Editor's Note: This is a monthly publication on economic trends and financial policy issues. In this publication you can read "The Longbrake Letter", an analysis of economic trends and conditions written by Bill Longbrake, as well as commentary on financial regulation and policy written by members of the law firm Barnett, Sivon & Natter, P.C., a Washington, DC based law firm that specializes in financial services law.

ISSUE: #53, October 2014

The Longbrake Letter
- Bill Longbrake
In recent days market sentiment has shifted from optimism and complacency to pessimism and fear. Significant and troublesome imbalances have been building in the global economy for a long time but the threats they pose to global economic well-being have largely been ignored. But now the possibilities of much slower growth in China, failure of Abenomics in Japan, and deflation in Europe, not to mention the existential threat to the euro and the European Union, are being discussed more openly. In this month's letter Bill Longbrake explains why unfavorable demographic trends, excess supply of goods and services relative to underlying demand, monetary profligacy, negative real rates of interest, and huge and rising debt-to-GDP ratios collectively are fostering a global deflationary bust in which increases in prices and output slow, or even fall, and bankruptcy potential rises for firms and countries.

How CFPB Determines Proxies for Race and Ethnicity
- Bob Barnett
The Consumer Financial Protection Bureau recently released its methodology for establishing proxies for race and ethnicity in situations in which that data has not been reported. This methodology is not relevant to cases in which the data is directly reported, but as a methodology, it has uses in many multi-probability situations.

An AML Compliance Utility?
- Jim Sivon
This article discusses the merits of an industry utility to assume some of the burden and costs associated with AML compliance.

Action on CFPB's No-Action Letter Policy
- Katie Wechsler
The CFPB's proposed no-action letter (NAL) policy includes a detailed process for requesting a NAL, the factors the CFPB staff will consider in whether to issue a NAL, the possible responses the staff may give, and what will be included in a NAL if issued. While this is a step in the right direction, the proposed policy raises some concerns, as discussed in this article.