Category Archives: Banking industry

Neil Barofsky on Pandit and Obama Administration Bankster Friendliness on Bill Moyers

Bill Moyers was taken enough with his chat with former SIGTARP chief Neil Barofsky that he’s having two segments with him.

How Botched Derivatives Risk Taming Regulations are Again Going to Leave Taxpayers Holding the Bag

An important piece in the Financial Times by Manmohan Singh, a senior economist at the International Monetary Fund, describes persuasively how one of the central vehicles for reducing derivatives risk, that of having a central counterparty (CCP) and requiring dealers to trade with it rather than have a web of bi-lateral exposures, or rely on banks to act as clearers (making them too big to fail) has gone pear shaped. While the immediate reason for this outcome is the unwillingness of national banking regulators to cede powers to an international clearinghouse, Singh fingers an equally important cause: the reluctance to recognize that the underlying problem was and remains undercollateralized derivatives positions. His introduction to the mess:

EU Summiteers Feast While Eurozone Smolders

By Delusional Economics, who is determined to cleanse the daily flow of vested interests propaganda to produce a balanced counterpoint. Cross posted from MacroBusiness.

So it’s yet another two days where the leaders of the EU get together for a dinner (this time it’s tarte, fine eggs/mushrooms, braised veal on bed of fresh spinach followed by a chocolate trio) and attempt to thrash out greater economic integration.

Marcy Wheeler: Eric Holder Rewards the Teams that Gave Torturers and Mortgage Fraudsters Immunity

By Marcy Wheeler. Cross posted from emptywheel

As TPM’s Ryan Reilly noted yesterday, among the awards Attorney General Eric Holder gave out at yesterday’s Attorney General’s Award Ceremony was a Distinguished Service Award to John Durham’s investigative team that chose not to prosecute Jose Rodriguez or the torturers who killed their victims.

Quelle Surprise! Spain Shows Bank Stress Tests Living Up to Their Bad Name, Dud Loans Rise 0.6% in One Month

Bank stress tests have become a contemporary exercise in “the emperor has no clothes”. Everyone by now (or at least everyone who pays attention) knows that the stress tests are an exercise in confidence building, with emphasis on the “con”.

Citigroup’s $900 Million Man Departs Abruptly

The mainstream media and Internet were abuzz with the Big Surprise of the day, the sudden exodus of Citigroup CEO Virkam Pandit, the most overpriced and underperforming CEO in the history of corporate America.

Quelle Surprise! Sorkin Tells Remarkable Whoppers to Defend His Wall Street Sources

Andrew Ross Sorkin has a remarkable piece of hogwash masquerading as a story today. His new piece, “Nowadays, Wall Street Saviors May Wish They Weren’t,” blatantly rewrites crisis history claiming that buyers of failed firms were “pressured” by the government do transactions during the crisis and the Big Bad Government got the better of them.

Michael Olenick: Mortgage Industrial Complex Continues Its Push Against Rule of Law

By Michael Olenick, creator of NASTIACO, a crowd sourced foreclosure document review system (still in alpha). You can follow him on Twitter at @michael_olenick or read his blog, Seeing Through Data

The meaning of the word “chutzpah” varies by context. In criminal court, it might refer to murdering one’s parents then asking for leniency because the perpetrator is an orphan. In family court, it might be invoked when abandoning a child, then pleading the child has been alienated from the parent who left.

We now have a property court usage: perpetrating a massive, well documented fraud then complaining that court bottlenecks – which exist solely because of fraud perpetrated by bank lawyers – cause expensive delays.

Rajiv Sethi: Of Bulls and Bair

By Rajiv Sethi, Professor of Economics, Barnard College, Columbia University & External Professor, Santa Fe Institute. Cross posted from his blog

Sheila Bair’s new book, Bull by the Horns, is both a crisis narrative and a thoughtful reflection on economic institutions and policy. The crisis narrative, with its revealing first-hand accounts of high-level meetings, high-stakes negotiations, behind-the-scenes jockeying, and clashing personalities will attract the most immediate attention. But it’s the economic analysis that will constitute the more enduring contribution.

Bill Black: The Vampire Squid Morphs into Jilted Valley Girl

By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Cross posted from New Economic Perspectives.

Matt Taibbi famously dubbed Goldman “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.” Taibbi knew his metaphor worked a deep injustice on Vampyroteuthis infernalis, a small animal that feeds on carrion and excrement (I will let the reader explore the metaphorical possibilities). Goldman Sachs’ leaders were always secretly flattered by Taibbi’s metaphor. They like being thought of as hyper-aggressive and intimidating. Saying that an investment banker’s goal is to make money is to state the obvious and causes no embarrassment.

The news flash is that Goldman Sachs has revealed her new, softer side.

Why is a Price-Fixing/Collusion Lawsuit Against the Biggest Names in Private Equity Getting Only Cursory Notice?

It’s troubling that some stinging charges against the very biggest names in private equity are getting only passing attention in the financial media.

Home Appraisers: A Market Failure?

There’s an interesting sign of homebuyer champing at the bit to lever up again with all the “housing has bottomed” talk in a New York Times article last week, “Scrutiny for Home Appraisers as the Market Struggles.” The headline signals the new complaint about appraisers: they aren’t rubber stamping deals entered into by willing buyers and sellers! They are therefore holding back the housing market!

While this frustration among housing enthusiasts is a squeaky wheel in the housing market that probably does warrant comment by the Grey Lady, there are more serious market failures in appraisal land that also deserve attention.

So Where is Schneiderman? Computerized Robosigning Has Made Its Debut

In case you had any doubts about the wisdom of state-level actions to strengthen homeowner rights, the discovery of a new type of abuse, computerized robosigning, should put them to rest.