Category Archives: Investment banks

Judge Rakoff Rejects Bank of America-Merrill Settlement, Orders Trial

Oooh, this is turning out to be fun. Judge Jed Rakoff is not putting up with Wall Street business as usual (no joke, that was part of the defense offered by Bank of America for its failure to disclose the amount of Merrill bonus payments in the merger proxy sent to shareholders to approve the […]

Guest Post: We Can’t Break Up the Giant Banks, Can We? Yes We Can!

By George Washington of Washington’s Blog. Top economists and financial experts believe that the economy cannot recover unless the big, insolvent banks are broken up in an orderly fashion. Even the Bank of International Settlements – the “Central Banks’ Central Bank” – has slammed too big to fail. As summarized by the Financial Times: The […]

Further Confirmation That Real Bank Reform is Dead on Arrival

The Financial Times tonight reports that Goldman CEO Lloyd Blankfein made “startling” remarks in Germany, for instance, that a lot of banking activity is rather thin on redeeming social value. Oh, and he admitted bankers might be paid too much, too. Gee, with revelations like that, what might he to ‘fess up to next? That […]

FSA’s Lord Turner Tells Banks to Get a Death Wish

Lord Turner, the head of the UK’s Financial Services Authority, is my new hero. He is willing to tell banks to do things that are in the public’s best interest but are singularly unpleasant and costly to the financiers. The fact that what is good for the banksters is increasingly at odds with what is […]

More Bogus Bailout Reporting: “As Big Banks Repay Bailout Money, U.S. Sees a Profit”

Clearly, the spin is in. As a post earlier today discusses, the Financial Times is running a story that claims that the Fed made money on its rescue programs, then slips in all the tidbits in the body of the article to let discerning readers know that the reporter understands that the analysis is utter […]

Goldman Gives Preferred Clients Stock Trading Tips Early, Defends Practice

Ooh, so there is gambling in Casablanca! I’m shocked, shocked! An excellent bit of sleuthing comes at the Wall Street Journal, on how Goldman has for the last two years has had “trading huddles” that lead to ideas being presented to clients before analysts changed their grades on a stock. Proprietary traders also attend the […]

Is Finance Inefficient or Too Efficient?

I have a good deal of respect for Gillian Tett, but I disagree with her analysis in a Financial Times piece today: A decade ago, it was fashionable for Western consultants, bankers and business people to decry Japan’s domestic service industry. For Japanese business sectors, ranging from milk production to financial broking, have long been […]

Rogoff Shreds "When in Doubt, Bail It Out" Policy

Grr. It was so obvious and it never occurred to me…:”When in doubt, bail it out.” I am jealous. Kenneth Rogoff, who among other things has (with Carmen Reinhart) has created a large dataset on financial crises through history, today takes on the exceedingly permissive posture the US has adopted to the banking industry, simply […]

Rogoff: The Fault Lies Not in Lehman, But in Ourselves…

Well, Ken Rogoff does not do a Shakespearean turn, but he makes a badly needed observation in his latest piece at Project Syndicate, namely, that pinning a lot of blame for the crisis on the Lehman collapse is a faulty analysis. And he picks up a pet theme of ours, that patching up the system […]

Quelle Surprise! Hank Paulson and Goldman CEO Talked to Each Other a Lot!

At this point, the New York Times story reporting that Treasury Secretary Hank Paulson and Goldman chief Lloyd Blankfein spoke frequently during the crisis is close to a “dog bites man” news item. After Goldman was the only Wall Street player involved in the discussions of what to do about the rapidly unravelling AIG, and […]

Could a "Crisis Insurance" Wrinkle Make Banks Managers More Prudent?

One of my (many) pet peeves is the lousy incentives that investment bank top brass and staff have had for some time. In particular, the advent of the “other people’s money” model has meant that everyone has reason to be cavalier. The industry has a proud tradition of people failing upwards, or at least sideways, […]

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 […]

On The Sanctity of Wall Street Pay

I am sorry to make Roger Ehrenberg an object lesson as far as this post is concerned, because I am a fan of his work. He is articulate and insightful. I have often featured his posts in Links as opposed to in posts and felt a bit bad about it, in that I wanted to […]

Denninger Savages WaPo Defense of Goldman

It simply amazes me that those who are cheerleading the seeming return of Wall Street to health overlook the extensive, hydra-headed subsidies they’ve received and continue to receive. The media has bought and is touting the line, “Hey, they (more accurately some) paid back the TARP, so what’s the beef?” Let us consider the other […]