Collective Action Clauses: Das Opium des Volkes

Europe is the lead story of the 2010 Crisis Yearbook.  It holds the promise of radical legal innovation in financial crisis management:  it may yet become the birthplace of the first-ever sovereign bankruptcy regime, and the first-ever initiative to standardize sovereign bond contracts issued under the domestic laws of different states.  But for now, Europe is mired in CACology. 

Impossible Foreclosure: Never Late on a Payment

The excuses given for rampant, systemic, illegal foreclosure activity by banks is the overwhelming volume the local offices have to deal with. 

In housing disaster regions like South Florida or Vegas, that nonsense excuse at least has a basis in fact. The reality is the mass volume of foreclosures act to reveal the flaws in the banks processing systems. If they engage in small illegalities in New Hampshire, for instance, its doubtful anyone would notice.

Why Can’t Europe Avoid Another Crisis? Why Can’t the U.S.?

Most experienced watchers of the eurozone are expecting another serious crisis to break out in early 2011.  This projected crisis is tied to the rollover funding needs of weaker eurozone governments, i.e., debts falling due in March through May, and therefore seems much more predictable than what happened to Greece or Ireland in 2010.  The investment bankers who fell over themselves to lend to these countries on the way up, now lead the way in talking up the prospects for a serious crisis.

Curiously Weak Consumer Confidence

There was a bit of angst regarding yesterday’s Conference Board consumer confidence report.  See, for example,  Mark Thoma and Brad DeLong.  The report appears to contradict the generally positive Univ. of Michigan report – still weak compared to pre-recession, but at least moving in the right direction.  More interestingly, it is at odds with recent consumer spending reports, not just early reports of the best Christmas season (in terms of year-over-year gains) since 2005, but also the most recent trends in personal consumption expenditures

New Years Prediction (I): The Tea Party Conservative Strategy for 2011

Next week starts the new Congress, and with it the Tea Party conservatives. What’s their strategy? What will they rally around?

They’ll grouse endlessly about government spending but I don’t think they’ll use any particular spending bill to mobilize and energize their grass roots. The big bucks are in Social Security, Medicare, and defense, which are too popular. And their support for a permanent extension of the Bush tax cuts will make a mockery of any argument about  taming the deficit.

Taming the ‘Wild West’ of Microfinance

The recent suicides by over 60 poor borrowers in the Indian state of Andhra Pradesh have brought the operations of microfinance institutions (MFIs) under public scrutiny. It is well documented by both print and electronic media that these debt-driven suicides were due to coercive methods of loan recovery used by commercial MFIs. The commercial MFIs operate as profit-making non-banking financial corporations (NBFCs) in India. 

Retail Sales Increase Most in 5 years

Leading into the holiday period, the data — and by data, I refer to actual sales numbers, and not surveys, gut feelings or instincts — was strongly suggesting that the 2010 orgy of consumerism known as the holiday shopping season was likely to be stronger than expected. 

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