Information about finance, the economy and business. Entertaining and informative. Seeking Alpha Certified Mark Sunshine Chairman & CEO

Category Archive: Finance

  1. Who Owns The Derivatives Market –Industry Concentration Takes On A New Meaning

    The entire debate about the reg­u­la­tion of deriv­a­tives con­tracts takes on a new mean­ing in light of the OCC’s Quar­terly Report on Bank Trad­ing and Deriv­a­tives Activ­i­ties, Sec­ond Quar­ter 2009. The OCC (Office of the Comp­trol­ler of the Cur­rency) pub­lishes all sorts of inter­est­ing reports and hand­books that are largely over­looked by the media. And, the Deriv­a­tives Report is one of those OCC reports that almost no one seems to look at or care about. [read full story]

    Posted in: BANKS, Credit Crisis, Credit Default Swaps, Economic Statistics, Finance, Politics, Public Policy, REGULATION, Regulatory Reform
  2. And Now For Some Really Bad Economic News…(with readable charts)

    Last night I posted an arti­cle with a num­ber of charts that I got from the St. Louis Fed­eral Reserve.  Imme­di­ately, I started receiv­ing e-mails telling me that the charts weren’t read­able.   It is my fault that the charts aren’t read­able and I apol­o­gize for post­ing an arti­cle with unread­able charts.  I have attempted to […] [read full story]

    Posted in: Finance
  3. And Now For Some Really Bad Economic News…

     The U.S. econ­omy has a long way to go before the eco­nomic recov­ery will be either sus­tain­able or robust.  Mon­e­tary indi­ca­tors don’t look good and are once again get­ting worse.  I am con­cerned that the finan­cial sys­tem hasn’t recov­ered enough for the Fed­eral Reserve to with­draw from its pro­gram of quan­ti­ta­tive eas­ing.   While most of the […] [read full story]

    Posted in: BANKS, Credit Crisis, Economic Statistics, economy, Federal Reserve, Finance, Liquidity Trap, M1, M2, Monetary Policy, Money Supply, Politics, Public Policy
  4. Bank Compensation Limits – The Federal Reserve Follows Through

    Last week’s late break­ing news that the Fed­eral Reserve was fol­low­ing through on its plan to change how it reg­u­lates bank com­pen­sa­tion is being fol­low up by this week’s G-20 meet­ing on how bank com­pen­sa­tion curbs can be inter­na­tion­ally coor­di­nated among the large economies. Sur­pris­ingly, how­ever, the media is act­ing as if reg­u­lat­ing bank com­pen­sa­tion is a new issue. It isn’t new at all but rather a prob­lem that they chose to for­get about for the sum­mer. [read full story]

    Posted in: Bank Compensation, BANKS, Credit Crisis, economy, Federal Reserve, Finance, Politics, Public Policy, REGULATION, Regulatory Reform
  5. Consumer Credit Needs Common Sense Reform

    Pres­i­dent Obama’s effort to reform the bank­ing sys­tem doesn’t address the system’s biggest prob­lem which is how con­sumer credit is under­writ­ten in the United States. With­out excep­tion, no mate­r­ial con­sumer loan is made in Amer­ica with­out the borrower’s credit bureau first being pulled by prospec­tive lenders and a credit score used to clas­sify the bor­rower as good, bad or mid­dle risk. Credit scores are sup­posed to accu­rately pre­dict the prob­a­bil­ity of default by con­sumers, but in prac­tice credit scores don’t pre­dict much of any­thing. Banks blindly rely upon the junk put out by con­sumer credit rat­ing agen­cies and are get­ting burnt by ignor­ing the most basic rule of under­writ­ing which is to know their cus­tomer. While banks know borrower’s credit scores and infor­ma­tion on the credit bureau that isn’t the same thing as know­ing their cus­tomer or things like their customer’s assets, lia­bil­i­ties and earn­ing power. [read full story]

    Posted in: BANKS, Credit Crisis, economy, Finance, Obama, Politics, Public Policy, REGULATION, Regulatory Reform
  6. Playing The Patterns — A Guest Article By Phil Davis

    The below is a guest arti­cle from Phil Davis of Philstockworld.com, one of the fastest-growing stock and option trad­ing newslet­ters on the Web.  Phil will be my spe­cial guest on Saturday’s Sun­shine Report, my weekly radio show which runs from 12 PM to 2 PM on Boston WWZN 1510 and is simul­cast on http://lightningstream.surfernetwork.com/Media/player/view/wwzn3.asp?call=wwzn&skin=WWZN. I know you […] [read full story]

    Posted in: economy, Finance, Guest Blog, Phil Davis, Stock Trading
  7. How Did Economists Blow It (Part 2)? – They Missed The Negative Externalities of America’s Limited Liability Society

    Paul Krugman’s New York Times Mag­a­zine arti­cle of Sep­tem­ber 6th main­tains that exter­nal­i­ties are the most impor­tant fac­tor in mar­ket fail­ures, but then never con­sid­ers whether or not large “exter­nal­i­ties” caused the fail­ures of 2007. By ignor­ing exter­nal­i­ties, the usu­ally bril­liant Mr. Krug­man illus­trates why econ­o­mists didn’t see the mar­ket crash and Great Reces­sion. The unin­tended and unrec­og­nized effects of neg­a­tive exter­nal­i­ties were prob­a­bly the largest fac­tor that con­tributed to the sum­mer of 2007crash, yet econ­o­mists vir­tu­ally ignore these cul­tural and soci­o­log­i­cal phe­nom­ena that almost resulted in eco­nomic sep­puku. [read full story]

    Posted in: economy, Finance, New York Times, Paul Krugman, Politics, Public Policy
  8. $11 Trillion In Debt — Who Cares? – A Guest Post By James Sunshine

    OK…I confess…James Sun­shine is my son. He is a fresh­man at Emory Uni­ver­sity and wrote the below op/ed for the Emory Wheel. Of course I am very proud of his work. He says that he writes bet­ter than his Dad and that he is smarter. What do you think? He may be right!! As the national […] [read full story]

    Posted in: China, Economic Statistics, economy, Finance, Guest Blog, James Sunshine
  9. Paul Krugman Gets It Really Wrong In His Analysis Of The Economics Profession

    Paul Krugman’s New York Times Mag­a­zine arti­cle explain­ing the dis­mal state of the eco­nom­ics pro­fes­sion is itself an object les­son in what is wrong with the eco­nom­ics pro­fes­sion.  While Mr. Krug­man is one of the most tal­ented econ­o­mists alive, this arti­cle isn’t an exam­ple of Mr. Krug­man at his best.  Instead of try­ing to fig­ure […] [read full story]

    Posted in: Credit Crisis, economy, Finance, New York Times, Paul Krugman, Politics, Public Policy