So which theory is it: stunning bureaucratic incompetence, wishful thinking and denial (a better gloss on theory #1) or a cover up? Or a combination of the above? No matter which theory or theories you subscribe to, the continuing revelations of how the SEC and perhaps more important, the New York Fed conducted themselves in […]
Read more...The Lehman Examiner’s report gives an unintentionally damning portrayal, both of the the structure of financial regulation in the US and how regulators failed to use the powers they had effectively. Section III.A.6: Government shows that even with its imperfect grasp of the situation, the authorities recognized Lehman had a large negative net worth. Yet […]
Read more...A reader wrote to tell me his firm had been shown transactions at the end of 2007 from an investment bank (not Lehman) that he was confident were to tart up its balance sheet. This confirms the hardly shocking idea that window dressing was not limited to Lehman: Around Dec 2007 bank I work for […]
Read more...By Rob Parenteau, CFA, sole proprietor of MacroStrategy Edge, editor of The Richebacher Letter, and a research associate of The Levy Economics Institute This 2009 analysis by UBS, presented in FT Alphaville, debunks a central tenet of the deficit terrorist camp: If the deficit terrorists were correct, there should be a much more defined population […]
Read more...Relations between the US and China have been deteriorating. Although both sides have poked each other in various ways (Obama meeting with the Dalai Lama, China dissing Obama in Copenhagen by standing him up for a meeting, some tit for tat on tariffs), the major, unresolved bone of contention is China’s pegging of its currency, […]
Read more...By Frank Partnoy, Professor of Law and Finance University of San Diego School of Law and author of Fiasco, Infectious Greed, and The Match King The buzz on the Lehman bankruptcy examiner’s report has focused on Repo 105, for good reason. That scheme is one powerful example of how the balance sheets of major Wall […]
Read more...I chatted at the Book Salon on FireDogLake on Saturday (yes I screwed up completely in not notifying Naked Capitalism readers). The conversation was hosted by masaccio and led to a wide ranging discussion. The chat started with his summary of the book: Yves Smith brings the same clear and concise writing to ECONned: How […]
Read more...From the December 2009 issue of The Baffler (no online version of this article available). For those not familiar with The Baffler, this is the revival of a magazine of business and culture edited by Thomas Frank that had previously been published from 1988 to 2007. This issue was called “Margin Call” and included articles […]
Read more...Quite a few observers, including this blogger, have been stunned and frustrated at the refusal to investigate what was almost certain accounting fraud at Lehman. Despite the bankruptcy administrator’s effort to blame the gaping hole in Lehman’s balance sheet on its disorderly collapse, the idea that the firm, which was by its own accounts solvent, […]
Read more...A war of words has broken out between the Treasury Department and the EU over proposed EU financial services regulations. The first salvo in this dispute occurred earlier this week, when, as reported in the Guardian, American banks were excluded from the sovereign bond market, which means new issues (they obviously cannot be prohibited from […]
Read more...By Tom Adams, an attorney and former monoline executive I’m usually cynical about these “genius of Wall Street” articles, but the Vanity Fair article “Larry Fink’s $12 Trillion Shadow” by Suzanna Andrews, about the head of the world’s largest money manager, BlackRock, raises the cliche to another level. My skepticism results both from the disconnect […]
Read more...By Richard Smith, a London-based capital markets IT specialist Hmm, I wonder if Yves’s resolution authority post will become the econoblogosphere’s equivalent to Clochemerle’s shattered urinal and its entourage of rioters. Surely not; yet it’s impressive how often such modest, utilitarian objects – a pissoir, a blog post about a financial reform proposal – can […]
Read more...Self-deception is a remarkably useful form of mental disturbance. Calculated liars have to keep their stories straight, while the deluded are sincere and often unshakable in their misguided beliefs. The Powers That Be insist that a magic bullet called a special resolution authority will solve many of the problems with the “heads I win, tails […]
Read more...The Financial Times give us yet another sorry update in the bankster vs. the general public saga, and the banksters continue to gain ground. Their latest about-to-be-cinched victory is beating back a pro-reform idea sponsored by Senator Dodd (yes, even he can have the occasional “Nixon Goes to China” moment). Dodd had wanted bank regulation […]
Read more...Gretchen Morgenson has a fair number of critics among readers of this blog, which I think is a tad unfortunate. Most of her articles are in fact sound; she is very reliable on executive comp, anything in the equity markets, or where she is working form legal documents, generally lawsuits. It’s when she wanders into […]
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