Category Archives: Derivatives

EU Antitrust Authorities Sue 13 MegaBanks Over Credit Default Swaps Collusion to Stymie Exchanges

Ooh, here we thought bank reform was dead, and an unexpected front opens up.

Administration, Congress Trying to Give Gensler the Brooksley Born Treatment over Derivatives Reform

It’s actually getting amusing to watch the banking industry try to pull out heavy but rusty artillery and aim at a regulator who looks like he is about to *gasp* make them comply with some rules they were certain they’d be able to evade.

Corruption, EuroStyle: ECB Chief Draghi Fudged Italy’s Books to Secure Eurozone Entry, Italy Stuck With Derivative Losses

As readers of the financial press may recall, there was a kerfluffle over the fact that Greece had used a currency trades designed by Goldman in 2001 to mask the level of its indebtedness and secure Eurozone entry. A much bigger and more costly shoe of the same type has dropped in Italy and it directly implicates the current ECB chief, Mario Draghi.

Gensler Staring Down Administration and Banks on Derivatives Reform

Yves here. Readers may recall that Gary Gensler, the head of the Commodities Futures Trading Commission, is being pushed out by Obama. His planned replacement is so appallingly lightweight (oh, and formerly in a very junior role at Goldman) as to assure that all she’ll be able to do is take dictation from financial firm lobbyists.

But Gensler may be having a last laugh before he leaves office.

How Wall Street Fraudsters Plunder Public Finances, And How to Fight Back

Yves here. This article, part of an ongoing AlterNet series, ‘The Age of Fraud,’ edited by Lynn Stuart Parramore, does the difficult and important feat of unpacking a financial structure that blew up a lot of municipalities in layperson-friendly terms. It also proposes some sound reform ideas. Circulate to friends and colleagues, particularly in communities that have been on the losing end of bad Wall Street deals.

Coming to a Broke Municipality Near You: The Greek, Um, Jefferson County, Solution

Jefferson County’s sewer system train wreck is now looking an awful lot like the periphery country in Europe mess.

Sasha Breger: More Ways That Financiers Suck Wealth From Agricultural Providers (and Ultimately, You)

By Sasha Breger, a lecturer at the Josef Korbel School of International Studies at the University of Denver and author of the recent book Derivatives and Development. Her research includes global finance, derivatives, social policy, food, and farming. Cross posted from Triple Crisis

In my last two posts (http://triplecrisis.com/a-great-sucking-sound-part-2/, http://triplecrisis.com/a-great-sucking-sound-part-1/), I addressed the roles of debt, farmland acquisition, and physical commodity hoarding in helping finance siphon wealth from global agriculture. In this final post, I discuss the role of derivatives and insurance markets in this redistributive process.

Obama Axes Bank-Harrassing Gary Gensler at CFTC, Plans to Install Lightweight Ex-Goldmanite

Obama is no longer bothering to pretend that he is anything other than a stooge for banks and other big money interests.

Mr. Market’s Temper Tantrum Over Fed Tapering Talk

Lordie, the market upset we’ve had over the past week plus over Bernanke using the T, as in “tapering” word, is escalating into a full-blown hissy fit. We now have the Wall Street Journal and other finance-oriented venues telling us how unbelievably important today’s job report is. Huh? One jobs report is just another in a long series of data points.

So why has this one been assigned earth-shaking importance?

Quelle Surprise! US and UK to File Criminal Charges Against Small Fry for Barclay’s Libor Abuses

Now before anyone gets excited about the specter of bankers doing a perp walk, the early word in a Wall Street Journal story on criminal charges being readied against former Barclays bankers says that the prosecutions will target “midlevel traders.” This exercise thus continues the established pattern of small fry serving as human shields for managers and executives.

Josh Rosner on How Dodd Frank Institutionalizes Too Big to Fail

Josh Rosner of Graham Fisher testifies before a subcommittee of the House Financial Services committee today on why Dodd Frank has not ended too big to fail, but also has managed to entrench the megafirms’ advantaged position.

Mel Watt, Nominee to Head FHFA, Opposes Administration by Voting to Deregulate Derivatives

Good progressives like MoveOn, New Bottom Line, the Alliance of Californians for Community Empowerment, AFR, Elizabeth Warren, and Richard Trumka, head of the AFL-CIO have all fallen in line with Obama’s nomination of Mel Watt, Representative from ~~Bank of America~~ North Carolina.

It might help if they looked harder at Watt. If they were honest about it, there’s not much to like.

Lynn Parramore: Your Retirement for a Bottle of Champagne – How Wall Street Fraudsters Ripped You Off, Again

By Lynn Parramore, a senior editor at Alternet. Cross posted from Alternet

The LIBOR price-fixing scam has cost at least $110 million — in the state of Oregon alone!

Lynn Parramore: How a Much-Heralded Bank Reform Proposal Could Actually Blow Up the American Economy

Yves here. I had really wanted to write this piece, but Lynn Parramore beat me to the punch. There’s been almost universal enthusiasm for Brown-Vitter, legislation proposed by Sherrod Brown and David Vitter to get tough with the too-big-to-fail banks. The legislation is sufficiently stringently written that if it were enacted (big if), it would force the banks to make changes to maintain anything remotely resembling their previous profit margins. Goldman and Morgan Stanley would probably drop their banking licenses and the other US systemically dangerous banks would presumably downsize by hiving off major operations.

So what’s not to like? The problem is that the enthusiasts haven’t looked behind the curtain. This bill is being pushed, hard, by big insurers, who would be major winners.

Mirabile Dictu! JP Morgan Finally on Regulatory Hot Seat for Widespread Control Failures and Alleged Lying by Blythe Masters Under Oath

It’s been far too long in coming, but Jamie Dimon may finally be getting his comeuppance.