2016

Standing on the beach and gazing at the exotic and unmapped shores of Trumpania (the land remade by the orange swan on November 9th), I am struck by the discontinuity of having watched our government and chattering class looking at our banking sector exclusively through the lens of risk and distrust these past 8 years only now discovering that it might make sense to look at the banking sector through the lens of growth. Headline News! The banking sector is a critical component of a growing healthy economy! Who would have thought! The signs are already there that the focus of the government will be significantly less on bolstering prudential regulation and materially more on empowering the banks to provide liquidity needed for the economy to reach that magic 4% place that Mr. Trump has told us that we will achieve.
Continue Reading All You Villainous Bankers: Time to Take Off Those Black Hats

As is our tradition here at Crunched Credit, each year, about this time, we present our Golden Turkey Awards. In a year of monumentally bad surprises, we truly had difficulty narrowing our list down to only the exceptionally worthy candidates. Voters, governments and regulators sent shockwaves throughout the world in 2016, upending markets and throwing much of what we thought we knew into the proverbial dumpster fire of society. If what we know now we knew when we last gave the Golden Turkey Awards, we may have taken a pass on 2016. It can’t get any worse, right? As we get ready to step into the unknown of 2017, here is our list for 2016:
Continue Reading CrunchedCredit.com’s 7th Annual Golden Turkey Awards

As we are just inking one of the very first pre-risk retention effective date risk retention deals (Potemkin Village anyone?), we are also seeing an increased flow of what are generically referred to as CRE CLOs. It’s time to consider how the Risk Retention Rule (the “Rule”) will apply to this growing market technology.
Continue Reading Risk Retention and the CRE CLO

orange theodolite prism lies on a background of geodetic maps of the areaFor those of you who read our commentary regularly, you’ll see that we span the commentariat world from musings of perhaps little practical utility but great import (at least to us) to the more mundane.  Today, mundane. Let’s talk title policies and survey standards.  There’s good news here and often good news doesn’t travel fast enough, so here we go.

Title policies “insure over” information that a survey would discern.  It’s precious little good to have a title policy yet find out there’s a missile silo just behind the setback line owned by the US Government.  So title companies require a survey and will generally insure over any nasty surprises the survey would have uncovered.
Continue Reading Seeing is Believing: ALTA’s New Survey Standards

Although registration was up this year for IMN’s 22nd Annual ABS East conference held at the Fontainebleau Miami Beach earlier this month, attendance was lower than it’s been in previous years as many industry participants decided against attending due to concerns about the recent Zika outbreak in Miami. The CLO sector, however, continued to be well represented and the consensus of the conference attendees was that CLOs have a very positive future ahead.
Continue Reading Zika Keeps Investors Away From ABS East, But Not From CLOs

Your correspondent is fresh from the front-lines of the risk retention wars where great armies of lawyers, bankers and advisers are fixedly staring at each other, staring out of the redoubts of their respective defensive crouches in a complex, multidimensional chess game.  All are fervently hoping against hope that something or someone does something to create clarity and allow our business to pivot around this new set of rules so it can continue to thrive.  I think all of us in the finance world are justifiably proud of the fact that if we are given a set of rules, we’ll figure out how to conduct business.  But the uncertainty here is freezing everyone in place, a giant front court pick that we can’t seem to get around.  But one thing is certain and that is that Christmas Eve is coming and with it this Rule will become effective.  After having obsessed about the Risk Retention Rule for years now, we are broadly no closer to clarity about how one should play in the soon to be upon us risk retention world.
Continue Reading A Report From the Risk Retention Front-Lines

Maybe it’s because I have been in Europe this past week (Munich at Octoberfest actually – Men in way-too-short leather shorts, dirndls, beer steins the size of a politician’s ego, the most astonishing amount of drinking, etc. Good heavens.) I have been wondering: Has anyone been paying attention to what’s happening in Europe lately? You’ve read about Europe periodically in this commentary because we think that the financial success of the European Experiment continues to matter a lot for financial markets in the US and for the US economy more broadly. Here’s a flash, it is still broke.
Continue Reading Remember Europe? Harshing My Mellow

I’d like everyone to go out and buy a copy of Professor Paul Mahoney’s slender new book, Wasting a Crisis – Why Securities Regulation Fails.  Paul is a brilliant guy.  Until this spring, he was the dean of the University of Virginia School of Law where he is the David and Mary Harrison Distinguished Professor of Law and the Arnold H. Leon Professor of Law, teaching securities laws.  This is a great book and an important read.  Paul argues cogently that:
Continue Reading Why Regulation Fails