Posted by on May 04, 2013
George Will: Courts and Congress give Obama adult supervision
Rep. Jeb Hensarling (R-Tex.), chairman of the Financial Services Committee, has told Richard Cordray not to bother. This is part of the recent evidence that government is getting some adult supervision.
Barack Obama used a recess appointment to make Cordray director of the Consumer Financial Protection Bureau. But a federal circuit court has declared unconstitutional three other recess appointments made the same day because the Senate was not in recess. So Hensarling has told Cordray not to testify before his committee: “Absent contrary guidance from the United States Supreme Court, you do not meet the statutory requirements of a validly serving director of the CFPB, and cannot be recognized as such.”
Competitive Enterprise Institute: Did Hensarling Force Obama’s Hand on “Recess” Appointments?
Chairman Hensarling’s action to block Richard Cordray from testifying on the CFPB’s semi-annual report may have forced the Obama administration’s hand in submitting a brief later in the week urging the Supreme Court to resolve the issue. What Chairman Hensarling was doing, in the words of columnist George Will, is give an out-of-control government some needed “adult supervision.” Judging by the White House’s reaction, Hensarling is succeeding.
Financial regulation dominated rulemaking in 2012, a direct result of the Dodd–Frank Act. Financial services regulators were responsible for 13 of the 25 new major rules issued. Far too often, the quality of cost analyses by regulatory agencies is substandard—particularly with respect to Dodd–Frank rulemaking. For example, some regulations issued by the SEC under the Act have been invalidated by the courts because of faulty cost-benefit analyses.
Las Vegas would seem a highly unlikely locale for a new housing bubble since the area’s jobless rate hovers near 10% and a healthy housing market depends on people having jobs. But the area is one of many mini-bubbles spawned by the Federal Reserve’s campaign to buttress growth with "quantitative easing," a wave of asset purchases that's pumping cheap money into the still-weak US economy.
Daily Caller: Dodd-Frank a total failure, bipartisan panel agrees
A mix of conservative and liberal speakers at an American Enterprise Institute discussion all agreed the 2010 law has utterly failed in its purpose of reducing the systemic risk posed by “Too Big to Fail” financial institutions.
New York Post: Sink QE! (the money-printing plan, that is)
The Federal Reserve made it official yesterday, saying it’s full steam ahead for the money-printing operation that is creating all sorts of financial dislocations without helping the economy grow very much.
Posted by on April 27, 2013
Wall Street Journal’s Mary Kissel: Disdain for the Courts
The House Financial Services Committee disinvited Consumer Financial Protection Bureau chief Richard Cordray from testifying Tuesday, noting President Obama's non-recess, recess appointment of Mr. Cordray and a January D.C. Circuit Court of Appeals decision, Noel Canning v. NLRB, that invalidated other appointments made under the same pretense. In a letter to Mr. Cordray, Texas Republican Jeb Hensarling said his committee stands "ready to accept the testimony of the Director of the CFPB" when "an individual validly holds this position."
National Review Online: Jeb Hensarling on Richard Cordray
President Obama’s attempt to circumvent the Senate by unilaterally appointing Ohio politician Richard Cordray to the Consumer Financial Protection Bureau may have been premised on his expectation that he would get away with it. If so, he seems to have miscalculated, because the other two branches of government are providing him with a Sesame Street demonstration of the concept of “checks and balances.”
Amazingly, CFPB spokesmen continue to insist that Noel Canning does not apply to Cordray’s improper recess appointment although they have provided no explanation as to why it does not.
New York Times: Possible Fed Successor Has Admirers and Foes
In July 1996, the Federal Reserve broke the metronomic routine of its closed-door policy-making meetings to hold an unusual debate. The Fed’s powerful chairman, Alan Greenspan, saw a chance for the first time in decades to drive annual inflation all the way down to zero, achieving the price stability he had long regarded as the central bank’s primary mission.
The evolution of market news — from messages on homing pigeons to newspaper articles to round-the-clock wire reports — has taken yet another disruptive step with the arrival of Twitter on trading desks throughout the world.
Bloomberg: Central Banks Load Up on Equities
Central banks, guardians of the world’s $11 trillion in foreign-exchange reserves, are buying stocks in record amounts as falling bond yields push even risk- averse investors toward equities.
The FHA exists to help first-time and low-income homebuyers achieve responsible homeownership. Sadly, the federal agency has strayed far from its historic mission and instead is setting families up to fail and saddling thousands of neighborhoods across America with high rates of home foreclosures.
Posted by on April 26, 2013
Chairman Jeb Hensarling announced this week that the committee cannot legally accept testimony from Richard Cordray on the Consumer Financial Protection Bureau’s (CFPB) semi-annual report until he is legally installed as the CFPB Director. However, the committee will continue to conduct rigorous oversight of the CFPB, and has already invited CFPB officials to testify at an upcoming hearing on the agency’s new Qualified Mortgage rule. Chairman Hensarling explains why the committee cannot receive the CFPB’s semi-annual report from Cordray in the video above.
Posted by on April 25, 2013
Freedom and human dignity are the ideals upon which our country was founded -- and these ideals leave no room whatsoever for bigotry and hatred -- none.
H.R. 360 posthumously bestows Congress's highest civilian honor -- the Congressional Gold Medal -- to Addie Mae Collins, Cynthia Wesley, Carole Robertson and Denise McNair. This legislation is a reminder of America's noble founding and a tribute to these four girls whose tragic deaths galvanized a nation to action.
Posted by on April 23, 2013
Posted by on April 22, 2013
A little over a year ago, Congress passed the Jumpstart Our Business Startups (JOBS) Act. The JOBS Act was designed to make it easier for entrepreneurs to raise capital and turn their ideas into job-creating businesses that might one day go public. At a time of slow growth and high unemployment, the JOBS Act was a big win for the St. Louis region and the American economy.
Not only was the JOBS Act good policy — it also was an important bipartisan breakthrough at a time of heightened partisanship. During the Rose Garden signing ceremony, President Obama hailed the bill as a “potential game-changer” and noted that the JOBS Act “represents exactly the kind of bipartisan action we should be taking in Washington to help our economy.”
I couldn’t agree more with the president. But unfortunately, the gears of bureaucracy in Washington have kept the JOBS Act from being implemented. As entrepreneurs and investors in the St. Louis region sit and wait, the Securities and Exchange Commission (SEC) has failed to finalize key aspects of the JOBS Act.
Congress directed the SEC to write simple rules that would allow entrepreneurs to start raising capital, while also ensuring strong investor protections remain in place. But one year later, the SEC has missed important deadlines to finalize two of these rules, and there is little indication they are ready to implement other portions of the bill.
For example, one provision would make it easier for businesses to advertise investments in their company to potential investors. The SEC was required to issue a final rule for this provision by July 2012. However, nine months later the SEC has only gone so far as to issue a rule proposal, which is Washington’s way of saying “We’ll get back to you later.”
Another provision would create opportunities for startups to “crowdfund,” or pool small investments from a number of people who want to invest in companies they believe in. The SEC was required to finalize crowdfunding rules by December 2012, but again they have dragged their feet as startups and investors stand idle. It’s not as if these rulemakings are foreign to the SEC. In fact, writing rules that facilitate capital formation while maintaining investor protections is largely why the SEC exists. If the SEC is able to finalize rules dealing with “conflict minerals” in the Democratic Republic of the Congo (as they did in August 2012), there’s no reason why the JOBS Act should remain unfinished.
The St. Louis region stands to benefit from the JOBS Act in terms of jobs, growth and new innovations — but only if the Washington bureaucracy gets out of the way and lets American entrepreneurs do what they do best. The House Financial Services Committee, on which I serve, has made implementation of the JOBS Act a top priority for this Congress. The time for delays and excuses is over — the SEC must recognize that their inaction has real economic consequences.Ann Wagner is the Republican U.S. Representative from Missouri’s 2nd Congressional District.
Posted by on April 20, 2013
WSJ-MarketWatch: How Thatcher would have fixed the financial crisis
She ignored conventional wisdom, acted on her beliefs
UK Telegraph: The IMF is flunking the financial crisis
By turning its fire on Britain, the IMF gives the impression it is out of ideas and solutions
Financial Times: Wake up to the #Twitter effect on markets
Investors need to spend more time thinking about the way social media can affect financial markets
Reuters: New regulations require cleaner data
Continuing efforts by financial regulators and by firms themselves to monitor and offset risk have affected almost all areas of firms’ operations, including the management and maintenance of data. The overhaul of global systems following the financial crisis has led to an audit of data, and specifically of the information which firms hold about themselves and their counterparties or clients, known as business entity reference data.
It is time to close both Fannie Mae and Freddie Mac—the government-sponsored mortgage giants. Both entities distort the country’s housing finance market by issuing mortgage-backed securities with subsidized government guarantees that the mortgages will be repaid. If guarantees are necessary, they should be priced and issued by the private sector, not by the state. Financial institutions expert David C. John details specific steps to achieve this shutdown carefully and methodically without further upsetting the delicate housing market—and without making the situation worse.
Heritage: Promoting Economic Freedom Key to Realizing World Bank’s Mission
Posted by on April 12, 2013
Margaret Thatcher’s economic policies, we are often told, were cruel, harsh, immoral. In fact she was a deeply moral thinker, and the moral superiority of the free market was central to her thinking. She made the case for it like no other major political leader.
Washington Post: Is easy money creating a new wave of bubbles?
Trillions of new dollars, euros, yen and pounds are sloshing around the global financial system, a result of extraordinary efforts by the leading central banks over the last several years to try to yank their economies out of their long slump. And it has to go somewhere. Will that somewhere wind up being a new set of financial bubbles that pop and send us back where we started?
RealClearMarkets: President Obama Trumpets 'Financial Capability' While Undermining It
The President proclaimed April to be National Financial Capability Month, a new twist on what used to be called financial literacy month. Who can argue with wanting to make sure that people have "access to the information and tools that empower them to operate safely and smartly in the marketplace"? The strategy being employed to achieve this objective is the problem.
WSJ-MarketWatch: Getting used to a slow-growth future
Irrational exuberance is back. I know, I know. The Dow Jones Industrial Average just rose to yet another record close. Call it irrational, but exuberance is being handsomely rewarded in this market.
So far, Bitcoin is not a big deal. Its total value in circulation was $1.4 billion as of this week. That's equivalent to the currency stock of a small nation -- somewhere between Iceland and Uruguay -- and just one-thousandth of the total value of U.S. dollars in circulation.
Should the federal government break up America’s big banks? Once confined to the populist fringes of policy debate, the idea has developed surprising momentum in recent months, with a number of conservative voices jumping on the bank breakup bandwagon
Momentum to break up the nation’s largest banks is building quickly on Capitol Hill, just weeks after a unanimous, symbolic vote in the Senate to end taxpayer subsidies to Wall Street.
News from the housing market is finally positive: house prices are rising and the share of seriously delinquent loans is down. One major exception? FHA-guaranteed mortgages.
Posted by on April 01, 2013