If you managed to be late to the Volcker Rule party, you can learn a great deal of what you’d need to know via the revealing contrast between two reasonably detailed accounts, one at Huffington Post by Shahien Nasiripour, the other by Matt Levine at Bloomberg. If you didn’t know better, you’d wonder if they were talking about the same rule.
Read more...We are all still paying the price for the stream of ever more leveraged credit derivatives that fueled the world’s greatest credit bubble. It appears that some of these are attempting a comeback.
Read more...Yves here. This post is important not simply because it describes where the fight over position limits stands and why it’s important, but it also gives some insight into regulator processes. It makes clear how even as few as two well placed officials, Bart Chilton and Gary Gensler, did a great deal to hold the line against predatory large financial firms. It also shows how hard regulators have to fight to do their job.
Read more...I’m sure some readers will protest that comparing Jamie Dimon to Lance Armstrong is unfair. After all, Dimon is better looking than Armstrong. But this post will demonstrate that the big reason that Armstong’s reputation has crashed while Dimon’s remains largely intact is first, that bank CEOs have a powerful and largely compliant messaging apparatus in the financial media and second, that we hold sports stars to much higher standards than titans of finance and commerce.
Read more...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. […]
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