What Could Possibly Go Wrong

The Big-Picture Economy, Part 3: Scarcity, Risk and Debt

"Scarcity of credit is the source of sound risk assessment and the discipline of aligning interest rates to risk and inflation. Manipulating rates to near-zero and opening the credit floodgates has incentivized everything sound economic policy avoids: moral hazard, speculation, leverage and reliance on marginal credit expansion for profits and 'growth.' 'Growth' that depends on manipulated interest rates and easy credit is a sand castle awaiting the rising tide; its destruction is assured." Continue reading →

Continue ReadingThe Big-Picture Economy, Part 3: Scarcity, Risk and Debt

Some traders got Fed ‘no taper’ decision news early

"The Federal Reserve says it is contacting news organizations to discuss the rules surrounding lock up procedures and the release of market moving information from the Federal Reserve's headquarters in Washington. But the leading expert on millisecond level trading says he is focusing his attention on a certain type of news organization – those that offer so-called 'low latency' services to feed market moving data at high speeds directly into computerized trading systems. A key question is whether or not any organization transmitted information out of the lockup room and into its own computer system before 2 p.m." Continue reading →

Continue ReadingSome traders got Fed ‘no taper’ decision news early

Obamacare Navigators Won’t Have To Pass Background Checks

"Ben Swann takes a look at HHS navigators and the massive amounts of private and personal information they will collect and store in the Federal Data Hub under Obamacare. Plus, we ask the question, does private information even exist anymore?" Continue reading →

Continue ReadingObamacare Navigators Won’t Have To Pass Background Checks

30,000 people can access Ohio driver’s license database with no oversight

"Ohio allows thousands of police officers and court employees to access driver’s license images online without oversight, by far the nation’s most permissive system. A recent Cincinnati Enquirer/Gannett Ohio investigation found the state permits 30,000 law enforcement officers and others to search the image database, which Attorney General Mike DeWine admitted last month had been uploaded in June without telling the public or reviewing security protocols. The Republican attorney general said similar technology was used by law enforcement in more than half the U.S., but the Enquirer’s report showed the technology is far more limited elsewhere." Continue reading →

Continue Reading30,000 people can access Ohio driver’s license database with no oversight

Subprime lending execs back in business five years after crash

"Five years after the financial crisis crested with the bankruptcy of Lehman Brothers Holdings Inc., top executives from the biggest subprime lenders are back in the game. Many are developing new loans that target borrowers with low credit scores and small down payments, pushing the limits of tighter lending standards that have prevailed since the crisis. Some experts fear they won’t know where to stop. The Center for Public Integrity in 2009 identified the top 25 lenders by subprime loan production from 2005 through 2007. Today, senior executives from all 25 of those companies or companies that they swallowed up before the crash are back in the mortgage business." Continue reading →

Continue ReadingSubprime lending execs back in business five years after crash

Debt: Still Cheap, and Getting Looser

"The industry is clearly rebounding. Guy Cecala, publisher of the trade magazine Inside Mortgage Finance, says, 'You're going to see a little more risk coming into the system' as lenders permit smaller down payments and finance more investment properties. 'Five years down the road and we're back in the thick of it again. It's a weird place to be,' says Cliff Rossi, who was a high-level risk management executive at Countrywide, Washington Mutual, and Freddie Mac before the crisis. 'In that intervening 20 years, we forgot what we learned in the '80s,' he says. 'I fear right now, human nature being what it is, that downstream we could find ourselves in the same situation.'" Continue reading →

Continue ReadingDebt: Still Cheap, and Getting Looser

The Taper Caper

"Under normal conditions, you'd be smart to assume that the Fed won't taper until unemployment falls below 7% and inflation rises above 2%. But there's a curveball: Bernanke will almost certainly step down as head of the Fed in January 2014. Rumors say that he wants to begin tapering before he leaves, for obvious reasons. Such action would increase the odds of history viewing him favorably. If Bernanke tapers, he can take credit for putting the US on a responsible path before handing the reins over to the next guy or gal. Whatever happens after that is Janet Yellen's problem (or whoever-replaces-Bernanke's problem)." Continue reading →

Continue ReadingThe Taper Caper

Too Big To Fail Is Now Bigger Than Ever Before

"Ever since the financial crisis of 2008, our politicians have been running around proclaiming that they will not rest until they have fixed 'the too big to fail problem', but instead of fixing it those banks have rapidly gotten even larger. We are witnessing a consolidation of the banking industry that is absolutely stunning. Hundreds of smaller banks have been swallowed up by these behemoths, and millions of Americans are finding that they have to deal with these banking giants whether they like it or not. These banks have been unbelievably reckless, but when they fail, we will all pay the price." Continue reading →

Continue ReadingToo Big To Fail Is Now Bigger Than Ever Before

Marc Faber on higher education & protecting yourself in economic collapse

"Marc Faber is an economic authority on global macroeconomics, capital markets, and investment and the Editor & Publisher of 'The Gloom Boom & Doom Report'. He spoke with The Prospect Group about university style formal education, the coming economic collapse, and the options people to preserve their wealth." Continue reading →

Continue ReadingMarc Faber on higher education & protecting yourself in economic collapse