Chinese Communists and Wacko U.S. Right Want to Save us from Effete Males

William K. Black
February 7, 2016     Bloomington, MN

The New York Times has produced a wonderful, unintended, juxtaposition in their pages on February 6, 2016.  Two articles report on think tanks calling for the government to engage in right-wing propaganda campaigns to restore “manly” men.  One article discusses the Chinese think tanks that have convinced the (Communist) government to engage in a massive propaganda campaign.

Worried that a shortage of male teachers has produced a generation of timid, self-centered and effeminate boys, Chinese educators are working to reinforce traditional gender roles and values in the classroom.

This is how the article begins:

FUZHOU, China — The history class began with a lesson on being manly.

Lin Wei, 27, one of a handful of male sixth-grade teachers at a primary school here, has made a habit of telling stories about warlords who threw witches into rivers and soldiers who outsmarted Japanese troops. “Men have special duties,” he said. “They have to be brave, protect women and take responsibility for wrongdoing.”

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Money and Banking – Part 5

By Eric Tymoigne

Previous posts studied the balance sheet of the fed, definitions and relation to the balance sheet of the fed, and monetary-policy implementation. In this post, I will answer some FAQs about monetary policy and central banking. Each of them can be read independently.

Q1: Does the Fed target/control/set the quantity of reserves and the quantity of money?

The Fed does not set the quantity of reserves and does not control the money supply (M1). It sets the cost of reserves; that’s it.

In terms of reserves, the Fed was created to provide an “elastic currency,” i.e. to provide monetary base according to the needs of the economic system in normal times and panic times. It would be against this purpose to implement monetary policy by unilaterally setting the monetary base without any regards for the daily needs of the economy system.

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Guest Post: POSITIVE MONEY IN ACTION

By Geoffrey Gardiner

Jurists have demonstrated that every right must have a corresponding duty, or it is worthless.

The same is true of financial assets: for every creditor there has to be a debtor.

Money is assignable debt. The debt should be negotiable, that is it can be transferred to another owner without reference to the knowledge of the debtor.

There are primary debt and secondary debt. An example of primary debt is when a borrower draws down a bank loan by making a payment to someone. That someone pays the money received into a bank account, thus creating the credit which finances the loan. New money has been created.

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Did Financial Giant Goldman Sachs Just Admit the System is Rigged?

Bill Black explains why one of world’s largest investment firms Goldman Sachs is questioning the “efficacy of capitalism” and why its CEO is terrified of a Sanders presidency. You can view it here on the Real News (include transcript).

 

Hillary, the Banksters Committed “Fraud” not “Shenanigans”

William K. Black
February 4, 2016     Bloomington, MN

Former Secretary of State Hillary Clinton, in her debate with Senator Sanders minutes ago, said that she went to Wall Street and told them to stop their “shenanigans.”  The context was that she was being asked to respond to the complaint that she was too close to on Wall Street billionaires.  She had every incentive, therefore, to demonstrate how tough she would be on Wall Street.  In that context, the best she could muster was the pusillanimous “shenanigans.”  Here is a typical definition of that word with examples.

  1. : a devious trick used especially for an underhand purpose
  2. 2a:  tricky or questionable practices or conduct —usually used in pluralb :  high-spirited or mischievous activity —usually used in plural

Examples of shenanigan

  1. students engaging in youthful shenaniganson the last day of school
  2. an act of vandalism that went way beyond the usual shenanigansat summer camp

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Liar’s Loans, Plus Loan Brokers, Equals Fraud Heaven

William K. Black
February 4, 2016     Bloomington, MN

This is the fourth part of my series on the lies about “liar’s” loans that suffuse the Wall Street Journal article reporting that “big money managers” want to bring back “liar’s loans.”  This part focuses on the fact, which the WSJ treated as so obviously reasonable that it was unworthy of analysis, that:

Money managers want to bankroll the loans while relying on the mortgage firms to handle the process with borrowers, basically acting as a lender, “one step removed from the process,” one of these people said.

When the real lender taking the risk of making the home loan employs an agent from a separate for-profit firm to actually recruit the borrowers in return for receiving a sales commission from the real lender (the “big money managers”) we call that agent a loan broker.  The “big money manager’s” plan is (a) to make loans that are endemically fraudulent, (b) by incentivizing de facto loan brokers to find the buyers and handle the loan applications.

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Sanders vs Clinton on Wall St Reform

NEP’s Bill Black and Roosevelt Institute Fellow Mike Konczal take on the policies of the two contenders for the Democratic nomination in this appearance of The Real News. Getting the message out about Bank Whistleblowers United! You can view here (includes transcript).

Reviews of Why Minsky Matters

Below are links to a couple of reviews of Randy Wray’s latest book – Why Minsky Matters: An introduction to the work of a maverick economist.

What Would Minsky Do Now? A review by Laurence B. Siegel at ValueWalk

A review by William J. Bernstein for CFA Pubs.

Better Bankers Symposium

The Quest for Better Bankers, Better Banks Requires Better Economists

Review by William K. Black

[This review originally appeared in Concurring Opinions]

In Better Bankers, Better Banks, Claire Hill and Richard Painter of the University of Minnesota Law School signal their approach in the subtitle:  “Promoting Good Business through Contractual Commitment.”  This review explains why their thesis is so timely in terms of the most important theoretical debates boiling in economics and banking regulatory policy and the severe degradation of bankers and banks over the last 30 years.  Contractual commitment was, of course, the heart of Dr. Oliver Williamson’s approach to explaining modern capitalism.  Williamson, in work that led to being made a Nobel Laureate in Economics, argued that corporations were not simply a “nexus of contracts,” but also that these contracts had evolved to suppress the enormous danger to commerce posed by the powerful incentive of profit-maximizing actors to engage in “opportunistic behavior” whenever “information” was “asymmetrical.”  In The Economics Institutions of Capitalism, Williamson defined opportunistic behavior broadly and starkly as “self-interest seeking with guile.”

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How long did it take for the WSJ to Lie about Liar’s Loans? Two Sentences

William K. Black
February 3, 2016      Bloomington, MN

This is the third column in my series about the Wall Street Journal report that “big money managers” want to bring back “liar’s loans.”  Here are the article’s first two sentences.

Wall Street wants to bring back the “low-doc” loan.

These mortgages, which are given to borrowers that can’t fully document their income, helped fuel a tidal wave of defaults during the housing crisis and subsequently fell out of favor.

The second sentence begins the lies with an important lie.  “Low-doc” is a euphemism for endemically fraudulent “liar’s” loans.  The second sentence repeats a lie that the fraudulent lenders have told for decades – it is their carefully crafted creation myth of liar’s loans.  If the WSJ had done its job and exposed the lie, the creation myth and the fraud scheme would have died decades ago.  Instead, the WSJ endorses the lie.  Liar’s loans were not designed for or “given to borrowers that can’t fully document their income.”  The two keys lies by the fraudulent lenders about liar’s loans arise from their use of the word “can’t.”  As I explained in my second column in this series, the IRS created, decades ago, Form 4506-T, which allows the borrower to give the lender access to transcripts of the borrower’s two most recent tax returns.  This means that the self-employed can easily and cheaply permit the lender to verify their income – and home lenders routinely require borrowers to sign the 4506-T as a mandatory part of the loan application.  The first lie is that there are borrowers that are incapable (“can’t”) document their (purportedly ample) income.

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