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News

EU Banking Supervision?

I love how Wolfgang Schauble, the German Finance Minister, puts two effectively contradictory statements right next to each other in his FT op-ed:

It is crucial that the new system be truly effective, not just a façade. We must eschew yesterday’s light-touch approach for good and endow this supervisor with real and clearly defined responsibilities, coercive powers and adequate resources.

This also means that it should focus its direct oversight on those banks that can pose a systemic risk at a European level. This is not just in line with the tested principle of subsidiarity. It is also common sense; we cannot expect a European watchdog to supervise directly all of the region’s lenders – 6,000 in the eurozone alone – effectively.

Is a regulator really effective if some institutions remain outside its scope? Hasn’t that been one of the fundamental failings over the past 20 years that led to the financial meltdown in the first place?

Categories
Humorous News

Bear!

This photo still impresses me.

Categories
News

2012 Olympics “Scandals”

In other thoughts, the 2012 Olympics in London haven’t even officially kicked off yet (or perhaps I should say, they’re just starting now, given the time zone change), but we’ve already managed to have multiple “scandals” emerge.  Way to get things started!

Let the Games begin!

Categories
News Rutgers

My Big East Rankings – Week 2

Week 2 brought some separation among the schools.  Here are my thoughts on week 2.

1.  USF – 2 wins back to back, and no hesitation in beating Ball State.

2.  West Virginia – Losing 12 – 10 to Norfolk State at the half disqualifies you for the top spot, even if you eventually win 55-12.

3.  Pittsburgh – Struggled to hold off Maine, but still managed to win.

4.  Syracuse – Fought off Rhode Island, but again, a win is a win.

5.  Rutgers – Defense – check.  Special Teams – check.  If Rutgers finds a running game, they can still do really well this season.

6.  UConn – Rutgers may not have a run game, but UConn doesn’t have an offense.

7.  Cincinnati – You have to be in it to win it.  Cincinnati was never in it with Tennessee.

8.  Louisville – Nice job giving FIU their first win ever over an AQ school.  The score makes this game look closer than it was.

Categories
News

Competition

I just read the summary of AT&T’s response to Sprint’s lawsuit trying to block the T-Mobile takeover.  I’m no fan of T-Mobile’s, Sprint’s, or AT&T’s, but this line really sticks out for me from AT&T: “[T]his simply demonstrates what we’ve said all along — Sprint is more interested in protecting itself than it is in promoting competition that benefits consumers.”

Seriously?  I’m not sure how the logic works that says that taking out a competitor actually increases competition that benefits consumers.  Giving me less choice apparently increases competition now.

Categories
News

Yes, Why Do We Keep Choosing Ineffective Urban Interventions?

From the article

Last week, the NAACP released a report with a blunt, but sadly accurate, title — Misplaced Priorities. I could not help but think about this title in terms of the House of Representatives’ proposed zeroing out of YouthBuild.YouthBuild has been rigorously evaluated and justifiably acclaimed for its success in turning around the lives of troubled youths, many court-involved, most of color, living in urban centers across the country.

All for $16,000 per youth — what we might call a bargain. Even before any cuts, almost 20,000 youths are turned away from YouthBuild each year because of lack of funding. If the House gets its way, YouthBuild programs across the country will be decimated. The result: more crime, more poverty, more joblessness, more substance abuse, more fractured families, less state revenue, more despair. Misplaced Priorities hardly captures the astonishing myopia of the House’s proposal. As Woody Guthrie once sang, “Some rob you with a sixgun, some with a fountain pen.”

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News

Health Care Plan Comparison

The Wall Street Journal did a nice job summarizing the various health care plans floating around in Congress.  Here’s the summary.

Note the completely useless options offered by House Republicans on most of the major issues.  They do nothing to reduce either healthcare inflation or the rising numbers of uninsured who lack access to high quality, affordable medical care.

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News

The Wonderful World of TKTS

Also known as a way of buying tickets to Broadway shows that I’ve never used.

The NY Times Arts Beat blog had an interview today with Victoria Bailey, the executive director of the group that runs the TKTS booths.  Perhaps next time I’m in NYC I’ll finally have a chance to use the booths.

Categories
News

Wall Street Wins Again?

Coming off the news of the latest Wall Street ripoff scam, federal regulation to reign in Wall Street is foundering in Congress.  Hopefully the regulators, Administration, and Congress can get their act together to put through meaningful reform so banks don’t create multi-trillion dollar holes they need to be bailed out of again, all while making sure the individuals become filthy rich.

Categories
News

High Speed High Stakes

Also known as how the big Wall Street firms are like casinos.

The NY Times today had an article out today that coincidentally jives with a story I heard earlier this week from someone I work with.  Wall Street trading desks have essentially figured out how to determine what buy and sell decisions investors are making in the markets BEFORE those trades are executed and trade against them, allowing the firms to reap huge profits at the expense of regular investors.

It was July 15, and Intel, the computer chip giant, had reporting robust earnings the night before. Some investors, smelling opportunity, set out to buy shares in the semiconductor company Broadcom…The slower traders faced a quandary: If they sought to buy a large number of shares at once, they would tip their hand and risk driving up Broadcom’s price. So, as is often the case on Wall Street, they divided their orders into dozens of small batches, hoping to cover their tracks.

The slower traders began issuing buy orders. But rather than being shown to all potential sellers at the same time, some of those orders were most likely routed to a collection of high-frequency traders for just 30 milliseconds — 0.03 seconds — in what are known as flash orders. While markets are supposed to ensure transparency by showing orders to everyone simultaneously, a loophole in regulations allows marketplaces like Nasdaq to show traders some orders ahead of everyone else in exchange for a fee.

In less than half a second, high-frequency traders gained a valuable insight: the hunger for Broadcom was growing. Their computers began buying up Broadcom shares and then reselling them to the slower investors at higher prices.

The result?  The high-frequency traders ripped off the regular investors for $7,800 on $1.4 million in trades.  As a %, not a lot, but if this happens EVERY day on EVERY trade, it adds up to billions.  All because some large financial institutions have access to your orders before everyone else does, so they can bet against you to steal your money.