The Sunshine Report

Category Archive: Obama

1. Consumer Credit Needs Common Sense Reform

   0 Post on September 17, 2009

   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

2. Small Business Lending Programs Aren’t Working and Need To Change

   3 Post on July 18, 2009

   Pro­grams to get small busi­ness lend­ing mov­ing aren’t work­ing. Instead of a resur­gence of small busi­ness lend­ing the sit­u­a­tion is get­ting worse. Last week the Wall Street Jour­nal reported that the White House was search­ing for ways to help small busi­ness by unlock­ing frozen credit. This week CIT, the largest small busi­ness lender in the U.S., […] [read full story]

   Posted in: Credit Crisis, economy, Finance, Obama, Politics, Public Policy, Robert Blum, Small Business Lending

3. Banking’s Dirty Little Compensation Secret

   5 Post on May 20, 2009

   Banking’s dirty lit­tle com­pen­sa­tion secret is that most of the fury over bank exec­u­tive pay lim­its is fake. Since the for­ma­tion of the FDIC dur­ing the Great Depres­sion Fed­eral reg­u­la­tors have had the legal author­ity to limit bank pay and have reg­u­larly used that author­ity. But vocal Admin­is­tra­tion crit­ics seem to be inten­tion­ally mis­lead­ing the […] [read full story]

   Posted in: Bank Compensation, BANKS, economy, Finance, Obama, Politics, Public Policy, REGULATION

4. Obama’s Stress Tests Are Designed To Help Banks Raise Capital

   2 Post on May 10, 2009

   Most crit­ics of the Stress Test have missed the point of the tests and under­es­ti­mate the Obama Administration’s clev­er­ness in help­ing banks raise cap­i­tal. The Stress Tests weren’t about reg­u­la­tory super­vi­sion and cer­tainly weren’t an excuse for the Obama Admin­is­tra­tion to nation­al­ize the banks. The tests were designed to pro­vide stan­dard­ized bench­marks, assump­tions and pro­jec­tions […] [read full story]

   Posted in: BANKS, Confidence, Credit Crisis, economy, Finance, Obama, Politics, Public Policy, REGULATION

5. Tangible Common Equity – How Much Is Enough?

   4 Post on March 4, 2009

   Sud­denly, every­one is inter­ested in the amount of tan­gi­ble com­mon equity (“TCE”) invested in banks. Oddly, no one seems to know how much TCE is enough despite TCE being the pri­mary and most impor­tant ele­ment in deter­min­ing the ade­quacy of bank cap­i­tal­iza­tion. Of course, his­tory pro­vides a guide to what is enough TCE and right […] [read full story]

   Posted in: BANKS, Credit Crisis, economy, Finance, Obama, Politics, Public Policy, REGULATION, Regulatory Reform, Timothy Geithner, Treasury

6. 7 Faint Signs That The Economy’s Bottom Is In Sight

   1 Post on February 25, 2009

   There are opaque and early signs that the U.S. econ­omy has started the begin­ning of a bot­tom­ing process. Just like a div­ing sub­ma­rine needs to stop its down­ward motion and reach its low­est depth before it can resur­face, the econ­omy needs to go through the steps of slow­ing its decline and sta­bi­liz­ing before it can […] [read full story]

   Posted in: BANKS, Bernanke, CPI, Credit Crisis, Deflation, Economic Statistics, economy, Federal Reserve, Finance, Fiscal Policy, Inflation, M1, M2, monetary policy, Money Supply, Obama, Politics, Public Policy, TARP

7. If They Weren’t Stress Testing Banks What Were They Doing All These Years?

   3 Post on February 22, 2009

   It is amaz­ing that Geithner’s pro­posal to “stress test” banks is mak­ing news as new pol­icy. After all, reg­u­la­tors were sup­posed to be doing this all along. After the last bank­ing cri­sis in the 1980s bank­ing reg­u­la­tors got the author­ity to antic­i­pate cap­i­tal short­falls as well as oper­a­tional defi­cien­cies. When prob­lems are iden­ti­fied reg­u­la­tors are […] [read full story]

   Posted in: BANKS, economy, FDIC, Finance, Obama, Public Policy, REGULATION, Regulatory Reform, Timothy Geithner, Treasury

8. TARP Isn’t Working For Small Business; Two Simple Solutions To Get Small Business Lending Going Again" rel="bookmark">TARP Isn’t Working For Small Business; Two Simple Solutions To Get Small Business Lending Going Again

   3 Post on February 19, 2009

   A Joint Arti­cle By Mark Sun­shine and Robert Blum   Unfor­tu­nately, the Obama Admin­is­tra­tion isn’t propos­ing much to help restart lend­ing to small and medium sized enter­prises (“SMEs”). While SME’s make up the back­bone of the U.S. econ­omy and pro­vide most of its job cre­ation, the credit cri­sis is mak­ing them eco­nomic road kill. SME’s […] [read full story]

   Posted in: BANKS, Credit Crisis, economy, Finance, Fiscal Policy, Obama, Politics, Public Policy, Robert Blum, Small Business Lending, TARP

9. TARP 1.0 Didn’t Get Lending Going and TARP 2.0 Won’t Be Much Better" rel="bookmark">TARP 1.0 Didn’t Get Lending Going and TARP 2.0 Won’t Be Much Better

   7 Post on February 12, 2009

   TARP 1.0 didn’t get lend­ing going and TARP 2.0 won’t be much bet­ter. The prob­lem is that TARP 2.0 con­tin­ues to focus on banks as the pri­mary lend­ing insti­tu­tions despite the fact that banks aren’t the pri­mary source of non-real estate credit for con­sumers or busi­nesses. Most non-real estate lend­ing takes place through the “shadow […] [read full story]

   Posted in: BANKS, Bond Insurance, Community Development Financial Institutions Fund, Credit Crisis, economy, Finance, Fiscal Policy, Mutual Funds, Obama, Paulson, Politics, Public Policy, SBA, Timothy Geithner

10. Let’s Do The Time Warp Again; Advocates of a 4.5% Mortgage Rate Must Have Come From Another Time And Place

    2 Post on February 8, 2009

    When I hear peo­ple talk about the gov­ern­ment essen­tially man­dat­ing that banks and Fred­die Mac and Fan­nie Mae orig­i­nate 4.5% 30 year fixed mort­gages I think of the Rocky Hor­ror Pic­ture Show and The Time Warp. Mem­bers of Con­gress and econ­o­mists who are push­ing under­priced mort­gages must be from another time and place oth­er­wise they […] [read full story]

    Posted in: BANKS, Bush Administration, Business Environment, Credit Crisis, economy, Fannie Mae, Finance, Freddie Mac, housing crisis, Mortgage, Obama, Politics, Public Policy, REGULATION