Prof Does Math, Finds Banking System 'Insolvent'

Next big domestic issue will be 'fascinating' to watch

(NEWSER) - Once health care reform is “settled,” Nate Silver writes, the White House will be searching for a new domestic issue. Card check is too hard, immigration will have to wait for 2012’s “younger, more diverse electorate,” and gay rights is a slog. The winner, in Silver’s opinion, is bank reform. What's "fascinating" is how the issue has so far elicited responses from Congress that are “the strangest in the history of the institution.” More»

Healthier lenders no longer anxious to cut deals

(NEWSER) - As banks get healthier, they're getting stingier with one of the few remaining lifelines for underwater homeowners—short sales. To keep home sales moving in leaner times—and to get bad loans off their ledgers—lenders would forgive the difference between the outstanding mortgage balance and the purchase price. Such deals are harder to come by these days, a development that could spell trouble for the nascent housing recovery, writes Christopher Palmeri in BusinessWeek. More»

Krugman, Pearlstein agree: It doesn't address key problems

(NEWSER) - Barack Obama knows what caused the financial crisis, but his regulatory plan “basically punts on the question of how to keep it from happening all over again,” writes Paul Krugman in the New York Times. Obama’s plan takes the crucial step of regulating the “shadow banking” system, giving the Fed power over any systemically important institution. But it wouldn’t touch executive compensation or the ratings agencies, both of which played major roles in the crisis. More»

Proposed regulatory fixes don't actually fix much: Nocera

(NEWSER) - President Obama is hardly living up to the hype on fiscal regulatory reform, and he's not matching Franklin Roosevelt, either. When FDR reformed financial regulation, he transformed the industry, cheerfully making enemies in the process. Obama has been timid by comparison, writes Joe Nocera of the New York Times: “The Obama plan is little more than an attempt to stick some new regulatory fingers into a very leaky financial dam.” More»

(NEWSER) - Markets were mixed today as a perky health-care sector was held in check by poor performance in energy stocks and wariness over President Obama’s financial regulatory plan, the Wall Street Journal reports. Oil and commodities prices slipped as investors seemed to gird for a continued lull in consumer activity. The Dow was off 7.49, to 8,497.18. The S&P shed 1.26 to end at 910.71. And the Nasdaq rose 11.88 to 1,808.06. More»