links for 2010-06-05
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IM: "Ian Musgrave EDIT: The The Roman Warm Period really did exist, but was not a global event, rather a largely European/North Atlantic one, based at least on changed ocean currents (see for example Earth and Planetary Science Letters Volume 213, Issues 1-2, 1 August 2003, Pages 63-78). And the most recent evidence is that it was not warmer than the medieval warm period (GEOPHYSICAL RESEARCH LETTERS, VOL. 33, L20703, doi:10.1029/2006GL027662, 2006) except perhaps in isolated spots. So Mr. Abbott, when you get climate advice, make sure you get it from real climate scientists."
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TI: "The US bailed out Bear Stearns, Fanny Mae, Freddie Mac, and AIG and other banks on the logic that protection of systemic stability overrides concerns about moral hazard and non-intervention by the government into private transactions. Then it may be better to think of a mechanism to allow those institutions to fail without systemic stability concerns: conduct early examinations on the risk of investment banks and appropriate measures while they are solvent; give power to the regulatory authority to use a resolution mechanism (temporary nationalisation) for investment banks when capital becomes thin but still positive. The resolution mechanism has to be coordinated internationally, since unwinding cross-border transactions needs harmony in bankruptcy law. In sum, I am sceptical of the virtue of bank tax, but enthusiastic about a push toward a credible resolution mechanism.
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EA: "Of all the canards that have been offered about the financial crisis, few are more repellant than the claim that the “real cause’’ of the mortgage meltdown was blacks and Hispanics.... Proponents of the above actually blame the crisis on “government policy’’ to boost home-ownership among low-income families, who just happened to be disproportionately non-white and immigrant... the Community Reinvestment Act “forced’’ banks to make bad loans to irresponsible borrowers, while Fannie Mae and Freddie Mac provided the financial torque by purchasing billions worth of subprime paper. The argument has been discredited time and again, shriveling up almost as soon as it’s exposed to sunlight. But it keeps coming back, mainly because the anti-government narrative gives Republicans a way to deflect allegations that de-regulation allowed Wall Street to run wild. It’s the financial version of Sarah Palin’s new line that “extreme environmentalists” caused the BP oil spill. "
