Category Archives: Banking industry

Audit the Fed Bill: Attempted Saturday Night Massacre Underway

So get this, sports fans: the day (or maybe two max) before the so-called Audit the Fed bill (a bipartisan initiative to increase transparency) has a torpedo shot at it by a member of the House Financial Services committee, one Mel Watt of North Carolina. Of course, his amendment professes to increase transparence too, but […]

Very Abbreviated Takedown on SIGTARP Report on AIG CDS Payouts

Dear sports fans, your humble blogger, along with a ton of others, got the not-very-embargoed copy of the SIGTARP report on the New York Fed’s conduct with respect to its full payout on AIG’s credit default swaps to its counterparties. The press is treating the report as if it was tough. I was sputtering with […]

“Dudley and the Missing Lessons of the Financial Crisis”

By Richard Alford, a former economist at the New York Fed. Since then, he has worked in the financial industry as a trading floor economist and strategist on both the sell side and the buy side. On Friday, William Dudley, President of FRBNY, gave an excellent presentation on the financial crisis. The speech was a […]

Bank of America Foreclosure Shenanigans?

About a week ago, I got this message from a reader: I heard a rumor from a very well placed source that BOFA will foreclose 500,000 houses over the next 10 months. They plan to move these houses very aggressively; they will go to auction 90 days from foreclosure if they are not sold by […]

Of Course, Treasury Wants To Hang on to TARP Money

When has a bureaucrat every wanted to give up on a big slush fund? Particularly one with no strings attached? What is heinous about the discussion of Treasury’s plan to argue that it should have its authority under the TARP extended is the failure to include some of the most basic and troubling issues. First, […]

UK to Propose Legislation to Contain Banker Pay, Make Suits Against Banks Easier

The theater is starting to get interesting. Here in the US we have banker pay theater masquerading as the real thing. Kenneth Feinberg, the so-called pay-czar, struggles to collect a few scalps at the handful of TARP institutions under his domain, with the ever-intransigent AIG making headlines. This of course is meant to distract attention […]

The Kanjorski “We’re Tough on TBTF” Headfake

Dear God, if you read the media, you’d really think the Congressional huffing and puffing at the banking industry was going to solve the “too big to fail” problem, or even make much of a difference. Folks, I hate to tell you, these remedies fall so far short of what it would take as to […]

Guest Post: Senator Dodd has Introduced a Sweeping Financial Reform Bill. Please Help Me Figure Out If Its Good or Bad, and What Its Missing

By George Washington of Washington’s Blog. A source on the Hill sent me the following summary of Senator Dodd’s proposed financial reform bill. My source notes: The summary leaves out Sections 1201-1204, which contain serious changes to the Federal Reserve bank structures, transparency elements, and restrictions on 13(3). Comments and observations are always welcome. Dodd […]

Mishkin Defend Bubbles (and of Course, the Fed)

The press becomes more surreal with every passing day. If we didn’t all have a stake in the outcomes, this would make for great theater. First we have the absurd spectacle of bankers claiming that they are doing God’s work. Great! Then they should be willing to do it for free. I don’t recall the […]

Quelle Surprise! Banks Overestimating Their Health

Remember Lake Woebegone: all the women are beautiful, and all the children are above average. And all banks in robust health. Self assessment (and undue self regard) was one of the big fallacies of the famed stress tests. The banks were asked to run scenarios on their own loan portfolios, with no independent verification of […]

Einhorn: First, Let’s Kill All the Credit Default Swaps

David Einhorn, who enjoys his considerable reputation for hard-fought battles against firms with shaky finances and dubious accounting (Allied Capital and Lehman), has taken aim at a new and equally deserving target: credit default swaps. In an interesting bit of synchronicity, Einhorn’s comments in a letter to investors overlap to a considerable degree with a […]

The less optimistic view of Treasury’s handling of the crisis

By Edward Harrison of Credit Writedowns The Obama Administration is captured. To understand why it has acted as it has, one doesn’t have to take the view that its efforts to save the banking industry were a deliberate attempt to line bankers’ pockets by transferring money from taxpayers to the banking industry. One need merely […]