Category Archives: Banking industry

Could a "Crisis Insurance" Wrinkle Make Banks Managers More Prudent?

One of my (many) pet peeves is the lousy incentives that investment bank top brass and staff have had for some time. In particular, the advent of the “other people’s money” model has meant that everyone has reason to be cavalier. The industry has a proud tradition of people failing upwards, or at least sideways, […]

"Monetizing the Debt: Disinformation in the Blogosphere"

Via e-mail, I received Tyler Durden’s post on supposed Fed stealth monetization of debt via an allegedly stealth repurchase of a big chunk of the Treasury’s latest 7 year bond issue on the Fed’s open market desk. Full disclosure: Tyler Durden has been a guest blogger here, I think he often does a very good […]

Judge Refuses to Approve SEC Settlement Over Merrill-Bank of America Bonuses

The Merrill-Bank of America bonus row took an interesting turn. As readers may recall, Merrill paid bonuses prior to the closing of its purchase by Bank of America, which was earlier than they would have been issued had Merrill remained independent. That timeframe was also when Bank of America was threatening to break the deal, […]

Run for the Hills: Fed Plans to Build on Sham Stress Tests as Basis for Regulation

As readers may recall, we and just about anyone who understood anything about financial firm supervision saw the stress tests as a complete and utter farce. The authorities had tea and cookies with the 19 banks and then talked about model outputs. The talks sometimes got heated, so were were supposed to take this as […]

Treasury Now Tries "Name and Shame" To Embarrass Banks Into Making More Loan Mods

The Treasury Department seems to be a wits’ end on several front. The Wall Street Journal reported yesterday that Geithner said bad words to banking regulators to try to bring them to heel. A few weeks ago, Geithner also had a chat with bank executives about their failure to do much in the way of […]

Geithner Bullies Financial Regulators to Accept Fed as Top Dog

The Wall Street Journal reports that Timothy Geithner tongue-lashed Federal financial services regulators over their bucking the Obama Administration initiative for the Fed to become The One Regulator to Rule Them All. This comes on the heels of Congressional testimony which showed rather clearly that the key actors were not singing from the same hymnal. […]

Will Acute Distress in the Baltics Blow Back to Europe?

Gideon Rachman has a pretty gloomy piece in the Financial Times on the lousy state of affairs in the Baltics. Short story, like a lot of places, they went on a monster debt bender and now have an awful hangover. Rachman suggests that Baltic woes could blow back and hurt Europe’s recovery. The trigger would […]

Government Taken in Dealings with Wall Street: Accident or Design?

We’ve grumbled at points during the process of throwing various lifelines out to the financial sector, that media has tended to focus unduly on the TARP (no doubt encouraged by the powers that be who are eagerly pushing “the banks are fine” line) at the expense of the vast net of additional subsidies. The ones […]

Guest Post: "Breaking News: The GFC was not caused by Beer Swilling, Cocaine Snorting Traders"

Satyajit Das, of Traders, Guns & Money fame, is keeping tabs on what he calls GFC plot lines, or what one might also call The Search For The Guilty. The latest caught in the dragnet is…economists! But Das thinks some of the books still miss key issues. From Das: Just when I had finally worked […]

TARP Index is Down $148 Billion

Didn’t Henry Paulson promise us the TARP was an investment and the taxpayer might even show a profit? Shows the dangers of buying what an ex-Goldmanite is selling. The TARP losses, as estimated by Ethisphere, are $148 billion as of June 19, so it is a bit dated. The flip side is I am hearing […]

China: Buildings to Nowhere Looking Increasingly Shaky

We’ve been told that one of the reasons China is allegedly faring less badly than might be expected, given than big creditors tend to take it on the chin worse in global crises than debtors, who can simply default, is that its economy was actually more reliant on domestic capital spending than exports as a […]

Iceland Proves That in a Financial Crisis, Breaking Glass and Trashing Currency is a Good Remedy

The headline exaggerates, but not by much. Back in April, a Vanity Fair story about Iceland’s remarkable financial blow up was grist for a Vanity Fair story by Michael Lewis, “Wall Street on the Tundra“. The quick version is that Icelandic men were not merely reckless, that is such a common male pathology as to […]

Guest Post: On Archetypal Financial Crisis Plot Lines

Dear readers, despite the near tsunami of titles on the financial crisis, we have no new reader submissions this week but have several we expect to come in shortly, all ones I think readers will enjoy a great deal. In the meantime, Satyajit Das (of Traders, Guns & Money) graciously offered to let us post […]

Citi Trader, Who Made $100 Million Last Year, Insists on Keeping His Deal in Place

On the surface, the particulars of this case seem simple. A Citigroup commodities trader who says he has a contract that could yield him a $100 million payment this year is crossing swords with the new Treasury pay czar, Kenneth Feinberg. The Wall Street Journal story portrays the pay deal for the trader, Andrew Hall, […]