Lehman Brothers

Pope Pissed After Feds Force FATCA Down Vatican City Bankers' Throats

While Pope Francis has called for an end of "the cult of money and the dictatorship of an economy," The Vatican City has been forced into sharing information with the US. Despite the oft-quoted Book of Proverbs prose that "[T]he borrower becomes the lender's slave," in the case of the world's largest borrower - the US government - it still acts like everyone’s master, including dictating the most ridiculous terms on financial agreements like this.

Bond Rout Continues: Bunds Rise Above 1%; 30Y "Golden Crossed"; Kuroda Sends Yen Soaring

After a Chinese session which following the MSCI failure to include Chinese stocks in its EM index, if only for the time being, was largely a dud with Shanghai stocks actually dropping by 0.1% after a late day selloff, eyes turned to Europe, which once again did not disappoint and where the bond rout continued apace, with the 10Y Bund yield spiking just after the European open, and rising above 1.05%, the widest level since September 19, before recouping some losses and trading just around 1.00% at last check.

A Member Of The Middle Class Responds To Jon Hilsenrath

Dear Mr Hilsenrath and your Central Bank Team,

This is Joe from the disappearing Middle Class in America.  You asked me the other day to drop you a note if I felt that something was wrong.  What I’m having trouble with is “why” you’re asking me if anything is wrong!?

So let me explain.

Fed Mouthpiece Jon Hilsenrath Furious "Stingy" US Consumers Refuse To Buy The "Recovery" Propaganda

Dear American Consumer,

This is The Wall Street Journal. We’re writing to ask if something is bothering you. The sun shined in April and you didn’t spend much money. You have been saving more too. You socked away 5.6% of your income in April after taxes, even more than in March. This saving is not like you. What’s up?...  The Federal Reserve is counting on you too. Fed officials want to start raising the cost of your borrowing because they worry they’ve been giving you a free ride for too long with zero interest rates. We listen to Fed officials all of the time here at The Wall Street Journal, and they just can’t figure you out.

Frontrunning: May 29

  • Former House Speaker Hastert indicted on federal charges (Reuters)
  • Blatter expected to win re-election despite soccer corruption scandal (Reuters)
  • NYSE Looks to Ease Late-Day Pileup (WSJ)
  • What Will Happen to a Generation of Wall Street Traders Who Have Never Seen a Rate Hike? (BBG)
  • Japan spending slump casts doubt on central bank optimism  (Reuters)
  • Unclear rules, market volatility take toll on bank capital  (Reuters)
  • Greece Told Budget a Red Line for Creditors Venting at G-7 (BBG)
  • The Economist Who Realized How Crazy We Are (Michael Lewis)
  • Pimco Said to Have Considered Goldman’s Cohn for Top Job (BBG)

How China Covered The World In "Liquidity Swap Lines"

Central bank liquidity lines like those the Fed used to bailout the world seven years ago have become a fixture of the post crisis financial system. Since 2009, China has essentially blanketed the globe with yuan liquidity lines, inking swap agreements with nearly three dozen countries with the primary goal of increasing the degree to which the renminbi is used in international trade.

GoldCore's picture

Gillian Tett, markets and finance commentator and an Assistant Editor and former U.S. Managing Editor of the Financial Times, wrote an important and little noticed article last week questioning complacency on the part of European policy makers regarding a Greek default and potential exit or ‘Grexit’. Tett argues that a Greek failure would lead, as Lehman’s did to “wider policy uncertainty: when Lehman failed, the entire paradigm for finance suddenly seemed unpredictable”.

"But Still There Is Faith In The Central Bank..."

“[W]e have placed the exclusive custody of our entire banking reserve in the hands of a single board of directors not particularly trained for the duty - who might be called 'amateurs'... But still there is a faith in the Bank, contrary to experience, and despising evidence.

How BofA's Depositors Funded The Bank's "Fugazi P&L"

When we first exposed in February how yet another bank - Bank of America - has been quietly preserving the post Glass-Steagall world in which cash depositing taxpayers are on the hook for a bank's stupidity, some shrugged it off and looked to stress test to solve all the problems. However, it appears - for once - the SEC is not willing to just ignore the bank's actions. Just as JPMorgan's CIO Office, aka the London Whale, took advantage of fungible, taxpayer-insured funding in the form of excess US deposits over loans, to corner the US credit market (in what was clearly a directional prop trade); so, as WSJ reports, The SEC is investigating whether BofA broke rules designed to safeguard client accounts, potentially putting retail-brokerage funds at risk in order to generate more profits using large complex trades.

Reggie Middleton's picture

This may take you the entire weekend to digest, but if you are an unsecured creditor/lender (have a checking, savings or demand deposit account) to a euro zone bank, I would consider it your fiduciary responsibility to yourself to sit down and parse this piece with care and aplomb!