Consider taking an exam without clear guidelines on what will be assessed. Many students have likely experienced this situation at least once, resonating with the frustration of preparing for an evaluation with unknown criteria. Now, imagine this teacher lacked the expertise to even grade such an exam effectively in the first place. This scenario illustrates […]
Maybe It’s Time We ‘Stress Test’ the Federal Reserve? Read More »
To this day it’s said that mark-to-market (MTM) accounting rules are what caused existential troubles for banks and investment banks back in 2008. It sounds so compelling at first glance, but only until readers stop and imagine what the outlook for financial institutions would have been without MTM. No different. As Blackstone co-founder Stephen
The Fed’s Stress Tests Are a Conceited Look Backwards Read More »
Economist Gordon Tullock (1922-2014) once quipped that there was an easy way to create safer conditions on American roads: rather than install seatbelts and air bags, attach a rather sharp, driver-facing spear to the steering wheel of each automobile. Tullock’s famous quip comes to mind as the Consumer Financial Protection Bureau (CFPB) continues in
Unable to Protect Consumers, the CFPB Scapegoats the Banks Read More »
The Consumer Financial Protection Bureau (CFPB) ostensibly exists to protect consumers. However, its recent actions raise serious concerns about whether its policies truly serve the best interests of the public. This is particularly evident in CFPB Chair Rohit Chopra’s eleventh-hour decision to cap overdraft fees charged by banks to account holders with negative balances.
The CFPB Serves Moral Hazard, Not the Public Read More »
Whether it’s Goldman Sachs and J.P. Morgan talking to their high-net worth prospects, or Edward Jones and Charles Schwab talking to traditional retail customers, there’s a constant theme in the presentations to both: it’s expensive to not be invested. If you miss the ten best market days of any stretch of time, the latter
In Search of a Purpose, the CFPB Tells Banks to Lose Money Read More »
Banks are in the business of paying interest on deposits so that they can lend out the funds deposited with them at a higher rate of interest. Some will respond that the latter is a statement of the obvious, but sometimes the obvious requires stating. In particular it requires stating as banks are accused
Banks Aren’t Interested In Politics, But Politicians Are Interested In Banks Read More »
There’s no such thing as “easy money” or “costless credit” contra what readers are told with great regularity by economists and their enablers in the commentariat. Evidence supporting this statement of the obvious can most easily be found in the powerful force that is compound interest or returns. Precisely due to the power of
The Surest Sign of Tight Credit? When Central Banks Go to Zero Read More »
