Category Archives: Investment banks

“The Hack’s Tale”

By Satyajit Das, a risk consultant and author of Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives In Fed We Trust: Ben Bernanke’s War on the Great Panic by David Wessel Too Big To Fail: The Inside Story of How Wall Street and Washington Fought to Save the Financial System—and […]

Goldman Threatens to “Move” 20% of UK Staff to Spain to Escape Bonus Supertax

So we now have an official demonstration of what we all knew to be true: banksters giving their right to loot their companies top priority, and the greater fool public be damned, with Goldman the most egregious sinner. That firm’s self serving protestations to the contrary, it was a ward of the state, and would […]

Spitzer, Partnoy, Black Call for AIG Open Source Investigation (and Goldman Implications)

An op-ed in the Sunday New York Times by former investigators and prosecutors Eliot Spitzer, Frank Parnoy, and William Black calls for AIG to put non-privileged e-mails, accounting documents, and financial models on line to allow for an “open source” investigation. The questions they want to examine include: As fraud investigators, we would like to […]

Bank of England Calls Bluff of Bankers Who Threaten to Depart UK to Avoid Taxes

The UK is providing a lesson the US badly needs to learn, that push comes to shove, regulators hold the whip, and have to be willing to use it when necessary. Given how intransigent the financial services industry has become, the time for discipline has come. Maybe some of them even want it secretly…. In […]

“Financial Reform, or, Rearranging Chairs on the Titanic”

By L. Randall Wray is a professor of economics and research director of the Center for Full Employment and Price Stability at the University of Missouri–Kansas City and writes for New Deal 2.0 Congress is nearing completion of its financial reform bill HR 4173 (Wall Street Reform and Consumer Protection Act of 2009), which appears […]

Guest Post: Woman Who Invented Credit Default Swaps is One of the Key Architects of Carbon Derivatives, Which Would Be at the Very CENTER of Cap and Trade

As I have previously shown, speculative derivatives (especially credit default swaps or “CDS”) are a primary cause of the economic crisis. They were largely responsible for bringing down Bear Stearns, AIG (and see this), WaMu and other mammoth corporations. According to top experts, risky derivatives were not only largely responsible for bringing down the American […]

Quelle Surprise! Top Brass at Failed Firms Profited Handsomely

The New York Times discusses a study (supposedly released, but the paper has yet to be posted) by corporate governance expert and Harvard Law School professor Lucien Bebchuk (along with Alma Cohen and Holger Spamann) on how much the top echelon at failed firms Bear Stearns and Lehman really suffered when their firms imploded. The […]

The Kanjorski “We’re Tough on TBTF” Headfake

Dear God, if you read the media, you’d really think the Congressional huffing and puffing at the banking industry was going to solve the “too big to fail” problem, or even make much of a difference. Folks, I hate to tell you, these remedies fall so far short of what it would take as to […]

The Fantasy of the Clearing House Magic Bullet

As Gillian Tett points out in the Financial Times today, clearing derivatives centrally has come to be viewed in policy circles as a magical solution. As a result, it has not gotten the scrutiny it deserves. The reason for the enthusiasm is that, in theory, a clearinghouse would make sure all agreements were adequately backstopped, […]

Mirabile Dictu! Goldman Lost Money Only One Day in Last Quarter

OK, I have heard all the explanations, spreads are wider because there are fewer market makers, asset prices are rallying (market making firms are structurally long; it’s difficult and costly to go net short on that big a balance sheet), Goldman is currently the trading kingpin. But I still find these factoids remarkable: Goldman lost […]