As is our tradition here at Crunched Credit, each year, about this time, we award our Golden Turkey Awards. Once again, I must say that we are blessed, blessed with so many worthy candidates. Our government, our courts, the regulatory estate both here and in Europe and around the world and the political class in general have once again vied with verve and imagination and breathtaking persistence to win a spot on our acclaimed list. For those of you who we must disappoint, please accept our heartfelt apologies. Yes, you screwed up and did stupid things breathtakingly well, just not as well as this year’s winners.
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HVCRE: Surrender Is Not An Option
The way the new Basel III High Volatility Commercial Real Estate Lending Rule (HVCRE) was crafted, and is being enforced, is insane. We’ve written about this before. This is one of the purest examples of the regulatory apparatchik’s mule-headed refusal to look at data or engage with the banking establishment to develop thoughtful and effective rules. I think I saw a thoughtful and effective rule once.
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Risk Retention: Flash – These Rules Don’t Work!
As we begin to close in on the initial implementation of the Risk Retention Rule, we are looking beyond the headlines and trying to figure out how the Rule will actually work. The result is troubling.
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The Regulatory State: May We Have A Little Humility, Please?
The Great Equity Correction of 2015 that is now being enjoyed by all of us is a correction, and not the beginning, of the Great Bear Market of 2015 (from my lips to God’s ears). It reminds me of just how little we know about how all complex systems, like the global financial market (and don’t get me started on climate), function. Nonetheless, our Regulatory State behaves as if this was not true and as if wise governmental types can simply declaim new rules and regulations to get their very specifically-designed outcomes.
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The EB-5 Visa Program: the Rebirth of the Immigration Investor Program
This is a good news story for once. But, of course, since the father of this soupcon of good news is our government, it’s almost unintended.
From the ashes of the economic recession of 2008 came the rebirth of the Immigration Investor Program, more commonly known as “EB-5 Visa Program.” This bit of social engineering has been around since the program was first introduced back in 1990 but got a second wind when everything else went to Hell. The purpose behind the program was to benefit the United States economy by attracting investments from qualified foreign nationals.
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Crowdfunding: The Next Commercial Real Estate Frontier?
In a world where we buy groceries, book travel, and even date online, it should come as no surprise that online investment is becoming increasingly prevalent. The rapid shift towards an internet-centric world has made crowdfunding the next “big thing” when it comes to raising capital and finding investment opportunities.
What is Crowdfunding?
In the most basic sense, crowdfunding is a means of raising capital by seeking small amounts of money from a large number of individuals. There are hundreds of websites that act as intermediaries between the investors and the businesses and/or individuals, and provide a platform for the exchange of information and funds to happen in a systematic (and hopefully more legitimate) way.
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Mrs. Yellen, What in the World Are You Doing?
Is the Federal Reserve overreaching by broadening the scope of its policies?
If extremism in the defense of liberty is (reportedly) no vice, unremitting, continuous undisciplined chatter for the sake of transparency is no virtue. God knows transparency has become the sine qua non of public ethics these days. To be accused of not being transparent is pretty much the same thing as being accused of being an anti-Semite (with notable exceptions for certain parts of the world). When it was reported recently that Mrs. Clinton had used a private email address as opposed to an official State Department email, someone suggested that this evidenced a lack of transparency. The democratic establishment shuddered, only matched by the glee over at Fox News.Continue Reading Mrs. Yellen, What in the World Are You Doing?
Regulators: It’s in Their Nature
Here’s one from left field that I only began to focus on recently. In mid-December, the gnomes of Basel published several “Consultative Documents” on bank capital and credit risk issues. First of all, I’m somewhat suspicious by the open palmed amiability of something called a “Consultative Document.” That suggests a dialogue with regulators but this is Euro-speak for “Proposed Rule.” My experience is that once something gets to the Proposed Rule stage, the relationship between the regulatory and the regulated is short on consultation and long on prescription. But hey… maybe this is different.
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The Continuing European Banking Crisis and Hidden Capital Shortfalls
Who says that Europeans don’t get Halloween? After more than a year in the making, the European Central Bank (“ECB”) just finished its most recent stress test and found that pretty much everything was kinda OK. Sure, a few banks here and there in the nether regions flunked, but perhaps with the exception of that most wonderful Banca Monte dei Paschi di Siena, no one flunked that badly.
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The Grand Illusion: A Strategy
Have you heard the following thought expressed recently in one way or the another, “I’m less worried about what new black swans might swim onto our screens and more worried that we will just wake up one day, peer out of our bunker of habituated indifferences to the drumbeat of troubling news and decide, suddenly, that things actually are terrible!” Bad news seems to pile upon bad news in the larger world. We are off the map of the known universe in terms of monetary and fiscal norms, and yet when the last worse headline comes across the ticker, and the newsreaders do their level best to create drama, the debt and equity markets seem to, well, yawn. What happens if one day we wake up and all of a sudden all that which was benign yesterday is terrible today? It’s like one of those sci-fi movies where the doughy earthlings encounter a race of beautiful, peaceful people and then, in a blink, see them as the multi-arm, walking crustaceans with eyes on stalks and a distinct preference for space hero tapas that they really are.
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