naked capitalism

Anonymous says:

Looks like the whole clearing system is breaking down.

Saw where BAC is suing LEH for return of nearly $500 MM in collateral.

I had always thought that collateral was sacroscant (at least remote from bankruptcy) — now that myth too seems to have been exploded.

Richard Kline says:

‘Ibanks Preying on Their Weaker Peers.’ Nothing, but nothing that has occurred in actions by top tier financials in the past year would pass a decent criminal investigation, in my view. It begins with fraud and failure of fiduciary responsibility in-house, and only expands in ripples of sewage outward. —And these are the folks we are about to transfer the meat part of $700B++ to. . . . But an investigation “Would have taken too long to avert panic.” Which panic is in large part augmented, to use an undeservedly neutral term, by same parties/recipients. *yecchhhh*

We really _have_ forgotten everything learned in investigating the Crash of 29, Thrash of 30, and Fraud of 31. But then, Americans much prefer mystery to history.

Matt Dubuque says:

Nice potpourri of articles today Yves. Thanks. The extended and insightful discussion on China was most welcome.

Although we have had some different perspectives on various matters, I wanted to thank you for your hard work.

Your blog is one of my primary news sources each day.

Matt Dubuque

Anonymous says:

When JP Morgan gets the dagger out no one seems to notice. Thats why they call it the invisible hand! Seriously, folks, this does have the feel of an Agatha Christie novel. Class A Fed owners conspiring to consolidate their positions of power. The origins of the House of Morgan are , of course, British. When it comes to central banking the colonies are still quite naive.

bondinvestor says:

jamie's involvement in WaMu was despicable.

first, he spent 6 months trashing KK to investors after Kerry rejected his $3-5/share offer in favor of the TPG-led recap.

at the same time, he was constantly on the phone to the folks in washington telling them he'd be happy to take WaMu off their hands at no cost to the taxpayer.

along these lines, there was a rumor that was floating around the financial markets a full 2 weeks before the run started that dimon was teaming up with schumer to force the FDIC to hand over WaMu to JPM.

then there is the fact that – according to folks inside of WaMu – the cumulative loss scenarios JPM used in their accretion/dilution analysis are exactly the same – down the decimal point – that the rating agencies used in their downgrade of WaMu. again, according to folks inside wamu, it was the rating agency downgrade that led to the $17B deposit outflow that was the justification for the seizure.

i haven't talked to anyone who follows financials closely for a living who thinks that the line of BS the FDIC & JPM are feeding the public is the truth.

most investors think that JPM teamed up with the FDIC & rating agencies to start a run on the bank that would provide grounds for the seizure of WaMu from its rightful owners.

i'd also add along these lines that there are more than a few investment professionals who think that WFC had the highest bid for WB all along, and that the FDIC was trying to force the company into the arms of citi in order to strengthen the latter's balance sheet.

these regulators are unbelievable. they are running roughshod over private property rights in an attempt to re-organize the financial system in the manner that they think is 'right'.

if they are so concerned about the system being able to provide capital to support the economy, they should consider nationalizing all the money center and regional banks. that's a much more effective – and fairer – solution than the ad hoc social engineering these guys are attempting.

pitiful. bernanke may emerge with his reputation intact, but paulson certainly won't.

FairEconomist says:

More fishy stuff with JP Morgan and Lehman: shortly after the bankruptcy the Fed loaned Morgan $87 billion which was in turn lent to the corpse of Lehman. This was followed by another $51 billion (IIRC) the next day. This stuff was in the news and has gotten comparatively little comment, especially in view of the enormous sums – larger than the AIG bailout, even.

The Fed has basically hired Morgan to clean up the Bear, Lehman, and Wamu messes. That’s sounding like a pretty cozy little relationship.