Free Republic

Joe Biden feigned shock when the Supreme Court ruled that he had no authority to wipe out tens of billions of dollars in student loans at the stroke of a pen. The issue is so clearcut, it’s hardly imaginable that we could need to explain it, but let’s begin with that part, to be thorough. Millions of people knowingly, willingly signed onto student loan debts, often while studying for degrees in fields that are well-known for producing relatively low-paying jobs. And then, when they found these burdens to be high after college, they hoped that politicians would let them off...

U.S. Treasury Secretary Janet Yellen on Sunday said she was working closely with banking regulators to respond to the collapse of Silicon Valley Bank and protect depositors, but said a major bailout was not being considered. -snip- "But we are concerned about depositors and are focused on trying to meet their needs," Yellen said.

The Federal Reserve on Sunday night announced that all those with money in collapsed Silicon Valley Bank will get their money back, as a second bank was revealed to have closed. The Federal Deposit Insurance Cooperation on Sunday held an auction of Silicon Valley Bank's assets, hoping to secure the bank before the market opened on Monday. CNN reported that no buyer was found. Shortly after, the Federal Reserve issued a statement saying they would step in. 'After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions...

Instead of a populace with a developed understanding of sin, and a prudent sense of what to punish and what to tolerate, we now have personal and social moral instability.Canceling Dr. Seuss is what a moral panic looks like. Unlike the stereotypical moral panic, in which ill-educated yokels whip themselves up into a frenzy of denunciation, today those with power and influence — journalists, educators, and suchlike — lead the way. At moral panics finding more and more evil to frantically purge, backwoods Baptists have nothing on The New York Times newsroom and students at elite universities. Canceling Harry Potter...

It’s not true, but if you ask Rep. Alexandria Ocasio-Cortez, D-N.Y., she’ll tell you conservatives don’t care about poor people. Ocasio-Cortez and her socialist cohorts such as Sen. Bernie Sanders, I-Vt., think any empathetic person has to support her laundry list of big government proposals — dubbed the “Green New Deal.” She’s called for nationalized healthcare, a federal jobs guarantee, and even “economic security” for those who are “unwilling to work.” But for the poor, Ocasio-Cortez’s plan is rife with unintended consequences. The big-government platform pushed by the emerging socialist Left would do more to set the poorest Americans back,...

New Jersey is potentially holding off hiking its income tax due to the possibility of the state and local tax deduction being eliminated in the GOP tax plan, according to the president of the New Jersey Senate. “I’m actually very concerned for the people of this state if this Trump tax happens, and I think we’re going to have to re-evaluate everything once that happens,” Senate President Steve Sweeney said Nov. 15 in reference to hiking the state’s tax rate on the highest earners from 8.97 percent to 10.75 percent. The Senate tax plan, which was voted out of the...

If conventional labor and finance capital have lost their scarcity value, then the era in which financialization reaped big profits is ending. Why is wealth/income inequality soaring? The easy answer is of course the infinite greed of Wall Street fat-cats and the politicos they buy/own. But greed can't be the only factor, for greed is hardly unknown in the bottom 90%. The only difference between the guy who took out a liar loan to buy a house he couldn't afford so he could flip it for a fat profit and the mortgage broker who instructed him on how to scam...

STIGLITZ: We Have To Throw Bankers In Jail Or The Economy Won't Recover George Washington, Washington's Blog | Nov. 4, 2010, 7:57 AM As economists such as William Black and James Galbraith have repeatedly said, we cannot solve the economic crisis unless we throw the criminals who committed fraud in jail. And Nobel prize winning economist George Akerlof has demonstrated that failure to punish white collar criminals – and instead bailing them out- creates incentives for more economic crimes and further destruction of the economy in the future. See this, this and this. Nobel prize winning economist Joseph Stiglitz just...

By Andrew Sheng 05.17.2010 10:40 Bankers Confirm Wall Street's Barbarianism Investment bankers bilked clients and grossly violated fiduciary trust in ways that deserve even deeper investigation A 1987 Hollywood movie called Wall Street featured Michael Douglas as Gordon Gecko, a rich, powerful and ruthless broker who teaches a young disciple that "greed is good." Coming out this summer will be a new film, Wall Street 2, also starring Michael Douglas. And we've been watching the real show recently from Washington. That's where Wall Street bankers defended themselves before the Senate Subcommittee on Investigations and the Financial Crisis Inquiry Committee. The...

When Chancellor Angela Merkel decided that Germany would pay part of Greece’s bills, voters punished her party in elections in Germany’s most populous state, North Rhine-Westphalia. How appropriate. The 1648 Peace of Westphalia, which ended the Thirty Years’ War, ratified Europe’s emerging system of nation-states. Since the end of the Thirty-One Years’ War (1914-1945), European elites have worked at neutering Europe’s nationalities. Greece’s debt crisis reveals this project’s intractable contradictions, and the fragility of Western Europe’s postwar social model — omniprovident welfare states lacking limiting principles. Greece represents a perverse aspiration — a society with (in the words of Wisconsin...

Senate Banking Committee Chairman Christopher Dodd, after spending some time negotiating with committee Republicans Bob Corker and Richard Shelby, has decided to advance major financial regulation legislation without bipartisan support. Democratic spin doctors will try to portray the fight over this legislation as a battle between Republicans favoring lax regulation of Wall Street and Democrats favoring tough regulation. But is the Dodd bill really tough legislation, particularly in its treatment of the major financial entities? My American Enterprise Institute colleague Peter Wallison argues that it is not, because it gives Too Big To Fail status to the big entities—Citigroup and...

China's latest worry: a local-debt mess Alan Wheatley, China Economics Editor - Analysis Mon Mar 15, 2010 11:39am EDT SHANGHAI (Reuters) - Shanghai unveils a $2.2 billion airport terminal on Tuesday, connected to the center of China's commercial hub by one of several new metro lines being built for the World Expo that opens in May. China The expansion is needed. The old terminal at Hongqiao airport, which mainly handles domestic flights, is hopelessly congested. A good case can also be made for a lot of the roads, railways and other transport links being forged thanks to the investment package...

Nicole Gelinas Supply-Side Financial Reform Congress should unleash free markets to help protect consumers. 8 March 2010 Senate Democrats have tried for weeks to get Republicans to support the showpiece of their financial-reform package, a consumer financial-protection agency that would shield regular Americans from predatory financiers. But even the nimblest public agency cannot protect consumers from the biggest threat to their financial health: owing too much money. That threat will exist as long as the financial industry faces no ultimate market penalty—the consistent threat of failure—for lending too much too freely. The proposed agency has a worthy goal. As Connecticut...

Angela Merkel, the German chancellor, mounted stiff resistance tonight to any swift bailout of Greece, as a rift opened up between European capitals over how best to tackle the risks posed to the euro. Despite a show of Franco-German unity on the crisis and the first statement from EU leaders pledging to safeguard the currency's stability, hopes on the markets of a German-led rescue plan to shore up Greece's critical public finances were dashed by Merkel, who repeatedly emphasised that Athens would need to put its own house in order and brushed aside all questions of financial support. "Germany is...

Citi plans crisis derivatives Author: Laurie Carver Source: Risk magazine | 08 Feb 2010 Categories: Derivatives Topics: Citi, hedging, liquidity crisis bankrupt Credit specialists at Citi are considering launching the first derivatives intended to pay out in the event of a financial crisis. The firm has drawn up plans for a tradable liquidity index, known as the CLX, on which products could be structured that allow buyers to hedge a spike in funding costs. Like the untraded US rates liquidity index (USRLI), the CLX is constructed as a sum of the Sharpe ratio – deviations from the mean divided by...

The only surprising aspect of this story is the fact that it still surprises people, including the New York Times, apparently. When Barack Obama announced a $75 billion program to have everyone else in the country subsidize foreclosure protection from homeowners who got themselves in over their heads, his allies hailed it as a compassionate program that would allow those who made poor decisions with their money a chance to avoid the normal consequences of those decisions. Now it appears that the program not only failed in its mission, but actually made the situation worse for those in danger of...

NICOLE GELINAS Global Finance’s State of Nature Ambitions for a new world order are no match for national interest. Sarkozy put pressure on us,” reports a nonplussed banker to a colleague in a recent French-newspaper cartoon, referring to the French president’s campaign against financial-industry bonuses. “And then what?” his colleague asks. “And then nothing,” is the reply. /snip National leaders are, in effect, competing over which country can offer its financial sector the most generous economic subsidy. This losing game ultimately hurts the financial sector—which needs market discipline to reward success and punish failure—and economic competitiveness as well. /snip Continuing...

Saturday, October 24, 2009 Gillian Tett: “Was October 2008 just a dress rehearsal?” /snip Second, she indicates that most observers recognize the rally is not the result of fundamentals (duh!) but the result of excessive liquidity chasing assets. /snip From Tett: Earlier this month, I received a sobering e-mail from a senior, recently-retired banker. This particular man, a veteran of the credit world, had just chatted with ex-colleagues who are still in the markets – and was feeling deeply shocked. “Forget about the events of the past 12 months … the punters are back punting as aggressively as ever,” he...

As Credit Crunch II looms, we must learn to escape risk of moral hazard For all those people belly aching about bank bonuses and dodgy mortgage lending in recent days, a speech by the Governor of the Bank of England addressing reform of the banking system ought to have been a highlight of the week. By Damian Reece Published: 9:57PM BST 20 Oct 2009 Comments 2 | Comment on this article But as Mervyn King told his Scottish business audience last night: "If our response to the crisis focuses only on the symptoms rather than the underlying causes of the...

There are a couple of things that you should know about if you have a queezy, "What-in-the-hell-are-these-idiots-doing-now?" feeling in the pit of your stomach about the so-called "second leg of the economic stool" (the mortgage rescue plan). The first features CNBC financial reporter Rick Santelli's self-described "rant" over his anger and rejection of Obama's mortgage bailout. As Larry Kudlow notes, Santelli said: Reporting from the Chicago commodity pits, my CNBC colleague Rick Santelli unleashed a torrent of criticism against this scheme. Santelli said: “Government is promoting bad behavior. . . . Do we really want to subsidize the losers’ mortgages?...