Right now, retiring Bank of America CEO Ken Lewis is expected to get a retirement package worth $125 million.
The Obama administration has not been shy – or quiet – about stepping up antitrust enforcement.
You might be surprised which bank exec got the most face time with FDIC Chairman Sheila Bair this summer.
One of the reasons people get worked up about naked short selling is that they don’t understand it.
Chairman Frank, Ranking Member Bachus, and other members of the Committee, I appreciate the opportunity to discuss ways of improving the financial regulatory framework to better protect against systemic risks.
Without a doubt, the effectiveness of government stimulus packages in fighting the global recession is the hottest topic in economics.
Mary Schapiro has not got great press amongst financial bloggers – however this time she beat me to the punch.
Peter Weinberg takes to the op-ed page of the Wall Street Journal today to issue a nostalgia driven call for compensation reform on Wall Street.
The WSJ reports:
The data on dividend and interest payments by TARP banks will be released tomorrow or Friday, a Treasury Department spokeswoman tells us.
So this should definitively put to rest this idea that Goldman Sachs (GS) is sneakily trying to misinform politicians about naked shorting, by confusing the issue with regular shorting.
What, you think it’s noteworthy that traders want to locate their computers to have proximity to the exchange? Ha!
Sometimes, drugs are prescribed and for conditions other than they were created for.
Naked short selling played no role in the downfall of Lehman Brothers. We know this is true because the government and the New York Stock Exchange measure naked shorting in order to implement a rule called Reg SHO. And Lehman never showed up on the list of stocks subject to […]
Today Dick Bove muses on the fate of Jamie Dimon?
There was a miscommunication between us and Goldman. They did acknowledge circulating a deck on short selling and naked shorting. However, our reasons for thinking the whole deck is hardly a smoking gun remain.
Via ZeroHedge, comes a smoking gun release today from the FDIC. I mentioned last week that the FDIC, which is essentially broke (and by the FDIC, I mean, of course, the DIF – the Deposit Insurance Fund which insures customer deposits up to $250,000), was discussing a plan to re-fund […]
Still confused about why you shouldn’t be worked up over naked short selling? We understand. It’s terribly complex and full of words that make your eyes glaze over.
In a spirited defence of financial innovation written for the Financial Times, Robert Shiller highlights three examples of financial innovation beneficial to consumers.
Naked short selling is back in the news thanks to Matt Taibbi’s investigation of the collapses of Bear Stearns and Lehman Brothers. Unfortunately, it sounds like Taibbi discarded his normally insightful scepticism when naked shorting caught his attention. Taibbi describes naked short selling as a kind of “counterfeiting,” which is […]
SEC Inspector General David Kotz outlined today 58 steps the SEC must adopt to avoid potential future Bernie-like screw ups.
Can’t say this is wildly surprising: Matt Taibbi, the Rolling Stone reporter famous for his takedown of Goldman Sachs (GS) is now joining the ranks of the naked short selling conspiracy theorists.
For a small, bankrupt drink-maker, Le-Nature has created quite a mess.
Felix Salmon responded to our post yesterday, It’s Time To Stop Being Scared By Derivatives’ Trillion Dollar Notional Values, yet failed to address the main point: For most derivatives the notional amount does not represent the amount of money at risk.
Later today the SEC is going to hold an open roundtable hearing on the practice of securities lending, a practice which is central to short selling stocks.
How will the FDIC replenish its coffers without Sheila Bair suffering the indignity of groveling in front of Tim Geithner? Clever accounting.
Joe Cassano is back in the U.S. to face questions about the troubled financial products unit he headed at AIG.
It is too quick to say that we went through an era of financial deregulation in the past decade. The idea that the financial sector was deregulated is mostly a product of the rhetoric of the Republicans seeking votes from businesses and free marketeers. Later, of course, it became a […]
The notional amount of derivatives held by U.S. commercial banks totaled $203.5 trillion dollars as of the second quarter of 2009 according to the latest report by The Office of the Comptroller of the Currency (OCC)
British Treasury head Alistair Darling said today that annual bonuses for bank executives will be outlawed.
Bank of America (BAC) already has Congress, the SEC, New York’s Attorney General, the FBI and Dept. of Justice on its back about the Merrill merger.
While US federal debt is growing at record levels, the debt of American households and private businesses is actually falling at almost an equally large rate.
The debacle that was the proposed settlement between Bank of America and the SEC brought about a lot of criticism, most importantly from Judge Jed Rakoff:
The most powerful testimony at last week’s anti-Fed hearings in Congress came from economic historian Tom Woods. The author of Meltdown, which we excerpted way back in March, explained that most reasons given for keeping the Fed’s books secret are hogwash.
The Federal Reserve was warned rountinely since 1999 about the practices inflating the subprime mortgagage bubble, but did nothing about it.
Despite all the huff and puff commentary about the dangers of complex financial innovation, a far more real threat to our economy has proved to come from complex regulations. And the problem of regulatory complexity has only become worse thanks to the plethora of programs produced in an effort to […]
Over the weekend, we had a chance to read a good amount of An American Epidemic: Mortgage Fraud — A Serious Business.
Advocates of early childhood education–programs like Head Start–often claim that the social benefits so far outweigh the costs that money budgeted for such programs should be considered an investment in the future rather than ordinary government spending.
The head of the World Bank will deliver a speech at Johns Hopkins today that will question the wisdom of the Obama administration’s plan to give the Federal Reserve more power over the largest banks. Instead, Robert Zoellick will argue, that power should go to the Treasury.
The role of executive compensation in our financial crisis might seem an unlikely subject to spark a minor civil war between the editors and columnists of the New York Times. But that’s exactly what seems to be happening.
“I could never say this in public, but all the fuss over executive compensation is a sideshow compared to strengthening capital requirements,” Barack Obama tells French President Nicolas Sarkozy.
Under pressure from Congressional critics like Ron Paul, Alan Grayson, and Barney Frank, the Federal Reserve may reveal the names of foreign banks it has lent money to.
Relax TARP execs, the mobs aren’t coming for you.
Dick Bove says the possibility of a consumer finance protection agency is killing bank stocks, and that, once again, Congress and Geithner don’t understand how the financial system works.
The SEC’s push to improve how credit ratings agencies work may have an unintended consequence: more insider trading.
Joe Cassano is probably going nuts.
Eliot Spitzer is lashing out at Hank Greenberg after Greenberg said Spitzer’s lawsuit against him was all about his run for governor.
Sketchy mortgage vultures keep circling.
Just in case you thought new regulations actually hurt entrenched industry players, here’s some reality for you.
Talk about a downfall. The man alleged to have stupidly bought Perot (PER) stock options ahead of the proposed Dell acquisitions was once a hero.
State insurers are having a hearing on rating agencies today in Maryland. This is the same hearing Moody’s initially refused to attend, but then swiftly changed its mind once regulators threatened it.
Obama’s top economic advisor Austan Goolsbee is asking AIG CEO Robert “I’m a goon” Benmosche to drop it a notch and stop calling government people “crazies.”
In a statement in front of the House Banking and Financial Services Committe, Paul Volcker e takes aim at several issues at the crux of the regulatory debate, one of which is the “too big to fail” concept.
First, let’s step back and remind ourselves what flash trading is: when you enter an order on certain exchanges, you have the option to elect to have that order “flashed” to members of that market centre to give them the opportunity to match prices that may be available on other […]
A note to everyone who is looking forward to someday getting some red-hot inside information to trade on:
Some revisionists, like Tim Geithner, would want you to believe that if only regulators had FDIC-like wind-down authority for big institutions, the crisis could have been handled a lot better.
Sylvain Raynes, the ex- Moody’s vice president who says that the agency should be punished for its “pattern of fraud,” explained to us one of the deals he witnessed which he believes was fraudulent.
An ex- Moody’s vet will testify tomorrow before the NAIC Working Group on Rating Agencies — yes, that one which Moody’s refused to attend but then changed its mind when regulators threatened it.
The head of the FSA, UK’s financial watchdog, called bankers “socially useless” at a posh event event in London.
Failed lender IndymacBank is now “OneWest Bank” — rescued by a $16 billion purchase in March — but its problems linger.
About half of Bernie Madoff’s fraud victims took out more than they originally invested with the disgraced money manager.
Treasury Secretary Timothy F. Geithner Written Testimony House Financial Services Committee Financial Regulatory Reform
The Obama administration’s idea that it should be able to take over any failing financial firm posing systemic risk might not be as sound as almost everyone assumes. Instead of creating less chaos and more stability, it could have a dangerously destabilizing effect on markets.
When the government supports the debt of financial firms, it actually makes the jobs of its executives much harder if not impossible. Whether the guarantee is explicit or implicit because the bank is Too Big To Fail, the market reacts to the government backstop in ways that make risk management […]
The editorial page of the Wall Street Journal today joins our ever growing chorus of dissenters against the Wall Street pay theory of our financial crisis.
The big tax break for first-time homebuyers might be good politics but it is terrible economics.
The Obama administration’s plans to limit pay on Wall Sttreet in an effort to prevent banks from taking on too much risk is based on a mistake, Andy Kessler argues in the Wall Street Journal today.
Major retail banks see the writing on the wall when it comes to debit card overdraft fees. Even before Chris Dodd introduces his legislation going after them, Bank of America (BAC) and JPMorgan Chase (JPM) are going to change their policies, so consumers in what sounds like a consumer-friendly manner:
Surprise, surprise, unions don’t like Wall Street. But hey, it’s always a fun to fire up the base by taking shots at the Evil Empire.
In case you had any doubt, here’s proof that protectionism is silly.
As we wrote earlier today, Attorney General Jerry Brown has decided to go after every financial fraud he can.
SEC’s Mary Schapiro testified today before the House Agriculture Committee on ways to regulate over-the-counter derivatives, which present a number of risks, “chief among them is systemic risk.”
It’s no coincidence that Bank of America Corp chose today to announce that it will pay $425 million to end a program to share losses on bad assets and derivatives with the United States.
Jerry Brown, California’s Attorney General, is tying himself to just about every problem stemming from the financial crisis.
In the days and weeks that followed the government’s decision to bail out troubled banks, Paul Krugman was a reliable guide to the problem of socializing financial losses and the dangers of creating zombie banks.
Paul Krugman jumps aboard the Wall Street pay-reform wagon.
The FDIC has a new plan to save itself, one that has already prompted cheering and backslapping in the banking industry.
After missing a Merrill Lynch-related filing deadline today, Bank of America now says it will meet with Congressman Edolphus Towns.
The SEC pried $1 million out of Regions (RE) today, settling with the Alabama bank over it’s role in a $255 million fraud of mostly Latin American investors.
Bank of America (BAC) just missed its deadline
Last week the Fed revealed that it would begin to review the structure of compensation at large, important financial institutions to assess whether they were encouraging too much risk taking. This stunning powergrab–no elected official has ever voted to give the Fed this power–is a terrible idea.
In your weekly warning: commercial real estate is still the next shoe to drop.
Another Ponzi scheme bites the dust.
Janet Tavakoli is taking aim at rating agencies today at the IMF–explaining why they should be stripped from their NRSRO designation for structured products.
Moody’s just said that it would attend a regulatory hearing on rating agencies this week after all.
Bernie Madoff may have been a New Yorker and R. Allen Stanford a Texan, but the real den of Ponzi sin is in southwest Florida.
Obama yesterday expressed concern at the sorry state of the news industry and said that he will look at a news paper bailout, because otherwise, blogs will take over the world, and that would be a threat to democracy, The Hill reports.
Senator Chris Dodd, the powerful senior Senate Democrat overseeing legislation to overhaul the nation’s financial system, is planning to propose the merger of four bank agencies into one super-regulator. Most strikingly, Dodd’s legislation would reportedly strip the Federal Reserve of its regulatory powers.
Bank of America has until noon today to answer a powerful Congressman’s questions about the merger with Merrill Lynch.
Moody’s has angered insurance regulators by refusing to appear at a regulatory hearing later this week in National Habor, Maryland. And now regulators are threatening to strip the ratings agency of its status as an acceptable ratings agency for use by insurance companies.
The Obama administration’s Treasury Department and the Federal Reserve are preparing new rules that they argue will reduce the risk to the financial health of banks that bonuses linked to performance can create. These efforts, however, are largely misdirected: our crisis was not brought about bankers recklessly seeking risk but […]
Rating agencies will soon face tough competition as regulators are looking at alternatives.
This is probably the perfect election-year law to push. It’s easy to understand (for voters) and attacks something that everyone hates:
As if the SEC and various state attorneys general weren’t causing enough of a headache at Bank of America (BAC), the FBI and DOJ are on the case too.
The SEC voted today unanimously to bolster oversight of credit ratings agencies by “enhancing disclosure and improving the quality of credit ratings.”
When a bubble bursts, do people actually regret it? Well, they may say they do, or that they wished it had never happened, but what they really regret is not buing in and then selling out at the top.
The Federal Deposit Insurance Corp may need to borrow from the US Treasury to replenish its deposit insurance fund, Chairman Sheila Bair said after a speech in Washington DC today.
Despite Paul Volcker’s constant (and welcome) warnings about the systemic risk posed by money market funds, it wouldn’t appear that reforming them is a major priority in Washington.
The Fed has apparently gotten so frustrated with the Obama administration’s inability to bring change to Wall Street that it’s taking matters into its own hands–parachuting Fed regulators into the bowels of banks to make sure their compensation policies don’t encourage inappropriate risk-taking.