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In the months ahead, there will be a renewed intensification of the European debt crisis that could have major implications for the US economy.

One of the many requirements of the Dodd-Frank Act is that all federal agencies must remove references to and reliance on credit ratings from their regulations and replace them with alternative methods for evaluating creditworthiness. 

According to recent press reports, the Securities and Exchange Commission (SEC) is considering releasing a controversial proposal to impose additional capital and liquidity regulations on the $2.7 trillion money market fund industry (MMMFs) and to replace the fixed $1 net-asset value ("par value") rule now used by all MMMFs to redeem customer funds with a mark-to-market (NAV) requirement. 

A potential European banking crisis would spill over to the US financial system, which has very close links to the European banking system.

National Mortgage News (December 19) asks, "Can Regulators Prevent the Next Systemic Risk Crisis?" Probably not.  Certainly not, if they can't even define the central term, "systemic risk."  As Donna Borak writes, "The chief obstacle to heading off systemic risk turns out to be agreeing on a definition for...

Romney's negative attacks are an attempt to get them to focus on the qualms many former Gingrich colleagues have about him. It's a risky move, but probably not as risky as Obama's.

Europe's banks and entire monetary system are in crisis from the sovereign debt of financially weak governments.  But the capital requirement for banks to hold such Euro denominated debt was zero.  It was defined as "risk free," but has instead led to massive losses.

From the perspective of the corporate profit and loss statement, a trading loss is one expense item in the context of all revenues and expenses. So $2 billion should be compared to the bank's $26.7 billion in pretax profits for 2011, suggesting a reduction of something less than 10 percent in annual profit.