Free Republic

In the financial regulatory overhaul bill that passed the House December 11, insufficeint regulation of over-the-counter (OTC) derivatives 'renders impotent' the enhanced resolution powers aimed at making sure large financial institutions are not too big to fail, according to economist Robert Johnson

When the New York Fed renegotiated its original $85 billion deal to bail out AIG last year, it "effectively" transferred tens of billions dollars of cash from the federal government directly into the coffers of the AIG’s counterparties, according to an audit by TARP Inspector General Neil M. Barofsky.

Barack Obama flew into San Francisco last night for a fundraiser after spending 4 hours in New Orleans. He didn't expect this-- Hundreds of tea party protesters greeted the president at the St. Francis Hotel. The City Square has a report from San Francisco with several photos.

From 2002 to 2007, Fannie Mae and Freddie Mac loaded up on $1.73 trillion of subprime and $1.44 trillion of Alt-A loans and securities, taking a lion's share of these markets, according to mortgage market guru Ed Pinto. The agencies' share of loans and securities, then, was higher than the total for all private label mortgage-backed securities market held outside the agencies' purchases -- contrary to widely held views in the mortgage markets. The two agencies hid the level of risky lending and investment in securities by failing to classify the loans initially as subprime or Alt-A.

The Administration’s proposal on the resolution of systemically-important financial institutions, if adopted, would lead to the creation of ‘zombie banks’ that can neither die nor restructure sufficiently to be viable.

As Ramadan begins, the U.S. Department of the Treasury recognizes the particular importance of charitable giving throughout the holy month of Ramadan for Muslims in America and around the world. Charitable giving is a fundamental characteristic of many faiths, and zakat, one of the five pillars of Islam, is a sacred obligation for Muslims. Treasury underscores its support for the important work of the charitable sector in providing essential services to those in need, both at home and abroad. Treasury remains committed to strengthening its engagement with the donor community and the charitable sector to support their efforts while at...

Question: Do you think leverage requirements should be part of any financial regulatory reform in the United States, regardless of what happens to Basel II capital requirements? Sheila Bair: Although the intense public debate over Basel II seems like a thing of the distant past, I remain committed to the idea that leverage requirements are important for banks not just in the United States but around the world. By providing capital even when risk-based measures (erroneously, as it turned out) indicate minimal risk, the leverage ratio is a critical part of our overall approach to capital regulation. When we emerge...

Does health care reform mean socialized medicine? No. The pending legislation relies on the private insurance sector to provide coverage, with the mandate that individuals and most employers participate. Liberal Democrats, including President Obama, contend that a government entity should be created to sell health insurance and compete against private insurance companies. This is the “public plan” that proponents claim is needed to keep private insurance rates from going too high. Such a plan appears unlikely to win approval in any final legislation because of vociferous opposition from Republicans and conservative Democrats.

Would the pending legislation encourage euthanasia of senior citizens? No. There is a misconception on this point because Section 1235 of the House health care bill (“Consultation and Information Regarding End-of-Life Planning”) would expand Medicare coverage to include reimbursement for medical consultations in connection with an individual's preparation of “advance directives,” such as a living will.

BARACK OBAMA has been pushing leaders in both chambers of Congress to produce health-care bills before the August recess, with an eye to enacting reform before the end of the year. After weeks of wrangling among the three different House committees with partial jurisdiction over the matter, the House has pipped the Senate to the post. On Tuesday July 14th Nancy Pelosi, the speaker, unveiled a grand strategy for health reform that is so far to the left of American political discourse that even moderate Democrats in the Senate (never mind the incensed and irrelevant House Republicans) held their noses....

Congress should compel over-the-counter (OTC) derivatives dealers to publish monthly the pricing models they use or register the models with the Securities and Exchange Commission, says risk analyst Christopher Whalen. Disclosure will reduce the complexity of derivatives. Even so, an outright ban is preferable to eliminate the "horrible damage" they have inflicted on the global financial system, Whalen contends in his written answers to 33 questions submitted by a Senate panel following his testimony last month. Mind Over Market has obtained a copy of Whalen's letter containing the Senators' questions and his answers, and has published the entire text below....

WASHINGTON (AP) — A Democratic official says Roland Burris will not run for a full Senate term in 2010. The source says Burris has begun informing Democratic officials about his decision. The official spoke anonymously because Burris had yet to announce his decision publicly.

According to an analysis by the San Francisco Fed, the American economy may be facing a jobless recovery similar to the one after the 1991 recession. Two current trends suggest such an outcome: an increase in the rate at which workers settle for involuntary part-time employment and a decline in the rate of temporary layoffs. The San Francisco Fed’s earlier expectation was that unemployment could peak at 11 percent in mid-2010 -- significantly higher than the consensus forecast of 10 percent by early 2010. Given the accelerating pace of joblessness, the peak might be even higher at 11.5 percent or...

Are Bonds the New Stocks? Q&A with Robert D. Arnott This prominent financial analyst contends that the ‘cult of equities’ has obscured for many the importance of bonds, which can outperform equities for extended periods of time.

ENGLAND: What do you think of the Public-Private Investment Program (PPIP) recently announced by Treasury Secretary Timothy Geithner? MELTZER: This is another bailout because most of the money is coming from the government and not the private sector. So, while it’s called a public-private partnership, the costs of the partnership are heavily skewed to the taxpayers. ENGLAND: Yes. MELTZER: So, let’s go to the fundamentals first. The system that we have had cannot survive for very much longer if the bankers make the profits and the public, the taxpayers, take the losses. That’s a system that the Obama Administration, and...

STATEMENT ON THE GLOBAL ANGLICAN FUTURE Praise the LORD! It is good to sing praises to our God; for he is gracious, and a song of praise is fitting. The LORD builds up Jerusalem; he gathers the outcasts of Israel. (Psalm 147:1-2) Brothers and Sisters in Christ: We, the participants in the Global Anglican Future Conference, send you greetings from Jerusalem! Introduction The Global Anglican Future Conference (GAFCON), which was held in Jerusalem from 22-29 June 2008, is a spiritual movement to preserve and promote the truth and power of the gospel of salvation in Jesus Christ as we Anglicans...

NEW YORK — Six Muslim imams who were forcibly removed from a US Airways flight last year and are now suing the airline for discrimination may also be suing some passengers who were aboard the flight. . . . . . .

A CNBC News Alert streaming across the bottom of the screen stated the following, more or less, about 3 PM: "Senator Remains in Coma. Condition Still Critical."

Don't look now, but Virginia is seceding again. On Sunday nine Episcopal parishes in Virginia, including the one where George Washington served as a vestryman, announced that they had voted to up and leave the U.S. Episcopal Church to protest its increasingly equal treatment of homosexuals. In 2003 an overwhelming majority of the nation's Episcopal bishops ratified the selection of a gay bishop by the New Hampshire diocese. This past June the church's general convention elevated Nevada Bishop Katharine Jefferts Schori to the post of presiding U.S. bishop. Jefferts Schori is the first woman to head a national branch of...

. . . . From its paltry discussion of America's counterinsurgency in Iraq, to its recommendations about troop levels, to its scathing condemnation of American diplomacy under Condoleezza Rice and Iraqi politics under Prime Minister Nuri al-Maliki, to its embrace of "engagement" with Syria and Iran, and to its unstated but clear call for American pressure on Israel to concede more "land-for-peace" to the Palestinians, the ISG report is strong on assertions but weak on arguments. . . . . . And what does the Baker-Hamilton Commission recommend? More of the same, except faster. We are going to embed more...