The current issue of Institutional Risk Analytics discusses an issue that is a tad arcane for many readers, but more important than it seems on the surface. The 2005 bankruptcy law changes, among other things, provided that that derivative transactions were exempt from bankruptcy provisions, meaning that creditors have to put in their claims against […]
Read more...We’ve argued that the “Volcker Rule,” which would limit “proprietary trading” by banks, is in theory a very good idea, but the proposal put forward by Volcker/Team Obama goes wide of the mark by defining any customer trade as not being part of proprietary trading. That’s a spurious distinction; large-scale position-taking well beyond what was […]
Read more...Paul Volcker has an op-ed in the New York Times that made my stomach sink. I had considerable hopes for Volcker’s involvement in financial reform; he’s one of the few regulators with the stature (literally and figuratively) who can say things to bankers, the media, and government officials that are unpalatable yet need to be […]
Read more...By Tom Adams, an attorney and former monoline executive, and Yves Smith For those of you who followed the House Oversight Committee hearings on the Fed’s conduct in the AIG bailout, one focus of discussion was the Fed’s efforts to keep the details of the CDOs that the Fed effectively bought via an entity it […]
Read more...No matter which way you look at it, the picture that is emerging of the Federal Reserve, as revealed by the ongoing probes into its AIG bailout, is singularly unflattering. The explanations for its actions can only support one of two interpretations: that the Fed was a chump, taken by the financiers, or a crony, […]
Read more...One of the things that has been driving me crazy about MSM coverage of the latest public demands for tougher reforms of Wall Street is that they typically engage in subtle or not-so-subtle demonization of the critics. It is a blatant effort to put the shoe on the wrong foot. No, it isn’t that the […]
Read more...Rep. Darrell Issa of the House Oversight Committee has asked to Committee Chairman Towns to subpoena more documents from the Fed regarding its decision-making process in the AIG bailout. Readers have no doubt noted that the efforts so far have been to try to infer how much Geithner was involved in this process. We’ve noted […]
Read more...Mervyn King, the governor of the Bank of England, gets it. Why does he have so little company on this side of the pond? King discussed what it would take to fix the financial services industry, and it’s more ambitious than anything you see under consideration in the US. Per the Independent: The Governor said […]
Read more...More and more revealing pieces of the AIG bailout puzzle keep emerging as various subpoenas and FOIA requests extract more and more details. One odd bit is why the Fed decided to take out the AIG credit default swap counterparties at par, rather than simply guarantee the contracts? The Fed keeps protesting that the rescue […]
Read more...Not that I have the time or patience to dig through 250,000 pages of documents, but I have a nagging suspicion that the people who are pouring through various AIG-related disclosures may be missing key points or snookered into interpretations that may be unduly flattering to various banksters. The focus of the recent investigations into […]
Read more...We’ve said that a Tobin tax, meaning a tax on transactions, could help both as a financial reform measure and as a tax generator. The logic is that trading, particularly OTC trading, involves costs (periodic taxpayer-funded bailouts) that are not borne by the buyers and seller (ie, they should be paying for rescue insurance as […]
Read more...Oh, this is starting to get VERY interesting. L’affaire Fed/AIG is beginning to smell a little like Watergate, where an imperial organization that thinks it writes its own rules (then the Nixon administration, here the Fed) fights tooth and nail to keep certain activities hidden well away (recall, for instance, the Saturday night massacre). Now […]
Read more...By Steve Keen, Associate Professor of Economics & Finance at the University of Western Sydney and author of Debunking Economics: The Naked Emperor of the Social Sciences The US Senate should not reappoint Ben Bernanke. As Obama’s reaction to the loss of Ted Kennedy’s old seat showed, real change in policy only occurs after political […]
Read more...Early on in the TARP fee discussion, we mentioned in passing that it would probably have an impact on repo financing. Repo means “sale with agreement to repurchase.” It’s a pawn-broker-like procedure that involves securities. The borrower gets to park his holdings with another party, with an agreement to buy them back at a specified […]
Read more...Normally I don’t discuss the fate of individual transactions, but the Stuyvesant Town acquisition was such a colossally stupid deal that it merits comment. The acquisition of the 11,000 apartment complex known as Peter Cooper Village and Stuyvesant town was a classic example of peak of cycle excess. The $5.4 billion price was the most […]
Read more...