By William K. Black
(Cross posted at Benzinga.com)
The New York Times produces profiles of national leaders like Italy’s Mario Monti and Ecuador’s Rafael Correa. I invite readers to contrast the worshipful treatment accorded Monti with the Correa profile. The next time someone tells you the NYT is a “leftist” paper you can show them how far right it is on financial issues.
By William K. Black
(Cross Posted at Benzinga.com)
One of the distinctive features of banking in scores of developing nations is the very large spreads between the rate of interest they pay their depositors and the rate they charge borrowers. Academics have frequently focused on the exceptionally high spreads in Latin America in articles published over the last three decades. Economic theory predicts that these spreads should impose a major drag on development. The high interest rates charged to lenders should lead to very large “hurdle rates” for prospective borrowers’ projects. The two obvious implications of high hurdle rates, sometimes discussed in the literature, are that fewer worthwhile investments will be made by prospective entrepreneurs and more of the loans in Latin America are likely to go to high risk borrowers. High risk investments should be, if financial markets are efficient, more likely to produce higher returns exceeding the hurdle rate. The standard neo-classical economic assumption is that financial markets are efficient.
Posted in William K. Black
Tagged accounting control fraud, banksters, criminogenic environment, ecuador
Looking at the latest US data, business sentiment and capital spending have been eroding, and given the lagged impact of capex, that trend looks set to continue for the next few months. Against that, a number of consumer sentiment indicators remain upbeat and housing looks like it is in a firmly established uptrend, after a 5 year bear market. In fact, the existing home inventory to sales ratio is as low as it ever gets, and that is with still very depressed sales. If sales pick up further, given low inventories and with new housing starts still below the replacement rate, home prices could lurch forward.
Posted in Marshall Auerback
Tagged banksters, budget, economy, fiscal cliff, social safety net, Social Security
NEP’s William Black posted the following comment in response to Krugman’s Twinkie Manifesto post: Continue reading
William Black, by invitation of the President of Ecuador’s National Assembly, will present to the Standing Specialized Committee of Economic and Tax Regime in Quito, Ecuador on the banking crisis in that country.
Professor Black’s experience in financial regulation and his involvement in the US Savings and Loan Crisis puts him in a position to assist the Ecuadorians with their banking crisis.
Details are available in the following spanish language article.
By William K. Black
(Cross-posted at HuffingtonPost.com)
Third Way, lobbyists for and from Wall Street who are leading the effort to enrich Wall Street by privatizing Social Security, was created by Wall Street to fool some of the people all of the time. I have written previously to expose their fictional claims to be a moderate or liberal Democratic group. Continue reading
Posted in William K. Black
Tagged banksters, social safety net, Social Security, Third Way, wall street
By William K. Black
(Cross-posted at Benzinga.com)
Greetings from the Third Annual Kilkenomics Festival in Kilkenny, Ireland. The Irish bubble (as a percentage of GDP) was twice as large as the U.S. bubble. I’m returning to the U.S. to provide economic commentary for al Jazeera’s election night coverage. (Yes, I voted via absentee ballot.) Continue reading
I’ll get the obvious out of the way first and then turn in future columns to the aspects of the Department of Justice’s (DOJ) civil suit against Bank of America (B of A)/Countrywide that are vital to understand but are more subtle. The obvious issue arises from the facts that the DOJ alleges that its investigation has found. The complaint and the DOJ press release state that elite financial criminals committed tens of thousands of “brazen” frauds targeting U.S. government funds. Continue reading
By William K. Black
(Cross posted at Benzinga.com)
Two years ago, I wrote an article entitled “The Bank of England Sows the Seeds of the Next UK Crisis.”
I was not vain enough to believe that the British establishment would listen to my critique. The books authored recently by Jeff Connaughton, Neil Barofsky, and Sheila Bair have made clear that the dominant strategy of the Bush and Obama administrations has been providing aid and comfort to the banksters who drove the crisis rather than holding them accountable for their crimes. The Brits are following the same dominant strategy.
Posted in William K. Black
Tagged accounting control fraud, bank regulation, banksters, Control Fraud, criminogenic
Jeff Connaughton has just authored a major insider account revealing and explaining the failure of the politicians and regulators to hold the banksters who drove the financial crisis accountable and to remove the most obvious risks of future crises. On Sunday, October 21, 2012, UMKC’s Bill Black hosted a book salon on Firedoglake with Jeff Connaughton. With Connaughton’s permission, we are cross-posting his introductory post (which explains how he came to write the book) and Bill Black’s review of his book.
Posted in William K. Black
Tagged banksters, Financial crisis, Jeff Connaughton, The Payoff
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