Friday, April 05, 2013

Bad Economics .... Enough Of This SIRRT !!!

M-I-C-K-E-Y  S-I-R-R-T !!!
Know you're tired of talking about something as obscure and obtusely silly as the Supervisory Interest Rate Risk Threshold (SIRRTratio; but  it is a regulatory Bushmaster - of unknown origin - now pointed threateningly at the heart of every credit union .  
Welcome to the "Newtown" NCUA!

SIRRT is now the vital
" bottom line"
at NCUA !
As you will recall from the 4/2/2013 post, SIRRT is the new delusional ratio made-up by  the NCUA to determine the "threshold" at which CUs develop an acute case of "heightened interest rate risk".  What NCUA has determined, if we cut directly to the chase, is that the "heightened" IRR threshold occurs when the average CU has more than 10% of its assets in mortgages and investments with a maturity > than 5 years - which is patently absurd from any objective, historical or statistically honest interest rate risk perspective. 

Absolutely embarrassing, but also quite frightening when the ratio is wielded so indiscriminately, like a regulatory Bushmaster, by The Unaccountables !   

But where do the  NCUA senior examiners (at least in the infamous Region 3), get "vital"charts like these?  Where does this "stuff" come from?
NCUA SIRRT-ified !!!

Take a close look at the heading on the last chart. These are official rankings by none other than those colorful "Alexandrine Robusterians*" at the NCUA "OCE" !! 

Better known, far and wide, as the....

...Office of the Crayola Economists !!!

(*Robusterian, n - English; see "robust",  meaning "written by an idiot".) 


Anonymous said...

Maybe the Crayola Economists at NCUA should determine whether Interest Rate Risk or Piss Poor Management decisions cause the last problem. Armed with this ratio will the Examiner shed light or just cause an unnecessary discussion. There is no ratio that can fix stupid.

Anonymous said...

Why won't someone ask CUNA to explain this stuff to the rest of us? Do they support NCUA on this line of thinking?

Anonymous said...

Ncua needs to be put in time-out !

Anonymous said...

..c-k-e-y ... m-O-u-C-E.