In the Letter to Mr. Baxter, I touched upon the legality of the Fed’s bailout of AIG. The bill currently stands at $182 billion. Because AIG is a financial institution and the Fed, in the popular understanding of its function, “deals” with money and financial institutions, the matter, when noticed at all, has been given …
The Meaning of “System” in Systemic Risk – Part 2: Breakdown of the Law Read More »
In the past three years, I have looked high and I have looked low, but never – not once – have I seen even a hint of a reference to the conscious, premeditated and deliberate destruction of Fannie Mae and Freddie Mac that set the stage for the ongoing crisis. Everyone was involved in the …
Parsing the Categories of Necessary and Accidental By Means of Mortgages Read More »
Today’s New York Times reported that “Payday loans get exemptions in Senate bill”. No surprise there. That was/is par for the course. Just a few comments on the subject: In a payday loan, you receive an immediate cash loan against your employment paycheck. The rate, according to the Times, is generally around 400%. But if …
The U.S. Senate Exempts Payday Loans from Regulation Read More »
Michael Foot, the British Labor leader, died past Wednesday at the age of 96. Gordon Brown half-praised him as a “genuine British radical [who] possessed a powerful sense of community”. Reading the obituaries, I came upon this picture of him with a young protégé. Yep, that’s Tony Blair on the left. The year was 1982. …
The Meaning of “System” in Systemic Risk – Part 1: Blair’s Morality Play Read More »
Bloomberg reported that Bernie Madoff’s daughter-in law, Stephanie, has filed a formal request to have her surname, and those of his two children, Audrey and Nicholas, legally changed to Morgan. My compliments to Stephanie, not so much for the move itself but for the choice of the name. In preserving the family’s ties to finance, …
The social problems are difficult to solve because they are social. Each problem is related to a slew of others that, combined, comprise the social system in its entirety. Take the topical issue of health care in the U.S. Why are there about 50 million people without health insurance? The answer is cost. People have …
Dear Mr. Baxter, I just read your testimony before the House committee investigating the financial crisis. You delivered a long, carefully prepared text to defend the Fed’s bailout of AIG. As the executive VP and general counsel of the New York Fed, nothing less was expected from you. Did I get your approach, your strategy, …
The Appeal of the Walking Man generated heavy email feedback. If this were a commercial site, responding to the “customer demand”, it would have to be renamed Dialectics of Art. But it is not. More to the point, the dialectics of finance is the starting point of making sense of art, so we are on …
The sale of Giacometti’s Walking Man I for a record $104 million was the main “art” news of the past week. The picture of the sculpture made the front page of the major papers, including the Wall Street Journal. Tout le monde was talking about it. So many that I did not know the art …
If you have been following current events, you are familiar with President Obama’s plan to “take on” banks. His plan, inspired by Paul Volker, calls for, among other things, the banning of proprietary trading by banks. If you have been following this blog, you know that proprietary or prop trading is arbitrage trading – taking …