Too Big to Fail (TBTF)

Why No Prosecutions

08/26/12

The NYTimes had a very good editorial today bemoaning, with resignation, that there will not be any serious prosecutions of senior bank executives or institutions for the financial crisis.  The biggest fish to be caught was Lee Farkas. Who? That's the point.

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Do Your Research, Ezra Klein!

08/21/12

Ezra Klein has joined the melee over the Obama Administration's housing policy failure with an apologia for the Administration.  Klein argues: 

The right question on housing, then, is not whether the administration’s policies proved insufficient. They did. It’s what would have been better. And that’s not a question that either Appelbaum or Goldfarb conclusively answer. It’s not even a question that the most credible critics of the Obama administration’s housing policies conclusively answer.

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The Tenuous Case for Swaps Clearinghouses

08/15/12

I've got a new short article out about swaps clearinghouses.  It's a response piece to an article by Prof. Yesha Yadav.

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The New Cramdown

06/29/12

For the past couple of years, I've been thinking that cramdown is dead as a policy solution. But I was thinking about cramdown as requiring legislation. It doesn't. We could start doing it tomorrow. Under current bankruptcy law, a Chapter 13 plan may be confirmed only if secured creditors receive their collateral, receive the value of their collateral, or consent to the plan.

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FHFA Wants Money Transferred from Local Government to Bondholders

06/25/12

FHFA has sued the State of Illinois and some local government units claiming that Fannie Mae and Freddie Mac are exempt from state and local real estate transfer taxes. FHFA's argument is basically that the GSEs are subject only to non-discriminatory real estate taxes and real estate transfer taxes aren't real estate taxes.  

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Eaton v. Fannie Mae Analysis

06/22/12

The Massachusetts Supreme Judicial Court finally issued its long-awaited ruling in Eaton v. Fannie Mae. This case involved the question of whether a "naked mortgagee"--a mortgagee that was not also the holder of the promissory note--had standing to foreclose.

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Securitization Fail-Litigation Update

06/21/12

The wheels of litigation move slowly, but there are a couple of recent securitization fail litigation decisions that are worthy of note. First, in the Congress case, a wrongful foreclosure action in Alabama (see my previous blogging on it here), the Alabama appellate court reversed and remanded, a victory for the homeowner.

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GM, Chrysler and Ideologically Selective Bankruptcy Formalism

06/14/12

James Sherk and Todd Zywicki have an op-ed in the Wall Street Journal that kvetches about the unfairness of the Chrysler and GM bankruptcies.  As one might expect, their complaint centers upon the contention that the senior lienholders in Chrysler get 29 cents on the dollar, while the UAW VEBA received a superior treatment despite holding a general unsecured claim.

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Making Banks Boring

06/11/12

Bloomberg has an editorial arguing that making banks boring won't prevent a crisis; only increasing bank capital will do so.  

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