Category Archives: Investment banks

Will Banks Start to Walk Their Talk? Don’t Hold Your Breath (Mark to Market Edition)

The new meme from big embattled banks, starting with Citigroup’s leaked Pandit memo yesterday and Bank of America CEO Ken Lewis’ declaration that the bank will be profitable in 2009, is that things will be OK and all this talk of nationalization is unwarranted. I’ll reserve judgement till the fat lady sings. The record of […]

Cuomo Asserts That Traders Looted Merrill

I must confess I skipped past the headlines on New York Attorney General Andrew Cuomo latest salvo at Bank of America and Merrill over the Merrill bonus payments in December. Recall that those bonuses were paid earlier than usual so as to occur before the closing of the Merrill sale. Merrill contends it informed the […]

Banana Republic Watch: Rodgin Cohen a Candidate for Deputy Treasury Secratary

This tidbit comes in a Wall Street Journal story, “Top Treasury Candidates Pull Out“: Treasury has identified and is vetting other people for top slots, including H. Rodgin Cohen, chairman of top law firm Sullivan & Cromwell LLP and an adviser to virtually every firm on Wall Street, for the deputy secretary position, two people […]

More on Big Bank Endgames

Some readers and fellow bloggers have been anticipating an over-the-weekend resolution of some sort for Citigroup and/or Bank of America, given the impressive fall (admittedly from already distressed levels) in their stock prices over the last ten days. I could well be proven wrong, but I didn’t expect it this weekend, and I don’t see […]

New York Subpoenas Bank of America CEO on Merrill Bonuses (and Where is the SEC?)

The digging by the New York attorney general, Andrew Cuomo, into the bonuses paid by Merrill Lynch immediately prior to the closing of its acquisition by Bank of America, are starting to take an interesting turn. The proximate cause is that the bonuses were unseemly and unwarranted, which doesn’t form the basis for legal action., […]

Greg Mankiw in Favor of Nationalization (and Tries to Clean Up Nomenclature)

Greg Mankiw today addresses an issue which has been nagging at me, but I have neglected to address. I’ve gotten a fair number of comments along the lines of “I’m opposed to bank nationalization, but I agree we need to do something, so put them in bankruptcy.” Aargh. No one seems to have a problem […]

William Black: "There Are No Real Stress Tests Going On"

By way of background, William Black is a former senior bank regulator, best known for his thwarted but later vindicated efforts to prosecute S&L crisis fraudster Charles Keating. He is currently an Associate Professor of Economics and Law at the University of Missouri – Kansas City. More germane for the purpose of this post, Black […]

Obama to Neuter Bank Pay Restrictions

In case you think my headline is too harsh, consider the one at Bloomberg: “Obama to Work on Executive Pay Limits After Industry Complaints.” So in case you were laboring under the delusion that widespread managerial failure among the nations’ top banks, to the point of being dependent on taxpayer provided drip-feeds among the nation’s […]

Another Sign That Volcker is Marginalized (And a Preview of His Program)

Last week. Bloomberg reported that Volcker, who many regard as the best asset on Obama’s economics team, is sorely underutilized: Paul Volcker has grown increasingly frustrated over delays in setting up the economic advisory group President Barack Obama picked the former Federal Reserve chairman to lead… Volcker, 81, blames Obama’s National Economic Council Director Lawrence […]

Geithner Plan Smackdown Wrap

I cannot recall a major US policy initiative being met with as much immediate revulsion as the so-called Geithner plan. Even the horrific TARP, which showed utter contempt for Congress and the American public was in some ways less troubling. Paulson demanded $700 billion, nearly $200 billion bigger than the Department of Defense, via a […]

Blankfein Advocates Partner-Like Compensation, More Regulation, Preservation of Mark to Market

Lloyd Blankfein, in a Financial Times comment, offers some suggestions to policymakers and regulators on how to deal with the financial services industry. I’m sure most readers would like to see more sackcloth and hair shirt, less prescription. But setting the tone aside, I found one bit particularly interesting. Blankfein proposes that firms go back […]

Guest Post: "Dear Mr. Volcker: It’s the Banks, Stupid"

Guest blogger and former Congressional staffer Lune was kind enough to provide this post on Volcker’s testimony before the Senate Banking Committee today. Enjoy! From Lune: Paul Volcker, former Fed chief and currently the head of President Obama’s Economic Recovery Advisory Board, and the chairman of the Group of Thirty, testified to the Senate Banking […]

"Fix the Accounting, Then Fix the System"

Your humble blogger has been saying for some time that efforts to prop up bank asset values are prolonging the financial crisis, and the the various incarnations of “bad bank” plans inevitably entail buying dud assets at above market prices. That has the ugly side effect, which some no doubt see as a virtue, of […]

Congressional Sound and Fury Over Wall Street Bonuses Sure to Signify Nothing

A firestorm of criticism was unleashed from Washington at bonus-reaping-while-Wall-Street-burns bankers, with President Obama deigning to join in the fray. The tone was unusually heated: President Barack Obama fed a swelling populist revolt against Wall Street bonuses, calling it “shameful” that banks doled out $18.4 billion as taxpayers bail out companies and the U.S. remains […]