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Just when you thought it was safe to go out at night again, another reason not to deploy capital is slouching into Bethlehem. We’ve written a lot here at CrunchedCredit about the Damian-like progeny of Dodd-Frank and Basel, but we’ve let this one slip through the cracks. And, boy, oh boy! – We need to pay attention to this thing. We’re talking FASB.

Okay, so what’s this all about? The story starts in Norwalk, Connecticut back in the 1970’s. The accounting industry at that time, chartered a private institution known as the Financial Accounting Standards Board (FASB) to establish financial accounting and reporting standards for public and private companies complying with Generally Accepted Accounting Principles (GAAP). A powerful organization was born. FASB still sits today in leafy Norwalk, Connecticut and generally beavers away in relative obscurity, tinkering with GAAP standards, both large and small. Periodically, however, the Board tosses a Zeus-like bolt of lightning from on high masquerading in the clothing of dry, dusty guidance to auditors which fundamentally changes how business is conducted. (Btw, let me tell you, Norwalk makes a pretty crappy Olympus).Continue Reading Let’s Just Fess Up and Agree, Loans are Dodgy Things:  FASB’s New Growth Killing Rule on Loan Losses

Since 2015, we here at Crunched Credit have tracked, followed and discussed the developments (or lack thereof) concerning the Immigration Investor Program, more commonly known as the “EB-5 Visa Program.” Throughout the past year, we’ve witnessed the approval of several extensions of the EB-5 Visa Program and in each instance, no substantive changes were included—these extensions were solely put in place in order to prevent the expiration of one of the most successful investment programs.
Continue Reading New Year! New Administration! Same EB-5 Dilemma!

What if Dodd-Frank and Basel III were to largely go away? Eliminating Dodd-Frank has been a hobbyhorse of Representative Hensarling, the chair of the House Services Committee, for several years and has figured prominently in President Trump’s campaign talking points. But the conventional wisdom has been that any sort of transformational uprooting of the Dodd-Frank and Basel III thicket was unlikely.

That’s what I thought, too. In fact, I have bloviated to that point in the press and on podiums many times. From the moment when everyone’s thinking was refocused that November 9th morning, I had thought that while major disruptions of many things were in the cards, Dodd-Frank and the Basel III architecture really weren’t on the menu. Now I’m starting to wonder. Sure, I still think major retrenchment is not going to happen, but my conviction that it’s impossible is what now gives me pause. Let’s face it, while rarely in doubt, I’m wrong a lot.

So just in case I am wrong, yet again, and some version of repeal or replace happens for Dodd-Frank and Basel III is rejected or slow-walked to death, what might that mean? It’s time to start planning for alternative facts.
Continue Reading Alternative Facts? A World Without Dodd-Frank and Basel III

This is all about the difficulty of taking the punch bowl away from a roaring good party. Over the past several weeks a number of major banks folded under enormous pressure from the US DOJ to settle fraud claims resulting from the sale of bonds prior to the financial crisis of 2008. The allegations here were that, as they have been in many many cases over the past several years, the banks knowingly sold bonds backed by crappy residential mortgage loans. Apparently, no one else had a clue that this stuff was crap! Who knew? These last suite of deals were relative bargains for the banks because, reportedly, the DOJ was highly motivated to get these deals done before Mr. Trump took the helm at the White House.

For some reason this calmed investors’ concerns.

I don’t get it.
Continue Reading Hey Guys, Let’s Sue a Financial Institution! Our Government at Play

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

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