Happy Monday, View fans. Here’s a look at some of what I’ve been reading this morning.
Inside the SEC’s decision not to sue anyone from Lehman Brothers.
Ben Protess and Susanne Craig of the New York Times have a behind-the-scenes look at the Securities and Exchange Commission’s decision not to file claims against Dick Fuld or other former executives of Lehman Brothers. George Canellos, the SEC lawyer who supervised the agency’s investigation, said there wasn’t enough evidence. Others disagreed. Mary Schapiro, the former SEC chairman, told him “the world won’t understand.” She was right.
Fannie and Freddie may be scaling back loan sizes.
The Wall Street Journal reports that the regulator for Fannie and Freddie Mac is getting ready to reduce the maximum size of the home loans that the two companies will back. The real estate industry will be fighting it and enlisting help from friendly members of Congress who say we can’t do anything that might risk hurting the housing market. (Heaven forbid the government should ever reduce a subsidy.)
Is quantitative easing helping or hurting the economy?
Heidi Moore, who writes for the Guardian, makes the case that the Federal Reserve’s bond purchases aren’t helping create U.S. jobs: “At most, it may be possible to make an argument that the stimulus known as quantitative easing is helping Wall Street stock prices, but after three years of money-pumping, QE is evidently doing nothing to bring the country to full employment, which is one of the two tasks the Fed exists to perform.”
Another take on unemployment and the Fed.
Rich Miller of Bloomberg News writes about the decline in U.S. unemployment to 7.3 percent, the lowest level since December 2008, and notes that it occurred “because of contraction in the workforce, not because more people got jobs.” Roberto Perli, a former central bank official, says this poses a problem for the Fed because “it’s not declining for the right reason.”
A brief history of Tulip Mania.
Liberty Street Economics, the blog run by the Federal Reserve Bank of New York, has a fun post by James Narron and David Skeie about Tulip Mania in the pubs of 17th century Amsterdam, which included the spontaneous development of an extremely leveraged futures market: “By the early 1630s, the tulip was a fixture in Dutch gardens. But Tulip Mania didn’t begin until the summer of 1633, when a house in Hoorn was exchanged for three rare tulips and a Frisian farmhouse was traded for a number of tulip bulbs. The lure of profit enticed novice florists to enter the tulip trade with minimal investment and small parcels of land.” The writers offer some lessons for regulators, too.
(Jonathan Weil is a Bloomberg View columnist. Follow him on Twitter @JonathanWeil.)