Securitization and Off-Balance-Sheet SPE's

FASB is going counter to the approach on M2M and will be requiring additional disclosure for off-balance-sheet loans. This is significant because it may further reduce the credit available in the shadow banking system, as the banks that ultimately support the shadow system are now going to have to disclose their exposure.

A few other posts or articles on securitisation/shadow banking system that I've noticed today-
Marginal Revolution's take and Tyler refers to The Economist article here and also Arnold King here.

Rating Agencies on the hot seat

The rating agencies are getting their day in front of Congress. I'll be interested to see how this works out.

My hope is that they would somehow be held legally liable in the same way that auditors are when they fail to apply rigorous standards to their work.

Shadow banking system

I was actually reading chapter 7 of Animal Spirits, which provided a quick summary of the shadow banking system. I then did my scan of some blogs that I follow and found this incredibly detailed, yet not too long, post from Zero Hedge. It's probably the best description of the shadow banking system and it's role in the macro-economy that you will find.

On a positive note, there's at least some support for the idea that the shadow system is holding up and maybe bouncing back.

Fed updates

Some updated Fed data and the WSJ analysis of the CPI and deflation risk.

Dallas Fed official gives Fed pat on the back.

Risks

A couple risks-

Consumers are too debt laden to bail out the American economy, so we're dependent upon foreign trade or investment to bring America back. WSJ hopes China can help.

The risk of so much U.S. debt.

And for the 'oh, by the way' category, even tax month was negative and social security is drying up (still).

SNL on the Stress Tests

What's on my Kindle

A snapshot of what's currently on my Kindle:
Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism by George Akerlof and Robert Schiller. I just started this one and it's probably not for everyone, but as a fan of behavioral economics/finance I've found it interesting so far.

House of Dimon by Patricia Crisafulli. I was not very impressed by this book, I got it because I'm a fan of Jamie Dimon's and it started out pretty well. However, it never got below the surface and started getting very repetitive.

House of Cards: A Tale of Hubris and Wretched Excess on Wall Street by William Cohan. I liked this book a lot and it gives a rather in-depth view of the Bear Stearns culture and inner workings that led to its demise.


Some samples that I want to test before committing to the full book (and a great feature of the Kindle)-
The Return of Depression Economics and the Crisis of 2008 by Paul Krugman.
Predictably Irrational by Dan Ariely (this one I started and really liked, I'm just waiting for an updated version to be released towards the end of the month).
Lords of Finance by Liaquat Ahamed.

And I always have a Sunday New York Times and a random day of the FT, although I don't subscribe to either.