I had fun in this conversation with conservative Bruce Bartlett, even though he stole some of my best lines (like Obama not being a liberal). Bartlett is in exile from the Republican party for saying things like Keynesian deficits stimulate the economy (after doing research and finding he couldn’t debunk it based on data) and unions help promote higher wages.
Read more...Yves here. One of the things that has too often gone missing in the many discussions of why massive scale money launderer HSBC was not prosecuted is the basis of the “doing that would be destabilizing” excuse. When a company is indicted (mind you, indicted, not convicted), pretty much all Federal and many (most?) state agencies are required to stop doing business with it, immediately. The effect of the loss of so much business, particularly for a large financial firm, is seen as a death knell.
Of course, that’s the point.
Read more...I’ve read the Department of Labor complaint of former Deutsche Bank employee Eric Ben-Artzi that, among other things, alleges that the German bank violated SEC, GAAP and IFRS (International Financial Reporting Standards) requirements and probably also Sarbanes Oxley, and have had follow up conversations with him and his counsel. The charges are specific and sufficiently well supported to merit serious investigation. In their efforts to dismiss his charges, defenders of the bank’s position overlook the public reporting requirements for complex financial transactions like the one in question, a leveraged super senior (LSS) trade. Nor does their Panglossian “everything worked out for the best” argument stand up to scrutiny.
Read more...Bankers are now hoist on their own austerity petard. The fact that ordinary citizen all across the Eurozone are seeing lower incomes, lower levels of social services, and can expect only more of the same seems to have led to a sudden outburst of resolve to make sure that bankers take the pain along with everyone else.
Read more...This talk may be too TED-ish for some readers’ tastes. But I happen to have a weakness for plummy accents and theaterical delivery. And even though it’s not even in theaters, I believe an antidote to Zero Dark Thirty is in order.
Read more...American Banker has an article up that is astonishing in that it tells us that the main regulator of national banks, the OCC, has confirmed one of our ongoing complaints: that the controls at the biggest banks are inexcusably weak. The OCC is the last place you’d expect to hear this from; historically it’s been a major enabler of banks playing fast and loose with the rules. And the implication is that bank execs should be wearing orange jumpsuits rather than getting multi-million pay packages.
Read more...By Neil Barofsky, former Special Inspector General for the Troubled Assets Relief Program, currently a senior fellow at the NYU School of Law and the author of Bailout. Cross posted from The New Republic with author permission
You can be forgiven if you watched the Department of Justice’s announcement yesterday of a $1.92 billion settlement with HSBC with a sense of disappointment–and déjà vu.
Read more...Occupy the SEC submitted an amicus brief in Gabelli v. SEC, a case before the Supreme Court. The plaintiffs are appealing a Second Circuit decision over the issue of the statute of limitations.
Read more...As the Eurozone flails about to keep its chin above the debt crisis that is drowning periphery countries, and as the European Union struggles to duct-tape itself together with more “integration,” that is governance by unelected transnational eurocrats, Sweden is having second thoughts: never before has there been such hostility toward the euro.
Read more...Stephanie Kelton and Lauren Lyster of RT discussed Modern Monetary Theory with Kelton parsing out the prescriptive from the descriptive elements.
Read more...Believe it or not, sometimes I’m not cynical enough.
Read more...A default position among what passes for finance cognoscenti in the blogosphere is to argue that media stories pointing up bank improprieties are making a mountain out of a molehill. The form of the argument is usually, “If you only understood XYZ technical issue, this is not such a big deal.” Now that isn’t to say that position is wrong; we’ve more than occasionally made just that type of argument. But if you are going to go that route, it’s incumbent on you to take account of the relevant background; otherwise, whether you intend to or not, your argument can wind up being the equivalent of “Look, over there!”
We’ve seen this type of diversion-as-argumentation take place on the brewing Deutsche Bank scandal over losses that three separate whistleblowers allege that that bank hid from investors during the crisis. Matt Levine and Felix Salmon say, to use Levine’s turn of phrase, that all the German bank did was ignore the losses until they went away. That is a misrepresentation of what actually happened.
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