Category Archives: Banking industry

Reps. Alan Grayson and John Conyers Call for End to Bank Welfare, Tough Rules on Bank Capital

Congressmen Alan Grayson and John Conyers have published a well-thought-out proposal on bank equity, with the objective of assuring that when banks do stupid things (which they do with great regularity, even before the era of casino banking, they’d embrace some new fad and run off the cliff together, like lemmings), they have enough capital to absorb losses. And that means a lot more capital than regulators are demanding they have now.

So I urge you to co-sign their letter (full text below) at http://nobankwelfare.com/.

Mirabile Dictu! Bank of America Found Guilty of Fraud for “Hustle” Mortgage Lending Program

Don’t get too excited.

The Ridiculous “Jamie Dimon as Victim” Meme on the Pending JP Morgan Mortgage Settlement

Nothing like having a credulous, leak-dependent media to carry your messages.

French Officialdom Now Discussing Eurozone Exit

Just because a taboo has been broken does not necessarily mean that more radical action is in the offing. But the flip side is that, while we’ve been busy following debt ceiling and budget hijinx in the US, there are some surprising developments on the other side of the pond. One is that, as anti-Euro candidate Marine Le Pen is leading in polls in France, respected members of its ruling bureaucracy are deeming the Euro as a failed experiment and presenting detailed plans as to how an breakup could be executed.

Mind you, the Eurozone has been limping from crisis to crisis for so long that it’s hard to take new signs of trouble seriously.

So How Big a Deal is the Pending “$13 Billion” JP Morgan Settlement?

One of the big news stories of the weekend is that JP Morgan and the Department of Justice, brokering a settlement of liability across multiple Federal agencies, have reached a tentative $13 billion settlement on the bank’s mortgage-related conduct in the run-up to the crisis. But the size is not necessarily a metric of accomplishment.

Whistleblower Suit Confirms that the New York Fed is in the Goldman Protection Racket

On Thursday, a former bank examiner at the Federal Reserve Bank of New York, Carmen Segarra, filed a suit (embedded at the end of this post) against the New York Fed and several of its employees alleging, among other things, improper termination. The complaint is a doozy and some of the additional details supplied by Segarra to ProPublica make an already ugly picture look even worse.

Calling on Yellen: Time for a Modest, Dull Fed

Most of the news accounts of Obama’s nomination of Janet Yellen as the next Federal Reserve Chairman focused either on what type of monetary stance she was likely to take or on biographical details.

But some writers have used the upcoming changing of the guard at the Fed to look at the bigger question of the Fed’s role, particularly now that it has continues to intervene in financial markets to an unprecedented degree, a full four years after the worst of the financial crisis had passed.

Yanis Varoufakis: Johnny (Paulson) Got His Gun and is Aiming at Bigger Subsidies for His Greek Bank Investments

Yves here. A couple of days ago, we linked to a Financial Times story that featured hedge fund investor John Paulson talking up his investments in the two large Greek banks, Alpha Bank and Piraeus Bank. As a savvy investor buddy once remarked, “When some is talking up something they own, be on the watch that they are actually selling.” In this case, as Varoufakis describes, what Paulson is actually pushing for is for the Troika to change the pricing of warrants on his Greek bank investments because they aren’t providing the big payoff he wanted. So he is indeed “selling” in that he wants his payday now but needs to get official bodies to give him even more subsidies to get there.

Former Representative Brad Miller: Naked Capitalism – My Hot Sheet on Finance

Matt Taibbi described in “How Wall Street Killed Financial Reform” the many ways “the banks strangled the Dodd-Frank law,” including the effort by House Republicans after the 2010 election to “pass a gazillion loopholes.”

“You might wonder,” Taibbi wrote, “how a bunch of lunkhead Republican Congressmen would even know how to write a coordinated series of ‘technical fixes’ to derivatives legislation, a universe so complicated that it has become hard to find anyone on the Hill who truly understands the subject. (One Congressman who sits on the Financial Services Committee laughingly admitted that when the crash of 2008 happened, he had to look up ‘credit default swaps’ on Wikipedia.)”

Yeah, that was me.

How the Foreclosure Crisis Made the Rich Even Richer

This is Naked Capitalism fundraising week. 52 donors have already invested in our efforts to shed light on the dark and seamy corners of finance. Join us and participate via our Tip Jar or another credit card portal, WePay in the right column, or read about why we’re doing this fundraiser and other ways to donate, such as by check, as well as our current goal, on our kickoff post.

It’s a welcome departure to see Adam Davidson’s weekly column in the New York Times, which usually puts a happy face on how the 1% are winning the class war in America, have a guest writer look at the other side of the story.

David Dayen: Justice’s Deceit on the JPMorgan Settlement, and Why Ed DeMarco Should Get Some Apologies

The moral bankruptcy of the Justice Department’s fake crusade against JPMorgan Chase was always fairly obvious, considering that the Attorney General is holding private meetings with Jamie Dimon, the chief potential suspect in a criminal case (hey, at least those talks were “constructive”). Just yesterday, Dimon walked into the White House to meet with the President, afforded the respect of an elder statesman. The idea that he’s under “attack” is absurd.

But this has now burst into the open with Justice’s desire to stick the FDIC with half the bill:

Monetary Policy Implementation: Some Facts and a Monetary Myth.

Nathan here. Tonight I’m moderating an event on monetary policy implementation at my University, the University of Ottawa. We will have three speakers, Donna Howard, Eric Tymoigne and Marc Lavoie. The event will begin about 5:30 and will probably finish- at the latest- by 7:30. Donna Howard is a former head of financial markets at […]

Why the US Mortgage Market Will Remain Heavily Dependent on Government Support (Updated)

In Senate Banking Committee testimony today, Georgetown law professor Adam Levitin explains why the private label (non-government guaranteed) mortgage market is a textbook case of what Nobel prize winning economist George Akerloff called a “market for lemons”.