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"There Is No Chinese Wall. Please. Come On. This Is Wall Street"
Remember the look on one's face when one hears there is no Santa Claus, or tooth fairy? That, more or less, is what the visage on everyone's favorite CNBC anchors Becky Quick, Joe Kernen and Andrew Ross Sorkin was, when Chris Whalen matter of fact (because it is a fact) let a rare glimpse of reality on the NBC Universal distraction and entertainment show, when he said "There is no Chinese Wall. Please. Come on. This is Wall Street." Awkward silence follows. And why not: if the banks officially call frontrunning an "Asymmetric Information Initiative" to mask the simple illegality from the idiot regulators, why not call a spade a spade, and expose one more aspect of the lies and crime that is shoved down investors' throats every single day.
Yet once again, this is certainly not news. From January 2011:
Merrill Gets $10 Million Fee For Commingling Prop And Flow Traders And Frontrunning Clients
Ever since Zero Hedge's advent just over two years ago, one of the most improper things we claimed happened routinely on Wall Street, was that the big banks' prop traders would consistently, and completely against regulations, populate their massive trading floors with both flow and prop traders, who often sat side by side, within earshot and front run the big clients' orders. Some may recall that point #8 of our follow up query to Goldman's Lucas van Praag in December 2009 was precisely a request to get the seating chart together with assigned responsibilities of all Goldman traders. To wit: "we are still hoping to get a seating chart of Goldman's trading floor (via legitimate channels) which clearly discloses flow and prop traders' seats in order to disclose to the general public that flow and prop traders do not share the same information flow, especially that emanating from core clients who tend to move markets the second they announce their trading axes to Goldman's flow traders." The reason we bring it up is that once again we seem to have been just a year ahead of the curve. In a just announced settlement, the SEC has fined Merrill, and supposedly its insolvent Bank of Calcutta taxpayer funded holdco, $10 million for doing precisely this! From Bloomberg: "The SEC found that Merrill operated a proprietary trading desk from 2003 to 2005 on the firm’s main equity-trading floor in New York, where market makers received and executed customer orders. While Merrill told clients their order information would be used on a need-to-know basis, proprietary traders got information and used it to place trades on Merrill’s behalf after executing the customer orders, according to the statement"...... So... does everyone finally understand how Goldman's (et al) prop group has no trading loss day (at near 50% margins) every single day year after year now?
Q.E.D.
Fast forward to 9:30 into the clip below.
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More Chris Whalen:
Americans should go to Thomas Jefferson, Andrew Jackson and not Austrian Bankers
http://www.ritholtz.com/blog/2011/09/chris-whalen-roubini-is-wrong-about-karl-marx/
You guys didn't knew this!?
I remember working in the Equities trading floor with Lehman in London and the Prop and Client desks were all in the same massive open space area. They knew each other well and went for coffee and lunch together.
Sure, Compliance was there too, but they were more symbolic than anything else.
The whole thing is just an enormous setup to fleece clients - I never understood why any company would actually use the services of any major investment bank when they would be better of with boutique specialist firms.
Esp. Happy Hours. Compliance people for the most part need to drink. I speak from experience.
Yet more direct evidence to stay away from the rigged casino....
What's a Chinese Wall ?
Gengis Kahn knew: Worthless architecture
It's not a wall. It's not a street. It's a tunnel and it goes right under Dodd-Frank and its called the CLS Bank.
http://tradewithdave.com/?p=9905
Whalen hinted that small bank preferreds are a much better risk-adjusted value than bank common shares. I agree.
Does anyone know where you can find the universe of bank preferreds....trust or traditional??????
QuantumOnline seems fairly comprehensive, but from what I can see, almost ALL the bank preferreds out there are from the TBTF's that Whalen (and I) want to avoid.
C O R P O R A T E
................D E A T H.
•J•
V-V
Chris Whelan is one of the very few truth tellers with a blue blood pedigree. Chris could easily be just another banking apparatchik or K Street lobbyist, but he chose to be a free man. It is great to have him on Zero Hedge. Love how Kernan laughs when he repeats "...that's what they decided to show us this quarter." Kernan's derision was palpable. Chris's biggest point that I got was, "We are setting ourselves up for another systemic failure (discussing Volcker rule)".
"used it to place trades on Merrill’s behalf after executing the customer orders"
Phew! At least Merrill traded AFTER the clients' trades were executed. Because otherwise, one of the Merrill traders, while simply trying to fulfill his fiduciary responsibilities to the client, and, like Goldman, do God's work, might have inadvertently front-run one of the very Muppets people he wanted to serve.
"They're a Monopoly".
What more did he need to say. Everything flows from that.
Hes a sharp guy, and he doesn't mince words. I like him. But, they're all afraid. Watch the face of the other woman guest when she tries to respond with a challenge to some of JPM's numbers. She can barely come up with anything that doesn't scare the shit out of herself. Same thing with the reporters. It's like they're all sitting there with the wrath of God hanging over their head, wondering what might happen to their career if they say the wrong thing.
That's the power, and that's the problem with Wall Street.
Why not also call a spade a spade by not calling regulators idiots.
They are conplicit and acting by design.
Insulting regulators proves that the distraction is working and avoids focus on the true culprits.
You know - you make an excellent point. They want the public to believe that certain of their examiners/auditors are bumbling idiots when in fact they are complicit.
remember that ZH video of the launch of the chinese boat, well thats how effective a chinese wall is
I love his explanation for hedging the risk. Dont take on the risk in the 1st place. Problem solved. Less money for you? Admit the bias.
Let's face it....we bailed out the criminals...and it cost us our US AAA Credit Rating.
THAT is the Big Picture View of events 2007-2011
Now we're just trying to figure out how we can go into denial about it and pretend it never happened. But that will be how history will view it, looking back
Kernan calls out Sorkin everyday for being a pussy. Kernan's only accurate call. Squicky just dreams of Uncle Warren all the time. Maybe he'll call, maybe he'll call, oh please Warren call and make me look like a star reporter drooling over your bullshit
The Big Picture Wile E. Coyote Equity Top.
http://www.zerohedge.com/news/2012-12-24/market-analysis
Prepare for a substantial USD rally.
I haven't watched those twits in a long time, they must have no sense of embarrassment or else they must never watch their own tapes.
as we are all aware of, the 'great depression' that wiped out the retail investors [great grandparents and grandparents alike] of the not-so distant past. they [too?] had been coersed into believing that the markets were now more regulated, fair [level-playing field?], disciplined and accountable. sound familiar?
it had taken the dying off of ~ 'three generations' that prevented the market from prior parabolic pre-depession moves to get its mojo back. realizing that times have changed,... the future naivete 'x-y gen' began filling the slot machine - known today as "Schwabber's / E-tra [de] inings, 'wanna-be-flip-a-floppin-day-traders', [come one, come all, was the CNBC's and Bloomberg's clarion call to no-lose, rags-to-riches?] for another round of euphoric embellishment? it worked,... just as before, because you gotta actually live an experience to know it's true meaning [once bitten, twice shy?].
so here we are today with another generation that's literally, and figuratively been wiped-out financially - be it holding a $350k mortgage underwater by $200k [future life's equity stored in homes?] or a 401/ Keough/ IRA Plan's that have lost 20 years of your hard labor in a "BLINK" of time! yes a blink, or better said a HFT nanolized/ second [a life's saving to sum/ and it's gone -SouthPark epidode, classic]!
now, the wall is up for another 2-3 generations, but, in the meantime,... the now time - america is nothing more than a glorified 'Potemkin village', lorded over by "Sir Benji, the 'Don Quixote', Prince of Despair"!
excellent post Chris, thanks
Doctor: Mr. Burns, I'm afraid you are the sickest man in the United States. You have everything.
Mr. Burns: You mean I have pneumonia?
Doctor: Yes.
Mr. Burns: Juvenile diabetes?
Doctor: Yes.
Mr. Burns: Hysterical pregnancy?
Doctor: Uh, a little bit, yes. You also have several diseases that have just been discovered - in you.
Mr. Burns: I see. You sure you haven't just made thousands of mistakes?
Doctor: Uh, no, no, I'm afraid not.
Mr. Burns: This sounds like bad news.
Doctor: Well, you'd think so, but all of your diseases are in perfect balance. Uh, if you have a moment, I can explain.
Mr. Burns: Well...
[looks at his watch]
Mr. Burns: [the Doctor puts a tiny model house door on his desk]
Doctor: Here's the door to your body, see?
[bring up some small fuzz balls with goofy faces and limbs from under the desk]
Doctor: And these are oversized novelty germs.
[points to a different one up as he names each disease]
Doctor: That's influenza, that's bronchitis,
[holds up one]
Doctor: and this cute little cuddle-bug is pancreatic cancer. Here's what happens when they all try to get through the door at once.
[tries to cram a bunch through the model door. The "germs" get stuck]
Doctor: [Stooge-like] Woo-woo-woo-woo-woo-woo-woo. Move it, chowderhead.
[normal voice]
Doctor: We call it, "Three Stooges Syndrome".
Mr. Burns: So what you're saying is, I'm indestructible.
Doctor: Oh, no, no, in fact, even slight breeze could...
Mr. Burns: Indestructible.
Not sure how that's relevant but a simpsons quote is always good by me.
Confuscios say I do not understand Chinese wall in Wall Street. How can wall more porous than cheesecloth prevent frontrunng. ...and I don't understand baseball either. How can man walk with four balls.
And everyone marveled at the "cash cow". LOL
Auctioned off for "magic beans"!