Between 1990 and 2010, eventually 37 banks would become JP Morgan Chase, Bank of America, Wells Fargo, and Citigroup. The “Big Four” retail banks in the United States collectively hold 45% of all customer bank deposits for a total of $4.6 trillion... as the biggest got biggest-er all thanks to the very visible hand of The Fed's free money.
Derivatives like credit default swaps turned a mere bubble in the US housing market into a global financial catastrophe...
Because we squandered our opportunity to correct our own problems, our problems shall be our legacy. It’s wretched how dumb we are in our greed to have everything right now in the cheapest way possible and how willing we are to force the debts of that consumption upon our grandchildren and to pretend that won’t hurt them. We live in economic denial.
At the height of the financial crisis, the unprecedented decline in swap rates below Treasury yields was seen as an anomaly. The phenomenon is now widespread, as Bloomberg notes, what Fabozzi's bible of swap-pricing calls a "perversion" is now the rule all the way from 30Y to 2Y maturities. As one analyst notes, historical interpretations of this have been destroyed and if the flip to negative spreads persists, it would signal that its roots are in a combination of regulators’ efforts to head off another financial crisis, massive corporate issuance (which we are seeing), China selling pressure (and its impact on repo markets) and "broken" wholesale money-markets.
Impunity has been the norm. The reason there have been no efforts made to criminally investigate is obvious. Former banking regulator and current securities Professor Bill Black told Bill Moyers that "Timothy Geithner, then Secretary of the Treasury, and others in the administration, with the banks, are engaged in a cover up to keep us from knowing what went wrong."
At the height of the financial crisis, the unprecedented decline in swap rates below Treasury yields was seen as an anomaly. The phenomenon is now widespread, as Bloomberg notes, what Fabozzi's bible of swap-pricing calls a "perversion" is now the rule all the way from 30Y to 2Y maturities. As one analyst notes, historical interpretations of this have been destroyed and if the flip to negative spreads persists, it would signal that its roots are in a combination of regulators’ efforts to head off another financial crisis, China selling pressure (and its impact on repo markets) and "broken" wholesale money-markets.
Janet Yellen is very alarmed that some members of Congress want to conduct a comprehensive audit of the Federal Reserve for the first time since it was created. During testimony this week, she made “central bank independence” sound like it was the holy grail. Even though every other government function is debated politically in this country, Janet Yellen insists that what the Federal Reserve does is “too important” to be influenced by the American people. Does any other government agency ever dare to make that claim? If the Fed is doing everything correctly, why should Yellen be alarmed? What does she have to hide?
With the revelations of systemic, widespread corporate criminality of banking institutions in recent years, it is clear that global Bank CEOs are becoming the new Drug Lords.
- -0.07%: Germany Secures Record Low Funding Cost at Bond Auction (WSJ)
- Pentagon Sees Possible Role for U.S. Ground Forces Against Islamic State Militants (WSJ)
- China Joins ECB in Adding Stimulus as Fed Scales Back (BBG)
- Stealthy or Normal? Analysts Diverge on PBOC’s Action (BBG)
- Sony Forecasts Massive $2B Loss as Smartphones Lag (AP)
- Islamic State campaign tests Obama's commitment to Mideast allies (Reuters)
- Brent Crude Rebounds as Libya’s Sharara Oilfield Shut (BBG)
- Market calm over Scottish vote at odds with disaster warnings (Reuters)
Let's take a look at the amount of settlements/fines from various banks and financial institutions around the world since the crisis.
Well, at least someone gets it. While just about every other central bank on the planet is giving everyone two thumbs up on the economy, the deputy chair of the Monetary Authority of Singapore (Lim Hng Kiang) said last night at a dinner that “an uneasy calm seems to have settled in markets” and that “we remain in uncharted waters.” It was quite surprising to see such pointed language from a central banking official. Mr. Lim jabbed at the “obvious” risks and said there would be “bumps on the road” ahead.
After the crisis, many expected that the blameworthy would be punished or at the least be required to return their ill-gotten gains—but they weren’t, and they didn’t. Many thought that those who were injured would be made whole, but most weren’t. And many hoped that there would be a restoration of the financial safety rules to ensure that industry leaders could no longer gamble the equity of their firms to the point of ruin. This didn’t happen, but it’s not too late. It is useful, then, to identify the persistent myths about the causes of the financial crisis and the resulting Dodd-Frank reform legislation and related implementation...."Plenty of people saw it coming, and said so. The problem wasn’t seeing, it was listening."
"The DEA doesn’t want the drug war to end,” said Nelson, when asked about a possible connection between the agency’s hatred of legal pot and its buddies in Sinaloa. “If it ends, they don’t get their toys and their budgets. Once it ends, they aren’t going to have the kind of influence in foreign government. I’m not a conspiracy theorist, but where there’s smoke there’s probably fire.”
“We’ve spent 1.3 trillion since 1972 on the drug war. What have we gotten for that? Drugs are cheaper and easier to get than ever before,”
However, the Mexican drug cartels have been bailed out by America’s drug warriors who have cracked down on prescription pain killers.
It doesn’t get any more Orwellian than this: Wall Street mega banks crash the U.S. financial system in 2008. Hundreds of thousands of financial industry workers lose their jobs. Then, beginning late last year, a rash of suspicious deaths start to occur among current and former bank employees. Next we learn that four of the Wall Street mega banks likely hold over $680 billion face amount of life insurance on their workers, payable to the banks, not the families. We ask their Federal regulator for the details of this life insurance under a Freedom of Information Act request and we’re told the information constitutes “trade secrets.”
Most Buy Side managers have no idea about the disparate business models of the four largest US banks by assets.