The Financial Times story revealing that regulators in Switzerland, Hong Kong, the UK and US have starting probing foreign exchange markets, based on evidence that currency traders were rigging markets, is thin on details because the inquiries are still underway. Nevertheless, these investigations have the potential to unearth a Libor-level scandal.
Read more...If I were a still a Wall Street type, I don’t think I could have done a better job of sabotaging an effort to impose transaction taxes on big financial firms than the left has managed to do itself with lousy branding.
Read more...I thought readers would have fun taking apart a reply by the Thomas Curry, the Comptroller of the Currency, to some written questions posed by Elizabeth Warren after a July 11 Senate Banking Committee hearing on systemic risk.
Read more...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.
Read more...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”.
Read more...I got this e-mail from a law school professor this evening:
Read more...wtf is with Eric Holder personally meeting with Jaimie Dimon? Since when do other targets of investigations get such access and solicitude?
I thought I was late to write about JP Morgan’s $920 million multi-regulator settlement last week on the London Whale, but breathless news of a possible $11 billion settlement of mortgage-related liabilities has pushed the bank and its chief back under the hot lights.
Read more...It is unpleasant to face up to the fact that quite a few of the people who are lauded as courageous were not as brave as their PR would lead you to believe.
Read more...A new article up at the Wall Street Journal blares, “J.P. Morgan Still Faces Criminal Investigation for ‘Whale’ Trades.” This headline is narrowly accurate and shows some refreshing tough-mindedness among regulators in how they are negotiating with JP Morgan over its London Whale trades
Read more...One of the reasons I haven’t weighed in with the obligatory Lehman five year anniversary piece is that so many of them are variations on a limited range of themes. So it may be more instructive to discuss the stories that it would have been nice to see instead.
Read more...By David Dayen, a lapsed blogger, now a freelance writer based in Los Angeles, CA. Follow him on Twitter @ddayen I don’t know of any clear-eyed analyst who held out much hope that the handover of the Treasury Department from Tim Geithner to Jack Lew would herald a new era of stringent financial regulatory reform. […]
Read more...Only now that the narrative around Detroit is pretty well established – city in long-term decline whose distress was intensified by a series of corrupt city governments, compounded by state governments that were opposed to Detroit’s interests – does an important additional factor come to light, that of derivatives losses.
Read more...Yves here. The post below from Paul Buchheit makes a persuasive layperson’s case for a financial transactions tax. There is an equally sound case to be made from a financial markets viewpoint.
Read more...Yves here. Aside from the foursquare case that Professor Black makes for reinstituting Glass-Steagall, another important set of arguments came in 2009 from Andrew Haldane, director of financial stability at the Bank of England.
Read more...I’m going to be brief, in part because the CFTC’s probable demonstration of lack of gumption is still in play, while the SEC’s was expected but nevertheless appalling. But the bottom line is that even though we seem some intermittent signs of the officialdom recognizing that big banks remain a menace to the health and well-being to the general public*, the measures to constrain them continue to be inadequate.
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