Fama On Bank Recapitalization

There were many factors to consider when choosing an MBA program, but the truth is that I settled on the University of Chicago because that's where I could study under Eugene Fama. The two classes I took with him have proven well worth the price of admission (I am not receiving a referral fee from the University).

Fama has recently started a blog (with his colleague Kenneth French) which is the latest addition to my must-read list. His most recent piece on bank recapitalization discusses the impact that various forms of equity injections have on the U.S. taxpayer and bank stakeholders. It's not the lightest read, but he makes some very good points.

Link to article

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The Market Rubbernecker is affiliated with Aspera Financial, LLC, a registered investment advisor. Please read the disclaimer on the home page of the Market Rubbernecker site.

Paul On Regulation And Ponzi Schemes

One of the very few congressmen who understands economics, monetary policy, fiat currency, regulation, inflation, and moral hazard. His point about the SEC is similar to that made here in my December 16th Madoff post:

As for the regulators, they clearly and spectacularly failed -- again. Unfortunately, this will lead to calls for broader and deeper regulation. Regulation fails? Then we must need more! I imagine a number of Madoff investors took some comfort in knowing that the SEC had investigated Madoff and signed off. Perhaps if the SEC didn't exist, investors would have spent a little more effort themselves looking into his operation. Alas, the SEC is likely to benefit from its amazing failure by being given even greater funding. Perhaps the defrauded investors will sue the SEC for negligence.

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The Market Rubbernecker is affiliated with Aspera Financial, LLC, a registered investment advisor. Please read the disclaimer on the home page of the Market Rubbernecker site.