rcwhalen's blog

The Volcker Rule ignores the most basic and elementary facts about bank risk taking in the financial markets and must hurt overall liquidity among financial intermediaries and investors. 

Until the Congress rectifies the current bankruptcy laws and allows trustees to claw back payments made to secured lenders and other counterparties, there is no reason for any rational personal to allow a broker dealer to hold securities in custody.

Minxin Pei, the most original of current Sinologists, makes the point authoritarian/totalitarian regimes inherently prioritize requirements for protecting regime leaders over long-term national interest.

During my tenure as Fannie Mae’s senior vice president for marketing, I warned NPA that any effort by Fannie Mae to launch a massive national affordable housing program would be as disastrous for homebuyers and neighborhoods as FHA’s failed efforts were in the 1960s and 1970s. 

Had to cross post this discussion with my brother Michael Whalen from The Institutional Risk Analyst. The past articles in The IRA require a $99/yr subscription, but the most recent is free. 

Also note link to comment by Barry Ritholtz on The Big Picture re: the Facebook IPO.  Actually Goldman Sachs led the covert IPO and hype festival last year, but the folks at the SEC and FINRA were sound asleep.  

Chris

Isn’t it meaningless to look at the inverse floaters in isolation? To assess risk, shouldn’t we look at the entire portfolio held by Freddie Mac?

Not only is the large bank-GSE cartel preventing millions of Americans from refinancing, but these same cartel players are also thwarting Fed monetary policy and hurting all our economic prospects.

My favorite football introductory book is an out-of-print book by Joe Namath, FOOTBALL for Young Players and Parents.  You may enjoy my favorite lines as you get in the mood for the Super Bowl

This morning, NPR and ProPublica, began reporting on financial transactions at Freddie Mac that bet against homeowner refinancing with their portfolio.

Indeed,under US securities law and FINRA rules, it is unlawful and a violation of professional ethics for a registered person or investment advisor to guarantee investment results for any client.

On Friday the FDIC reminded us that the banking crisis continues, closing and selling several institutions in arranged transactions.   This may seem gloomy news, but please note that the shareholders of the acquiring institutions just made a lot of money.

But those Shanghai office towers across the river in Pudong were already standing empty a decade ago – not that you would know from any contemporary reporting. Former Prime Minister Rhu Rongji publicly pleaded with provincial bureaucrats to stop fabricating figures because it made it impossible for him to know what was going on.

I continue to believe that the large difference between the valuation of WFC and C is actually about right and is a function of the high-risk business model at C.  Say what you want about the piles of cash, Dick Bove, C has a gross yield on lending assets that is more than 350bp above the industry average, a function of a subprime internal default target for the average customer.  This is a deliberate business model choice and one that, frankly, makes it hard for me to justify buying C. 

Pres. Barack Obama has launched new international diplomatic poker with “a trailing hand”. It is impossible to exaggerate the forces at play, economic as well as political, foreign and domestic, and their interplay.

Analyst surveys have now risen to the level of fact, as we all know.  Thus Bloomberg and other news outlets feature detailed reports about the opinions of the Sell Side community as though these musings were burned into stone tablets with the fire of the Holy Spirit.