The Sunshine Report

Archive: Dec 2008

1. “Stupid is as stupid does” — the SEC and CFTC legalize electronic gambling" rel="bookmark">“Stupid is as stupid does” — the SEC and CFTC legalize electronic gambling

   8 Post on December 27, 2008

   For­est Gump said “stu­pid is as stu­pid does” and the lat­est move by the SEC and CFTC to license clear­ing­houses for credit default swaps is about as stu­pid as it comes. Rather than ques­tion­ing the under­ly­ing eco­nomic ratio­nal and legal­ity of credit default swaps, the SEC and CFTC have decided to facil­i­tate the pro­lif­er­a­tion of […] [read full story]

   Posted in: CFTC, Credit Default Swaps, economy, Finance, Public Policy, REGULATION, SEC

2. 9 Predictions for 2009

   1 Post on December 26, 2008

   Set forth below are my pre­dic­tions for 2009. Let’s hope that at least some of them come true. Early in 2009, the banks start lend­ing again In Jan­u­ary, the banks will real­ize that they can­not avoid lend­ing for­ever. The Fed­eral Reserve will finan­cially pun­ish any bank that refuses to lend by manip­u­lat­ing inter­est rates so that banks […] [read full story]

   Posted in: 2009 Predictions, BANKS, Credit Crisis, Deflation, Economic Statistics, Finance, Fiscal Policy, Inflation, Madoff, monetary policy, Obama, Politics, Public Policy, Regulatory Reform

3. Money Supply And Economic Data Weekly Watch — How the Fed is Making Banks Lend

   2 Post on December 19, 2008

   The Fed­eral Reserve is forc­ing banks to lend or face finan­cial dis­as­ter. The Fed’s lat­est strat­egy gives banks the stark choice of lend­ing or los­ing a lot of money from oper­a­tions. Every­one knows the Fed cut its tar­get Fed­eral Funds rate to the bone this week. In a less obvi­ous move, the Fed is also […] [read full story]

   Posted in: BANKS, Bernanke, Credit Crisis, Deflation, Economic Statistics, economy, Federal Funds Rate, Federal Reserve, Finance, M1, monetary policy, Money Supply, Politics

4. Good Regulation Requires Good Regulators

   0 Post on

   As the SEC comes to grips with the Bernie Mad­off scan­dal, I am reminded of a law school course that I took 25 years ago where I was taught that good reg­u­la­tion requires good reg­u­la­tors. Unfor­tu­nately, the SEC has turned into a bad reg­u­la­tor and has lost the respect of the pub­lic it is sup­posed […] [read full story]

   Posted in: Chris Cox, Criminal Law, Finance, Madoff, Mary Schapiro, SEC

5. Low Oil Prices Kill Energy Investments

   0 Post on December 17, 2008

   Last week I pub­lished a blog arti­cle that dis­cussed energy pol­icy and sug­gested that an effec­tive energy pol­icy requires fed­er­ally estab­lished min­i­mum oil prices. Low and volatile oil prices destroy pri­vate invest­ment in energy projects because returns become too uncer­tain to attract financ­ing. As oil trades between $40 and $50 per bar­rel invest­ment capac­ity for […] [read full story]

   Posted in: economy, Energy, Finance, Oil, Politics

6. The Target Fed Funds Rate Was Cut On December 4th – Didn’t Anyone Notice?

   0 Post on

   The Fed­eral Reserve cut the tar­get fed­eral funds rate on Decem­ber 4th and appar­ently few peo­ple noticed. Accord­ing to data found on the New York Fed­eral Reserve Bank’s web site, begin­ning on Decem­ber 4th fed­eral funds traded on aver­age in a range from 0.20% to 0.11%. The New York Fed­eral Reserve web site states that […] [read full story]

   Posted in: Economic Statistics, economy, Federal Funds Rate, Federal Reserve, Finance

7. Money Supply And Economic Data Weekly Watch – Living in the Twilight Zone

   0 Post on December 15, 2008

   We’ve entered the twi­light zone. This week’s money sup­ply and eco­nomic data is sur­real. Money sup­ply is grow­ing at an unbe­liev­able pace. As mea­sured by sea­son­ally adjusted M1 and M2, the Fed announced that money sup­ply set new all time records. The quick rate of growth for money sup­ply is actu­ally accel­er­at­ing. Over the last […] [read full story]

   Posted in: Cox, Deflation, Depression, Economic Statistics, economy, Federal Funds Rate, Federal Reserve, Finance, Hoover, Inflation, M1, M2, Madoff, monetary policy, Money Supply, Public Policy, SEC

8. 10 Simple Uber-rich Investment Rules

   0 Post on December 14, 2008

   I didn’t think that the uber-rich needed my advice until the last few days. After all, they are the uber-rich and I am one of the “lit­tle peo­ple”. I fig­ured they knew more than me and it was from their spe­cial knowl­edge that they got their uber-status. But after the last few days I believe […] [read full story]

   Posted in: Business Environment, economy, Finance, Investments, Madoff, Petters

9. Three Inconvenient Energy Policy Truths

   1 Post on December 11, 2008

   Pres­i­dent Elect Obama nom­i­nated his energy team yes­ter­day and empha­sized that energy pol­icy is a national pri­or­ity. Every Pres­i­dent since Jimmy Carter has talked about U.S. energy inde­pen­dence, but no Pres­i­dent has actu­ally bro­ken the U.S. addic­tion to imported oil. In the 1970s, I stud­ied energy eco­nom­ics and pol­icy and learned that man­dates, slo­gans and “feel […] [read full story]

   Posted in: economy, Energy, Finance, Obama, Oil, Politics

10. The Wall Street Journal Is Wrong To Underplay Deflation

    0 Post on December 6, 2008

    Today’s Wall Street Jour­nal Heard On The Street col­umn said that the “air maybe going out of the defla­tion risk”. The arti­cle states “…his­tory shows how quickly defla­tion can give way to infla­tion. Paul Kas­riel, direc­tor of eco­nomic research at North­ern Trust notes that in 1933, the U.S. suf­fered severe defla­tion, yet the fol­low­ing year […] [read full story]

    Posted in: Deflation, Economic Statistics, Finance, Great Depression, Inflation, Paul Kasriel, Wall Street Journal