Culture of Life News Fri 2010-03-12 07:51 EST

Toyota Tears Of Regret

Elaine Supkis

Toyota decided long ago during the push to force Japan to open the doors to imports from the US to balance Toyota exports to the US, that they would colonize the US by opening factories here. This allowed them to pocket all the profits while keeping the door open to selling 2-4 million cars every year in the US. This clever move paid off quite handsomely and now many Americans think Toyota is benign and not a major, major cause of the capital drain as well as job drain in the US.

Culture; Life News; regrets; Toyota Tears.

naked capitalism Fri 2010-02-05 11:06 EST

FDIC Proposes Tough-Minded Securitization Reforms; Industry Howls

...the FDIC presented a cogent and tough-minded plan for securtization reform at the American Securitization Forum...The driving element is that the FDIC is proposing to change the requirements for a securitization to be treated as a true sale, meaning that when the originator sells the mortgages to a securitization vehicle (say a trust), the investors in that vehicle cannot go back to the originator for recourse...The FDIC included various proposals to insure transparency for investors, including a requirement that all deals be arms length, to third party investors (no affiliates or insiders). They would exclude derivatives (excluding interest rate swaps) and would not permit re-securitizations...a clever effect of this proposal was that it solved the problem of ``what to do with rating agencies'' by making them irrelevant

FDIC Proposes Tough-Minded Securitization Reforms; Industry Howls; naked capitalism.

zero hedge Tue 2009-11-03 19:57 EST

Guest Post: Systemic Risk is All About Innovation and Incentives: Ed Kane

Edward J. Kane vi Chris Whalen

...we present the views of our friend and mentor Ed Kane of Boston College, who argues that the problem with the financial regulatory framework is not the law, regulation nor even the regulators, but rather the confluence of poorly aligned incentives and financial innovation... The financial crisis of 2007-2009 is the product of a regulation-induced short-cutting and near elimination of private counterparty incentives to perform adequate due diligence along the chain of transactions traversed in securitizing and re-securitizing risky loans (Kane, 2009a). The GLBA [Gramm-Leach-Bliley Financial Modernization Act of 1999] did make it easier for institutions to make themselves more difficult to fail and unwind. But it did not cause due-diligence incentives to break down in lending and securitization, nor did it cause borrowers and lenders to overleverage themselves. Still, the three phenomena share a common cause. Excessive risk-taking, regulation-induced innovation, and the lobbying pressure that led to the GLBA trace to subsidies to risk-taking that are protected by the political and economic challenges of monitoring and policing the safety-net consequences of regulation-induced innovation. These challenges and the limited liability that their stockholders and counterparties enjoy make it easy for clever managers of large institutions to extract implicit subsidies to leveraged risk-taking from national safety nets (Kane, 2009b)...To reduce the threat of future crises, the pressing task is not to rework bureaucratic patterns of financial regulation, but to repair defects in the incentive structure under which private and government supervisors manage a nation's financial safety net.

Ed Kane; Guest Post; incentives; innovation; systemic risk; Zero Hedge.

Jesse's Café Américain Fri 2009-10-23 09:53 EDT

The US Needs to Get Less Competitive

Jesse

The hobgoblin that is often used by the Wall Street banks is that if this or that reform is introduced, it will lessen their competitiveness, and their craftiest and most clever employees will leave the country to work for foreign banks. Is that supposed to be a threat? That sounds like a plan. And let them deduct the price of a one way coach class ticket... It is time for a real change, in most cases bringing back what was taken apart over the past twenty years...[jesse's reform proposals]

competitions; Jesse's Café Américain; needed.

Thu 2007-10-18 00:00 EDT

Mish's Global Economic Trend Analysis: Why does fiat money seemingly work ?

by "Trotsky"; money history; inflation "cleverly disguised tax"; currency debasement irresistable to ruling class

fiat money seemingly work; Mish's Global Economic Trend Analysis.