Audit Notes: Bloomberg on the Financial Protection Agency; FT’s Volcker Get; Norris Gets Almost There; Greece as Bear Stearns, etc.

—Bloomberg does a good job tracking the dimming prospects of a consumer finance protection agency, yet another indication, as far as I’m concerned, that the boiler-room culture that overran the lending business before the crash hasn’t gotten the press attention it richly deserves. (For a hardcopy of our story on this topic, write to; the link only goes to the first page.)

Bloomberg takes a darker view of the agency’s prospects than this Wapo story, which also reports on, and tries to divine the implications of, Chris Dodd’s decision to bypass ranking Banking Committee Republican Richard Shelby and talk to Bob Corker. The Post reports that Corker sees room for compromise.

—The FT keeps the spotlight on Volcker; that’s always a good idea. In this case, the former Fed chairman lays down the implication of the proposed “Volcker Rule” that would separate insured deposits from proprietary trading.

Goldman Sachs and other banks should give up their bank status if they want to avoid the ban on proprietary trading proposed by the White House, Paul Volcker, head of President Barack Obama’s Economic Recovery Advisory Board, said.

—Floyd Norris takes readers only part of the way in a column drawing attention to breathtakingly shoddy auction-rate securities that were nonetheless wildly popular before the crash. After making a strong case the securities were disasters waiting to happen and could not reasonably be understood even by professionals, the conclusion falls a little flat:

It was an era of trust. Because that trust is not likely to return quickly, those who want to revive the securitization market have an uphill road ahead of them.

We know there was a lot of bad paper out there, and that a lot of pros bought it anyway; what do we do about it?

-Breakingviews offers the Bear Stearns bailout and sale as an analogy for what the Europeans are trying to manage with Greece. The question then and now, the piece says, is how to help out one of your weaker links without encouraging moral hazard and “further contagion or complacency.”

That helps.

—Economists surveyed by the WSJ say “a quarter of the 8.4 million jobs eliminated since the recession began won’t be coming back and will ultimately need to be replaced by other types of work in growing industries.”


—On a lighter note, we appreciate Naked Capitalism’s spin on a Steve Schwarzman Op-Ed piece in The Washington Post today.

Schwarzman Says Kowtow to Banks or They Will Strangle the Economy

Can someone shut these banking industry narcissists up?

Apparently, not.

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Dean Starkman Dean Starkman runs The Audit, CJR's business section, and is the author of The Watchdog That Didn't Bark: The Financial Crisis and the Disappearance of Investigative Journalism (Columbia University Press, January 2014). Follow Dean on Twitter: @deanstarkman.