Tag Archive: Money

In August, the Justice Department announced a $16.65 billion settlement with Bank of America over the fraudulent sale of mortgage-backed securities (in reality, the cost to the bank is significantly lower). But two months later, one small part of the settlement has not been finalized in federal court: a $135.84 million cash distribution to the Securities and Exchange Commission. The reason for the holdup could raise the stakes for financial institutions that commit fraud, and over time stabilize the system as a whole, simply because two SEC commissioners have dared to try to maintain the consequences for misconduct.

Under current SEC rules, financial firms that settle fraud investigations automatically incur a number of additional penalties. Many of these mandatory actions date back to the creation of the SEC during the Great Depression. The SEC can ban institutions from managing mutual funds, prevent them from working with private companies to find investors, and force SEC approval for any stocks or bonds that the firm issues on its own behalf. These penalties and disqualifications cut into profits, and in many ways can be as damaging as the settlements themselves. [Read more]

http://wp.me/p4sUqu-SA – Michael’s Blog


One thing to be said for the women now heading the Federal Reserve and the IMF: compared to some of their predecessors, they are refreshingly honest. The Wall Street Journal reported on July 2nd:

Two of the world’s most powerful women of finance sat down for a lengthy discussion Wednesday on the future of monetary policy in a post-crisis world: U.S. Federal Reserve Chairwoman Janet Yellen and International Monetary Fund Managing Director Christine Lagarde. Before a veritable who’s-who in international economics packing the IMF’s largest conference hall, the two covered all the hottest topics in debate among the world’s central bankers, financiers and economists.

Among those hot topics was the runaway shadow banking system, defined by Investopedia as “The financial intermediaries involved in facilitating the creation of credit across the global financial system, but whose members are not subject to regulatory oversight. The shadow banking system also refers to unregulated activities by regulated institutions.” Examples given include hedge funds, derivatives and credit default swaps. [Read more]

http://wp.me/p4sUqu-j2 – Michael’s Blog

National emblem of the People's Republic of China


BEIJING — Lavish weddings, fancy holidays and lunchtime wine on the public dime were among transgressions detailed Tuesday that led China’s ruling Communist Party to discipline 2,290 officials so far this year in a frugality campaign aimed at addressing public anger.

The party’s disciplinary arm, quoted in official state media, provided eight examples of such breaches, including a party chief in a township in Hebei who was stripped of his post for holding an extravagant wedding for his daughter and receiving around 1 million yuan ($163,000) in cash and gifts. [Read the full article]





Exports are considered to be the driving force in booming economies. Yet, by focusing too much on growth from outside, economies neglect their most important market: the domestic one.

Somehow mainstream economic theory cannot move past the 2000s: “competitiveness to boost exports” is still the mantra. The advice to crisis-ridden countries is always the same: reform to reduce labor costs, make credit easier, open your doors to trade, and the path to economic happiness will be all yours. You will always find a market for your production goods – be they fancy cars with a German name or tasty delights from countries sunny enough to grow olives – and eventually you will win a second term in office. [Read the full article]


Admittedly, a couple of weeks ago I would have been “somewhat surprised”  In the post-PRISM-revelations era now…I am not. We had to learn that what Obama says and what the US actually does can be quite different…

Al Jazeera English: Exclusive: US bankrolled anti-Morsi activists. http://goo.gl/mag/LJH7aM4

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