Category Archives: Regulations and regulators

Government Taken in Dealings with Wall Street: Accident or Design?

We’ve grumbled at points during the process of throwing various lifelines out to the financial sector, that media has tended to focus unduly on the TARP (no doubt encouraged by the powers that be who are eagerly pushing “the banks are fine” line) at the expense of the vast net of additional subsidies. The ones […]

Guest Post: Recent Lehman MD Reviews "A Colossal Failure of Common Sense"

Submitted by Arthur Doyle, a managing director at Lehman Brothers until the summer of 2008. When an apple has ripened and falls, why does it fall? Because of its attraction to the earth, because its stalk withers, because it is dried by the sun, because it grows heavier, because the wind shakes it, or because […]

TARP Index is Down $148 Billion

Didn’t Henry Paulson promise us the TARP was an investment and the taxpayer might even show a profit? Shows the dangers of buying what an ex-Goldmanite is selling. The TARP losses, as estimated by Ethisphere, are $148 billion as of June 19, so it is a bit dated. The flip side is I am hearing […]

SEC Taking More Aggressive Stance on CEO Clawbacks

The SEC is pursuing a rather odd case, odd in the sense that while the media is getting very excited about it, it strikes me as having perilous little general applicability. The broad strokes via the Financial Times: The US Securities and Exchange Commission’s attempt to use – for the first time – a “clawback” […]

Guest Post: On Archetypal Financial Crisis Plot Lines

Dear readers, despite the near tsunami of titles on the financial crisis, we have no new reader submissions this week but have several we expect to come in shortly, all ones I think readers will enjoy a great deal. In the meantime, Satyajit Das (of Traders, Guns & Money) graciously offered to let us post […]

Citi Trader, Who Made $100 Million Last Year, Insists on Keeping His Deal in Place

On the surface, the particulars of this case seem simple. A Citigroup commodities trader who says he has a contract that could yield him a $100 million payment this year is crossing swords with the new Treasury pay czar, Kenneth Feinberg. The Wall Street Journal story portrays the pay deal for the trader, Andrew Hall, […]

Quelle Surprise! The Fed is Reporting Losses on Its Bear Stearns and AIG SPVs

Readers may recall that during the heat of bailout battle, the Federal Reserve got into the fancy finance business, relying on the sort of deal structuring sometimes used to try to turn toxic odd pork scraps into barely-digestible sausage, the procedure used for pigs so dead that merely putting lipstick on them just won’t do. […]

Guest Post: Review of Ferdinand Pecora’s "Wall Street Under Oath"

Submitted by DoctoRx, who comments on the economic and financial scene at EconBlog Review. In a few months during what was likely the worst financial crisis of the Great Depression- the tumultuous events of early 1933 culminating in closure of all banks in most states and then FDR’s sweeping bank “holiday”, a man who had […]

Ambrose Evans-Pritchard Says End of the Financial World is Nigh

One of the good things about those of the Austrian persuasion is that they serve to protect the flanks of the merely skeptical like me. I am not exactly keen Ambrose Evan-Pritchard’s prescription, which is greater monetary easing with more fiscal restraint. I put banking industry reform (of the root and branch sort) very high […]

Satyajit Das Weighs in on OTC Derivatives Proposals and Finds Them Wanting

For those who have not come across him, Satyajit Das is a hard core derivatives expert, having worked with them in enough markets and enough vantage points to very well versed, which in his case means thoroughly jaded. His book for laypeople, Traders, Guns, and Money. manages to be very informative, somewhat geeky, yet engrossing […]

"Orwellian accounting cannot damp economic cycles"

The very fact an op-ed piece (more accurately, comment, as they call them in the Financial Times) by Paul Boyle against airbrushed accounting needed to be written at all is troubling. A move is afoot that appears further advanced than I realized is to fool with financial firm statements so as to reduce the procyclical […]

Bank of America Sent to the Woodshed, Big Time (And Citi Going There Too)

The Wall Street Journal has quite a bombshell, namely, that the Fed and the Office of the Comptroller of the Currency have ordered the Bank of America to make changes to its board and clean up its risk and liquidity management. The bank is under the shortest of regulatory short leashes, a memorandum of understanding, […]

Bair and Bernanke Back Size Disincentives For Banks

In an about-face, the Administration seems to be getting serous about trying to Do Something about the too-big-to-fail syndrome. Or is it? The proposal comes from Shiela Bair, and does not have the support of the Treasury Department. Curiously, Bloomberg reports that Bernanke has endorsed the Bair plan, which unusually puts him in opposition with […]

How globalisation led to universal banking in America

Submitted by Edward Harrison of Credit Writedowns. Last week, I followed up Yves Smith’s excellent post on “Why Big Capital Markets Players Are Unmanageable” with “More on why big capital markets players are unmanageable.” I would like to extend the discussion beyond the U.S. border into a look at how the universal banking model abroad […]

Guest Post: Review of Barry Ritholtz’s "Bailout Nation"

Submitted by Richard Smith, a somewhat jaded capital markets IT professional, aviator and amateur mathematician who lives in London. He has been watching the capital markets from the sidelines for over twenty years. He frets over his ducklings, and should probably get out more. The indefatigable Barry Ritholtz is a fund manager and TV talking […]