. Even...Read More
Greedy, Stubborn & Stupid? No, Just Greedy I’m sure like a lot of people (and almost all *Realtors), I assumed that banks’ unwillingness to modify underwater mortgages en masse was due to greed, stubbornness, or stupidity — or a combination of all three. And while I think that there’s plenty of evidence to support that...Read More
