Category: News and Views

Bunning Statement on Bernanke: ‘You Are the Definition of a Moral Hazard’ | Real Time Economics – WSJ

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Senator Jim Bunning smokes Ben Bernanke:

Instead of taking that money and lending to consumers and cleaning up their balance sheets, the banks started to pocket record profits and pay out billions of dollars in bonuses. Because you bowed to pressure from the banks and refused to resolve them or force them to clean up their balance sheets and clean out the management, you have created zombie banks that are only enriching their traders and executives.

…you put the printing presses into overdrive to fund the government’s spending and hand out cheap money to your masters on Wall Street, which they use to rake in record profits while ordinary Americans and small businesses can’t even get loans for their everyday needs.

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A more complete, yet less satisfying description of the hearing can be read here.

To Sell or Not to Sell: Silicon Valley Acquisitions Market Heats Up | Fast Company

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Yet the history of small Internet companies being snapped up by large ones isn’t pretty. Just in the past few months, eBay has had to unload both StumbleUpon (the Web recommendations engine it bought in 2007 for $75 million) as well as the Internet-phone service Skype (purchased in 2005 for $3.1 billion), each for a loss. Yahoo is looking to rid itself of several properties, including Zimbra, the email company it snapped up in 2007 for $350 million. FeedBurner, Jaiku, and Dodgeball are only a few of the startups languishing in obscurity under the Googleplex.

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Judge blasts bad bank, erases 525G debt | NYPOST.com

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The lucky winner!

The government has been backing up to the back doors of these institutions, unloading truckloads of cash. Many have used the funds to purchase other banks or shore up their balance sheets; few have passed any relief to their customers.  The backlash against them has primarily been debt repudiation (bankruptcy and foreclosure) and now, debt cancellation.

Spinner excoriated OneWest for repeatedly refusing to work out a deal, for misleading him about the dollar amounts at stake in the case, and for its treatment of the couple over months of hearings.

OneWest’s conduct was “inequitable, unconscionable, vexatious and opprobrious,” Spinner wrote.

He canceled the debt because the bank “must be appropriately sanctioned so as to deter it from imposing further mortifying abuse against [the couple].”

The bank is involved in a similar case in California, where it’s trying to foreclose on an 89-year-old woman, despite two court orders telling it to stop.

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Different Bus, Same Driver – Harvard ignored warnings about investments | The Boston Globe

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Can you say, "Greed"?

The very thing that the former endowment chiefs had worried about and warned of for so long then came to pass. Amid plunging global markets, Harvard would lose not only 27 percent of its $37 billion endowment in 2008, but $1.8 billion of the general operating cash – or 27 percent of some $6 billion invested. Harvard also would pay $500 million to get out of the interest-rate swaps Summers had entered into, which imploded when rates fell instead of rising. The university would have to issue $1.5 billion in bonds to shore up its cash position, on top of another $1 billion debt sale. And there were layoffs, pay freezes, and deep, university-wide budget cuts.

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How Rapleaf Is Data-Mining Your Friend Lists to Predict Your Credit Risk | Fast Company

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Get ready for this. You’re being evaluated, no, judged by the company you keep on social networking sites. Using public data, new firms are making some pretty sweeping judgments about you based on what you freely post on sites like MySpace, Twitter and Facebook.

70% of U.S. consumers claiming they “definitely would not” allow advertisers to track their online behavior–even if they remained anonymous–its unlikely consumers will react favorably to businesses monitoring and ranking their social “footprints.” According to the CDT’s Dempsey, further oversight is inevitable, and will likely lead to more transparency. Ultimately, however, Dempsey believes consumers get what they pay for.

“Social networking is part of the advertising-supported Internet,” he says. “It’s one of the free services we all enjoy. Now people are becoming aware there is a cost.”

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