Anti-Union Ads in Chicago Paid for By Hedge Funds, Billionaires

By: Wednesday September 19, 2012 6:30 am

Apparently the above anti-union ad played non-stop on television in Chicago throughout the strike. It’s the product of Education Reform Now, a group that also sometimes goes by Democrats for Education Reform, depending on what pot of money they want to use. Formed in 2005, Education Reform Now has spent millions of dollars over the past few years, whether massaging public opinion or lobbying state legislatures or intervening in school board races.

 

The Worst Idea in the World: Securitizing Rental Revenue

By: Sunday August 26, 2012 1:00 pm

The last financial crisis can be blamed in large part on runaway securitization. Wall Street giants sliced and diced mortgage loans into bonds that they sold around the world. They claimed that they diversified the mortgage pools so that even a few defaults would not undermine the value of the securities, and they offered tranches of the bonds at a decent yield. As global demand increased for the securities, Wall Street pressured originators to close more and more loans, regardless of creditworthiness. This caused a bubble in prices. Moreover, financial innovators took the lower-tranche loans and cut them up into once-removed securities, making bets on bets on the housing market that were allegedly “safe”. We all know how this ended, and how the securitization bubble took a crash in housing prices and made it exponentially worse.

So now we’re poised to do that all over again.

Housing Recovery Narrative Surges Forward, But Reasons for Price Rise More Sinister

By: Wednesday August 8, 2012 8:45 am

The “housing is back” narrative got another boost with a story in the Wall Street Journal that simultaneously makes an unequivocal statement about home prices, and then acknowledges wild variance in the data set.

Adventures in Corporate PR: JPMorgan Chase About to Pull Off Fail Whale Bait and Switch

By: Wednesday July 11, 2012 10:37 am

Here’s a classic example of how corporations manage expectations. A couple weeks ago, on the same day as the Supreme Court ruling on the Affordable Care Act, the New York Times reported that JPMorgan Chase’s losses from the Fail Whale trades could reach as high as $9 billion. Their sources were “people who have been briefed on the situation.” I wrote at the time that “I could see how the PR strategy would be to leak a high number and back into the lower (but still awful) one, and taking that as a ‘win’ in the markets.”

Dimon to Be Contrite Yet Steadfast in Senate Banking Testimony

By: Wednesday June 13, 2012 6:45 am

JP Morgan Chase CEO Jamie Dimon faces the Senate Banking Committee in a two-hour hearing scheduled for 10am ET today. He’ll be the only witness. Keep in mind that Dimon’s JPMorgan Chase has given millions to top-ranking members of the Banking Committee, so anything more than headline-grabbing and grandstanding without a real challenge to Dimon in the wake of the Fail Whale trades would be a bit of a surprise. I discuss his released testimony here and will be covering the hearing.

Hedge Fund Gambling: Fine, Just Keep My Tax Dollars Out of It

By: Monday May 28, 2012 2:55 pm

I don’t have problems with hedge funds per se; I object to the use of the implicit too big to fail guarantee, the Fed’s discount window, political influence, inside information, rigged rules and virtually unlimited depositor funds that go along with any trader at a bank who tries to play this game. The idea that a victory will send profits to the bank balance sheet, but a loss will simply get socialized by the government, turns the idea of risk completely on its head.

Happy Talk on Housing and Mortgages Masks Dangers

By: Thursday May 24, 2012 6:00 am

Over the last several months, analysts have become invested in the narrative of a recovery in housing, hyping positive data and downplaying either negative data or the explanations that temper the good news (the large amounts of uncounted shadow inventory, for example). This pervasive talk feels a lot like the bubble years, only we’re now talking about how the bottom for housing has been reached instead of marveling that prices will never go down again. And it’s led to a pernicious outcome – the selling off of housing stock to large investment groups who plan to rent it out.

There’s nothing inherently wrong with that, nor is it surprising. Rich investors were always going to buy up low-end housing stock if they felt it was undervalued.

The Problem at JPMorgan Chase: The Hedge Fund Inside the Bank

By: Wednesday May 16, 2012 5:45 pm

Bruno Iskil, the infamous “London Whale,” will leave JPMorgan Chase in the wake of his soured “Fail Whale” trades which lost the bank $2 billion to date. Experts are pointing out the dangers of allowing a casino-like hedge funds inside a federal insured bank.

Sen. Merkley Speaks Out on the Volcker Rule and the Fail Whale Trade

By: Tuesday May 15, 2012 4:22 pm

In addition to asking Jeff Merkley about filibuster reform, I sought his reaction to the Fail Whale trades that have racked up massive losses at JPMorgan Chase. Merkley, along with Carl Levin, authored the Volcker rule, the ban on most types of proprietary trading, that made its way into the Dodd-Frank financial reform bill. There has been a lot of slippage on the rules, however, once they left Congress and made their way through the regulatory gauntlet.

Sheila Bair’s Fabulous Idea: $10 Million Loans for Everyone!

By: Sunday April 15, 2012 12:55 pm

Yes, former Chair Bair is speaking very satirically — her proposal is actually a Swiftian attack on the ways that the Wall Streeters were and are allowed to profit from our misery — but really, is it any worse than what has actually been done in the name of shoring up capitalism?

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