Green Bay native Paul Gigot, editor of the Wall Street Journal, deserves a Pulitzer Prize for Journalism for his dogged pursuit of the truth with respect to the GSE Twins. For much of the last decade Paul has personally authored article after article detailing the financial risks to the public as well as the broader …
Continue reading “Wall Street article on Freddie and Fannie”
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The long rumored takeover of Fannie and Freddie (the GSE twins) finally happened this weekend. What this means for the near term and long term remains unclear. Let me tick off a few points. The Regulators judgment is that the consequences of collapse would have been too catastrophic. I am sure they are right. This …
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In these midsummer weeks we are hearing a lot of commentary about the one year anniversary of the credit crisis. In 25 years of Wisconsin banking, I haven’t seen anything like the last 12 months. Many of the major financial institutions in the country have written off more than 50 % of their capital (think …
Continue reading “Introduction to the Credit Crisis”
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It is not accurate to say that the credit crisis is one year old. The credit crisis that we see is the fruit of bad lending, bad investment and bad policy decisions made over many years. Two years ago we were extremely concerned about how easy it was to raise bank capital and how hard …
Continue reading “Why is there a credit crisis?”
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For the last 50 years our nation has lived with the idea that our government can borrow as much as it wants and set its own rates through Fed Policy. I think the coming year will reveal a change that has already occurred. I think the Fed has less control over rates and the economy …
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It has been wisely observed that you can ignore politics, but politics won’t ignore you. Quite frankly I am not very happy with the offerings of either party when it comes to economic policy. Republicans talk a lot about economic freedom, but they seem to be best at crony capitalism. The Democrats siren song of …
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Speaking of Congress, I thought Sarbanes Oxley was supposed to improve the integrity of financial reporting. Every one of the major public institutions complied with Sarbanes Oxley in their 2006 year end reporting. I thought Congress had acted to protect investors from inaccurate financial reporting. We went private after Sarbox went into effect precisely because …
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