What we’re reading (3/21)
“Anxiety Strikes $8 Trillion Mortgage-Debt Market After SVB Collapse” (Wall Street Journal). “Last week, the risk premium on a widely followed Bloomberg index of agency MBS hit its highest level since October, when climbing interest rates turned global markets topsy-turvy. The move reflected fears that other regional banks might have to sell their holdings, bond-fund managers said.”
“Home Prices Just Broke A Decade-Long Streak” (CNN Business). “The median price of a US home was lower this February than it was in February 2022, ending more than a decade of year-over-year increases, the longest on record, according to a National Association of Realtors report released Tuesday.”
“An Insider Deconstructs ESG” (Law & Liberty). “Debates about business’s proper ends and responsibilities are not new. Many in the financial sector have been persuaded that ESG will allow business to continue generating wealth while also playing a positive role in society in ways that go far beyond the world of supply and demand. The problem, [former BlackRock Managing Director Terrence] Keeley says, is that ESG simply does not deliver.”
“Investigate The Bank Failures” (Luigi Zingales in City Journal). “In a speech last week, President Biden reassured the public that those responsible for the failure of Silicon Valley Bank (SVB) and Signature Bank will be held accountable. In the 2008–09 Financial Crisis, this did not happen. For Biden’s promise to be more than rhetoric, his administration must take a proactive role. As the last crisis showed, the normal mechanisms of accountability are broken. Banks paid billions of dollars in fees, but no CEO, board member, auditor, or regulator went to jail. Aside from a few CEOs, nobody even paid a fine out of his own pocket.”
“First Republic Bank Taps Lazard For Help With Review Of Strategic Options” (Wall Street Journal). “Lazard and McKinsey have been brought in alongside JPMorgan Chase & Co., which had already been hired by First Republic to advise on moves the bank could make to regain its footing after the failure of two other lenders caused its depositors to flee.”
