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HomeSense on Cents Endorses Elizabeth Warren for Consumer Financial Protection Agency
Posted by Larry Doyle on July 17th, 2010 11:20 AM |
Elizabeth Warren
Truth, transparency, and integrity!
If our nation is to have any chance to recover from the throes of the worst economic crisis since the 1930s, it had better start elevating and embracing these aforementioned virtues. Time and time again, when we review business practices and political decisions at the center of our crisis, we have seen a glaring lack of these prized virtues. Why and how were these principles compromised? The pursuit of short term profit. Regrettably, this pursuit came at the expense — if not total violation — of these principles. The ultimate long term costs are now being borne by the nation as a whole.
Sense on Cents abhors those who would compromise these core values. Similarly, Sense on Cents embraces those who cherish these values. To that end, I strongly endorse Elizabeth Warren to head the Consumer Financial Protection Agency. (more…)
Should AIG Units Be Placed into Bankruptcy?
Posted by Larry Doyle on May 26th, 2010 3:17 PM |
Our financial regulators, government officials, and central bankers may believe the shell game being played with AIG might work to lure buyers into the AIG den but the fact is AIG remains the institutional equivalent of ’dead man walking.’
Who gets that and is not reluctant to speak her mind? Tarp watchdog and consumer advocate Elizabeth Warren. Her courage on this topic is on display today while AIG chairman Robert Benmosche would like to continue to shuffle the shells around in an attempt to continue to play the game. (more…)
The Muammar Gaddafi of Regulation
Posted by Larry Doyle on May 26th, 2010 9:14 AM |
Does anybody still read Time magazine?
I would expect that Time is likely now relegated to 9th grade Civics classrooms given the depth of reporting embodied in the recent cover article, The New Sheriffs of Wall Street.
If Time would like to be considered a serious publication, they should dig a little deeper prior to reporting this sort of powder puff commentary. Time rightfully does address the fact that Wall Street has been a bastion of male domination. Additionally, they pay proper respect to FDIC Chair Sheila Bair and Tarp watchdog and consumer advocate Elizabeth Warren, but they fall woefully short in their characterization and review of SEC Chair Mary Schapiro.
In this article, Schapiro would clearly like to portray herself as tough as nails on Wall Street while protecting the interests of investors. As Time highlights: (more…)
No Quarter Radio’s Sense on Cents with Larry Doyle Welcomes 13 Bankers Co-Author James Kwak, Tonight at 8pm ET
Posted by Larry Doyle on April 11th, 2010 7:08 AM |
UPDATE: This episode of NQR’s Sense on Cents with Larry Doyle has concluded. You can listen to a recording of the episode in its entirety by clicking the play button on the audio player provided below. Once the audio begins, you can advance or rewind to any portion of the episode by clicking at any point along the play bar.
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I am thrilled to have James Kwak join me this evening, April 11th, from 8-9pm ET on No Quarter Radio’s Sense on Cents with Larry Doyle.
If Wall Street banks are ‘too big to fail,’ what is America to do? While those on Wall Street fight to maintain their power base and those in Washington deal with their conflicted interests between Wall Street and Main Street, two individuals lay out a very simple solution.
Simon Johnson and James Kwak convincingly answer that if banks are in fact ‘too big to fail,’ then ‘make them smaller.’ Johnson and Kwak highlight this reality and so much more in 13 Bankers: The Wall Street Takeover and the Next Financial Meltdown, a book that was just released but will surely sweep the country. The reviews so far are off the charts. Kwak and Johnson are widely followed at their site Baseline Scenario, which, in my opinion, is the most well written and informative financial and economic website in the blogosphere. (Sense on Cents being a close second!!)
What are people saying about 13 Bankers? Well, let’s stop and start with Elizabeth Warren, Professor of Law Harvard Law School and Chair, TARP Congressional Oversight Panel. She writes:
“The best explanation yet for how the smart guys on Wall Street led us to the brink of collapse. In the process, Johnson and Kwak demystify our financial system, stripping it down to expose the ruthless power grab that lies at its center.”
My interview with James Kwak this evening is a can’t miss. Please spread the word to friends and colleagues. Listen to the show LIVE at the BlogTalkRadio website. Share your thoughts and questions by calling (347) 677-0792, or mix it up in the chat room with an always energized group. As a reminder, all of my radio shows are archived and previous episodes can be listened to right here at Sense on Cents by clicking on the No Quarter Radio tab. (FYI, I keep an audio player of my most recent episode in the right sidebar). In addition, all No Quarter Radio programming is available as a free podcast on iTunes. From the iTunes Store, type “NQR podcasts” in the search window.
LD
Treasury’s Herb Allison Needs a Truth Enema
Posted by Larry Doyle on March 4th, 2010 12:33 PM |
According to testimony this morning from Treasury official Herb Allison, currently charged with overseeing the management of the TARP, there are no financial firms now guaranteed as ‘too big to fail.’
What rock did Herb just crawl out from?
The Wall Street Journal addresses Herb’s ridiculous comment in writing, Treasury Official: ‘No Too Big to Fail Guarantee’ for Big Financial Firms:
There is no U.S. government guarantee to protect the largest financial firms, a Treasury Department official said Thursday, as a congressional watchdog criticized the $45 billion in government aid provided to Citigroup Inc. (more…)
Elizabeth Warren Calls for New Bank Stress Tests
Posted by Larry Doyle on February 11th, 2010 9:34 AM |
The initial Bank Stress Tests run by Treasury Secretary Geithner were largely a sham. I questioned as much last April in writing, “Bank Stress Tests: Major Sham?”:
As with any test, the results are only meaningful if the process and proctor have unquestioned integrity. The proctors for the Bank Stress Test are none other than Treasury Secretary Tim Geithner and Fed chair Ben Bernanke. Why is a testing authority of the magnitude of FDIC, led by Sheila Bair, not more involved in the process? Ms. Bair is the one individual in our country with the greatest level of interaction with and understanding of the student body, that being the banking industry as a whole and individual banks specifically.
What does the FDIC, led by Ms. Bair, have to say about the upcoming Bank Stress Tests? The New York Post provides a CHILLING perspective: (more…)
Elizabeth Warren Exposes Jamie Dimon
Posted by Larry Doyle on February 9th, 2010 8:37 AM |
Elizabeth Warren and Jamie Dimon
How is it that some people are able to aggressively promote the virtues of truth, transparency, and integrity within our financial system while others would seem to talk a good game but do not truly walk the walk? The key, in my mind, is that the former are not beholden to a constituency focused on short term maximization of profits and revenues. Who is distinguishing herself as a leader in this category? Elizabeth Warren, the current chair of the Congressional Oversight Panel to investigate the U.S. banking bailout.
Warren writes in today’s Wall Street Journal of Wall Street’s Race to the Bottom. This race is very much a function of implementing strategies and developing products that have served to maximize the short term revenues of these firms, while eroding the very foundation of the financial system itself. (more…)
Elizabeth Warren Highlights Washington’s Losing Battle on Housing
Posted by Larry Doyle on October 9th, 2009 9:21 AM |
Who in Washington will give you a straight answer? Elizabeth Warren.
Who is Elizabeth Warren? Her Wikipedia bio reads:
Elizabeth Warren
Elizabeth Warren (born 1949) is the Leo Gottlieb Professor of Law at Harvard Law School, where she teaches contract law, bankruptcy, and commercial law. In the wake of the 2008-9 financial crisis, she has also become the chair of the Congressional Oversight Panel created to oversee the U.S. banking bailout, formally known as the Troubled Assets Relief Program. In 2007, she first developed the idea to create a new Consumer Financial Protection Agency, which President Barack Obama, Christopher Dodd, and Barney Frank are now advocating as part of their financial regulatory reform proposals.
In May 2009, Warren was named one of Time Magazine’s 100 Most Influential People in the World.
Ms. Warren consistently takes no prisoners or provides no pandering in making honest assessments of the interaction between Washington and Wall Street. She has called the banks on the carpet. She has called Secretary Geithner on the carpet. She has called Congress on the carpet. Why? A general lack of honesty, integrity, and transparency in dealing with the American public.
When she speaks, I listen.
What did she have to say this morning? In commenting on a recently released report on the effectiveness of government programs to support housing, Warren questioned the scalability and the permanence of the impact of the TARP funding. Bloomberg provides further color in writing TARP Oversight Group Says Treasury Mortgage Plan Not Effective. The report highlights:
“Rising unemployment, generally flat or even falling home prices and impending mortgage-rate resets threaten to cast millions more out of their homes,” the report said. “The panel urges Treasury to reconsider the scope, scalability and permanence of the programs designed to minimize the economic impact of foreclosures and consider whether new programs or program enhancements could be adopted.”
New programs or program enhancements? Yesterday I opined “Washington Needs a New Housing Model” and wrote:
While the administration swims upstream on this issue, bank policy of tight credit and restrictive lending only further exacerbates the housing market. Make no mistake, though, banks are taking that approach to tight credit at the behest of regulators who know the level of losses in the banking system and are trying to preserve the industry as a whole.
I like a rallying equity market as much as anybody, but I wouldn’t spend any paper gains just yet. Why? The new housing model is displaying that:
“As defaults become more common, the social stigma attached with defaulting will likely be reduced, especially if there continues to be few repercussions for people who walk away from their loans,” concluded Sapienza. “This has an adverse effect on homeowners who do pay their mortgages, and the after-effects of more defaults and more price collapse could be economic catastrophe.”
This model needs some quick-dry crazy glue, which could only be applied in the form of a serious principal reduction program. Banks would take immediate and massive hits to capital which they clearly won’t accept.
So how can we generate some support for housing?
Aside from a principal reduction program, the penalty for those who would strategically default on their mortgage needs to be far more onerous.
The principal reduction would negatively impact bank earnings. Too bad. The banks are currently feeding at the taxpayer trough and would not be here without the bailouts. The individuals who are capable of making their payments need to accept the moral responsibility that is embedded in a contract.
Given the massive violation of moral hazards and breaking of contracts by Uncle Sam, that old man does not have a lot of credibility on that front.
What do we really learn here? Ultimately, the market is the market and efforts to manipulate or support a falling market will only be temporary. The market needs to find the clearing level where private money will purchase properties. That private money will wait while Uncle Sam continues to try to prop the market.
In the meantime, do not expect any meaningful support for housing.
LD
