Daily Archives: January 13, 2014

New documents reveal ‘Bridgegate’ Port Authority appointees ignored danger warnings

A port authority employee warned the bridge lane closures created safety risks, but they continued for four days:

Christie GWB scandal email


A Sept. 9 email to PA execs Bill Baroni and David Wildstein, a Christie appointee, laid out the life-threatening situation created by the punitive morning rush-hour lane closings at the world’s busiest bridge. Wildstein invoked his 5th Amendment right to avoid self-incrimination during his testimony to the State Assembly on Thursday. “Wanted you both (to) have a heads-up — Peggy Thomas, Borough Administrator, called me regarding the increased volume and congestion,” wrote PA employee Tina Lado.

NJ Gov. Christie’s “I’m not a bully” statement in his press conference on the GWB scandal brought out the demeanor of President Richard Nixon when he said in the Watergate scandal “I’m not a crook.”


Goldman 10% Return Tied to Blankfein Pay Too Low for Investors

Goldman 10% Return Tied to Blankfein Pay Too Low for Investors

Goldman Sachs Group Inc. (GS) investors want a target for annual returns — as long as it’s higher than the one that pays a bonus to Chief Executive Officer Lloyd C. Blankfein and his top deputies.

With the New York-based firm set to report a fourth straight year of lower profitability than it had in the decade before the financial crisis, shareholders are waiting for Goldman Sachs to end its status as the only major investment bank that won’t declare a public profitability target. The company’s board of directors set a 10 percent return-on-equity target for top executives to earn their long-term bonuses, a level that even Blankfein has called “hardly aspirational.”


Why I Bought A House In Detroit For $500

Why I Bought A House In Detroit For $500

After college, as my friends left Michigan for better opportunities, I was determined to help fix this broken, chaotic city by building my own home in the middle of it. I was 23 years old. 

“I wanted something nobody wanted, something that was impossible. The 
city is filled with these structures, houses whose yellowy eyes seem to follow 
you. It would be only one house out of thousands, but I wanted to prove it 
could be done, prove that this American vision of torment could be built 
back into a home.” – young Michigander Drew Philp

My first job out of college was working for a construction company in Detroit.


“We’re an all-black company and I need a clean-cut white boy,” my boss told me over drinks in a downtown bar when he hired me. “Customers in the suburbs don’t want to hire a black man.”

When a service call would come in, we would ask, “Does he sound white or black?” If it was the former, I would bid the job. If the latter, my boss would. Detroit is one of the most segregated metro areas in the nation, and for the first time I was getting what it felt like to be on the other side of that line. In contrast to the abstract verbal yoga students at the University of Michigan would perform when speaking about race, this was refreshing. And terrifying. I couldn’t hide behind fancy words any longer.

I grew up in rural Michigan, 45 minutes away from any freeway. I’m the first male member of my family in three generations never to have worked in front of a lathe, and aside from one uncle, I’m the oldest with all of my fingers intact. The university had given me some grandiose ideas like “true solidarity with the oppressed,” and I figured “the oppressed” lived in Detroit, never mind the patrimony. I thought I was making a sacrifice. I thought moving here was staying home when everyone else was leaving the state. I thought I was going to change the world and had some vague notions of starting a school. I cringe at how naive I was. I first rented an apartment in the city, sight unseen, that didn’t have a kitchen sink, so I did my dishes in the bathtub.

Aside from bidding jobs, I spent my days like everyone else: sanding floors in cheap rentals for $8.50 an hour, which got me thinking: I could buy a house and fix it up myself. Not that I was sure how to go about buying, let alone renovating a house. It was just an inexplicit dream, some trick that would keep me from leaving like everyone else, make me a true Detroiter.

Not long after, I went to a Halloween party dressed as an organ grinder. At one point I set my cardboard organ down in a corner to dance, and when I went back to get a beer I’d hidden inside it, sitting next to the organ, all knotted up and looking out of place, was a guy named Will dressed as an organ grinder’s monkey. Between his fingers he held a hand-rolled cigarette.

“You want to go outside and have a smoke?”

After the usual pleasantries, him looking nervous and fidgety, me overeager to make friends, I told him I wanted to buy a house on the city’s east side.

He answered, “I just did.”


Bagehot was a Shadow Banker: Shadow Banking, Central Banking, and the Future of Global Finance

Bagehot was a Shadow Banker: Shadow Banking, Central Banking, and the Future of Global Finance


Perry Mehrling 

Columbia University, Graduate School of Arts and Sciences, Department of Economics

Zoltan Pozsar 

International Monetary Fund (IMF)

James Sweeney 

Credit Suisse

Daniel H. Neilson 

Institute for New Economic Thinking (INET); Bard College at Simon’s Rock

November 5, 2013


At the heart of both the modern shadow banking system and the 19th century banking system described by Walter Bagehot is the wholesale money market, with the central bank providing a liquidity backstop. We characterize shadow banking as “money market funding of capital market lending” and construct a model of such a system with dealers making markets and setting prices for funding and risk. Using this model, we describe the secular expansion of the market-based credit system and its rapid collapse during the global financial crisis. The model also clarifies the economic functions of the market-based credit system, the role of the central bank in such a system, and the global character of US dollar funding markets.

CFPB Request for Information Regarding the Mortgage Closing Process

CFPB Request for Information Regarding the Mortgage Closing Process

The Consumer Finance Protection Bureau has issued a Request for Information Regarding the Mortgage Closing Process. The CFPB wants

information from the public about mortgage closing. Specifically, the Consumer Financial Protection Bureau (CFPB) seeks information on key consumer “pain points” associated with mortgage closing and how those pain points might be addressed by market innovations and technology.

The CFPB seeks to encourage the development of a more streamlined, efficient, and educational closing process as the mortgage industry increases its usage of technology, electronic signatures, and paperless processes. The next phase of CFPB’s Know Before You Owe initiative aims to identify ways to improve the mortgage closing process for consumers. This project will encourage interventions that increase consumer knowledge, understanding, and confidence at closing.

This notice seeks information from market participants, consumers, and other stakeholders who work closely with consumers. The information will inform the CFPB’s understanding of what consumers find most problematic about the current closing process and inform the CFPB’s vision for an improved closing experience. (79 F.R. 386)

The CFPB is particularly interested in responses to the following questions:

1. What are common problems or issues consumers face at closing? What parts of the closing process do consumers find confusing or overwhelming?Show citation box

2. Are there specific parts of the closing process that borrowers find particularly helpful?

3. What do consumers remember about closing as related to the overall mortgage/home-buying process? What do consumers remember about closing?

4. How long does the closing process usually take? Do borrowers feel that the time at the closing table was an appropriate amount of time? Is it too long? Too short? Just right?

5. How empowered do consumers seem to feel at closing? Did they come to closing with questions? Did they review the forms beforehand? Did they know that they can request their documents in advance? Did they negotiate?

6. What, if anything, have you found helps consumers understand the terms of the loan? (79 F.R. 387)

Submit comments on or before February 7, 2014.

You may submit responsive information and other comments, identified by Docket No. CFPB-2013-0036, by any of the following methods:

  • Electronic: http://www.regulations.gov. Follow the instructions for submitting comments.
  • Mail/Hand Delivery/Courier: Monica Jackson, Office of the Executive Secretary, Consumer Financial Protection Bureau, 1700 G Street NW., Washington, DC 20552.