News From 2002

16 03 2017



Groups call Enterprise Bank minority lending commitment ‘groundbreaking’

Community groups describe as “groundbreaking” a new community benefits agreement with Enterprise Bank and Trust that commits to lending hundreds of millions of dollars in low-income areas.

And then, blah blah blah blah blah minorities.

Spoiler alert:  It ends with a yuge financial crash followed by a great recession followed by Enterprise Bank and Trust going belly-up.


“Legacy of Slavery”

17 08 2016


It really does say that.

Even though this is a report by the St. Louis Fed, it’s a report about the whole country, not just the St. Louis area.  The St. Louis branch of the Fed specializes in research and reporting.  Until recently, it’s where we got BOGUMBNS (aka M0) reporting from, to expose the vast increase in physical cash circulating as a result of quantitative easing.  “Until recently,” because they no longer report it.  I guess we’re not supposed to know certain things.

I don’t have the time or ability at this moment to give serious brain power to possible flaws in their methodology, but I want to note that this is interesting:

The analysis aimed to examine a general assumption that high-risk borrowers — blacks, Hispanics, the young and the less-educated — regularly employ bad choices and risk-taking behaviors when taking out loans.

“A general assumption?”  From whom?  By whom?  I know I assume it, and I know you assume it.  But that’s because we’re part of the untouchable untermenschen of the alt-right.  Official polite society does not allow us to think about these things or even know these things.  So, if STL Fed is thinking that this “general assumption” is pervasive such that they must refute it, then it must be because people are coming to the conclusion on their own, not because they are officially instructed to think that.  As you can infer from this article, we are officially instructed to discount that.

Just as an ice breaker, I think the main problem with this methodology is that its authors think there’s a necessary Berlin Wall between “bad choices and risk-taking behaviors” and “financial circumstances.”  When in reality, the former can affect the latter, and the existence of the latter can be evidence of but is not necessarily proof of the former.

Also, they tell us about blacks, Hispanics and whites.  But not about Asians, curiously.


Wrong Evidence

18 08 2015



St. Louis Fed official: No evidence QE boosted economy

The Federal Reserve is putting some of its post-crisis actions under a magnifying glass and not liking everything it sees.

In a white paper dissecting the U.S. central bank’s actions to stem the financial crisis in 2008 and 2009, Stephen D. Williamson, vice president of the St. Louis Fed, finds fault with three key policy tenets.

Specifically, he believes the zero interest rates in place since 2008 that were designed to spark good inflation actually have resulted in just the opposite. And he believes the “forward guidance” the Fed has used to communicate its intentions has instead been a muddle of broken vows that has served only to confuse investors. Finally, he asserts that quantitative easing, or the monthly debt purchases that swelled the central bank’s balance sheet past the $4.5 trillion mark, have at best a tenuous link to actual economic improvements.

It takes St. Louis to bring some sense to the world.

Even though, ironically, last year, the St. Louis Fed quit releasing BOGUMBNS data.

Williamson is looking at it the wrong way.  It’s not that quantitative easing was supposed to improve the economy but somehow didn’t, it’s that quantitative easing was meant to keep stock indeces higher than they would otherwise be, and that it has.


Bad Mood

17 08 2015


Moody’s docks the city’s credit rating, because…

The agency attributed the St. Louis downgrade to the “city’s weak socioeconomic profile; reliance on earnings taxes which are due for voter reauthorization in 2016; a relatively narrow financial position; and a high debt burden.”

The reason why the city earnings tax is up for voter reauthorization next year is because of 2010’s Proposition A.  I think Moody’s is worried for nothing if they think city voters will vote to do away with the earnings tax.  It’s just that I think that there was an ulterior motive behind Prop A.  (And while you’re there, you’ll find what turned out to be a spot on prediction about someone who used to be in Congress from CD-2).

That Problem Was Solved Six Years Ago

20 07 2015


Seattle Mayor be like:  How can we get Muslims to have mortgages when Shari’ah forbids interest?

Minnesota be like:  We know! We know!

Market Opportunity

26 03 2015

Birmingham, Alabama


Obama Delivers a Warning, the Link Between Payday Lenders and Wall Street


Obama’s choice of Alabama to pitch new regs on payday lending was no accident: the Southern Poverty Law Center reports that there are four times as many payday lenders in the Heart of Dixie as McDonald’s restaurants, and the high poverty rate makes for easy pickings. At the same time, the think tank Demos says the predatory lenders tend to feed on poor black communities, where the promise of easy money without a credit check is tempting bait. But the profits from the lenders flows straight to Wall Street – one key reason industry lobbyists are continuing to fight the new regulations. That includes defeating a cap on astronomical interest rates, described as the Holy Grail of consumer protection advocates.

This is a little bit weird.  Baraq Obama is about as much of a WS whore as any President has been in my lifetime, yet this is the same Baraq Obama that is trying to choke off the payday loan industry among other industries using Operation Choke Point.  I wonder what the scam is.

However, one of my many axioms is that people usually get the interest rates they deserve.  If there was money to be made in drawing loans to the Bellcurvii of Alabama and charging lower interest rates than the payday loan joints, then someone would be doing it.  Especially in today’s economy where it’s hard to find a place to park money at anything close to an interest rate, much less a decent one.

Wrong Building

5 03 2015



Don’t raise rates, protesters tell St. Louis Fed

About a dozen chilly protesters gathered outside the Federal Reserve Bank of St. Louis on Thursday to complain that the Fed may soon make it harder to find work.

The Federal Reserve is widely expected to raise interest rates later this year, a move intended to prevent inflation in years hence. The protesters complained that higher interest rates can also cut off the jobs recovery.

The Fed represents “the 1 percenters,” said Derek Laney, an organizer with Missourians Organizing for Reform and Empowerment. “They are the big banks, the big corporations, and their mandate is to keep inflation low at all costs.”

You would have done better to hold this protest in New York.  That’s where these decisions are made.  The St. Louis Fed mostly does data gathering and research.

This isn’t 1875 anymore; St. Louis doesn’t that much matter nationally.

BTW, MORE, inflation hurts people on fixed incomes.