Job Report Exceed’s But Job Chart Is The Scariest

 Last week's job report showed that the  U.S. economy added 175,000 jobs in May.  And the unemployment rate increased up to 7.6 per cent. The report exceeded expectations.   Bill McBride of Calculated Risk wrote that “This shows the depth of the recent employment recession — worse than any other post-war recession — and the relatively slow recovery due to the lingering effects of the housing bust and financial crisis,” I … [Read more...]

What To Expect From The SEC In 2013

SEC logo

       On February 21, the  Securities Exchange and Commission (the "SEC")    published its examination priorities for 2013 and shed some light as to what to expect from the SEC in 2013.Carlo V. di Florio, Director of the SEC’s Office of Compliance Inspections and Examinations, stated that the purpose of the 2013 priorities were to “promote compliance and communicate with investors and our registrants about areas that we perceive to … [Read more...]

Banks Find Comfort In Dodd-Frank Loopholes

Banks find comfort in Dodd-Frank

It is not surprising to find loopholes in the Dodd-Frank Act for banks.   But when loopholes allow “collateral transformation”, potential consequences are questionable. As has previously been reported, the Dodd-Frank reforms require derivative deals to be executed on a clearinghouse. This means that traders will need to post collateral while regulators will have a central place to spot risks in the market. However, it seems that … [Read more...]

The Dodd-Frank Whistleblower Program: How Effective Is It?

Under the Dodd-Frank whistleblower program, a whistle blower who helped SEC to stop a multi-million dollar fraud will receive about $50,000.    This is the first reward made under the Dodd-Frank whistleblower program for providing significant information to the SEC that expedited an investigation and prevented fraud. The 2010 Dodd-Frank Act allows SEC to reward individuals who offer high-quality information that leads to the SEC enforcement … [Read more...]

Could Glass-Steagall Act prevent Libor rate scandal?

The Libor scandal solutions are being discussed by the regulators in the US, the UK and the EU. Proposed Libor regulation options include abandoning Libor in its entirety, replacing it by the overnight swap index rate and making rate manipulation a criminal offense. Finally, replacing Libor could invalidate trillions worth of financial contracts that were based on the Libor rate. However, regulators fail to consider revising the structure of … [Read more...]

Is Nomura Insider Trading Scandal a Blow to Japanese Pride?

The Japan insider trading scandal that caused Nomura CEO to resign shows that regulation of the financial markets is a global concern. Given the lingering fallout of the economic crisis of 2008 and recent scandals, the widening case at Nomura scandal reveals that the pressure of the global financial crisis has taken a toll in the Japanese financial system. Japan has always taken pride in having an honest culture and well regulated financial … [Read more...]

Moore Capital Plans to “Go Small”

Hedge fund star Louis Bacon founder of Moore Capital says he will be giving back a large sum of to investors. Of course this is not an altruistic play as it is about the impact the euro zone crisis has had on traders as well as EU leaders’ inability to resolve it one way or another.    In any event, Moore Capital plans to “go small” because Mr. Bacon believes 18 months of disappointing investment returns requires giving back profits … [Read more...]

Make Libor Rate Manipulation a Criminal Offense, Says European Commission

In response to Libor scandal, if the European Commission has its way Libor rate manipulation will become a criminal offense. In the wake of the global settlement between Barclays Bank and regulators in the US and UK the blame game is on and fingers are pointing everywhere.    While other settlements are highly likely, civil penalties will not be enough to address pre-existing problems with Libor rate surveying procedures.   Moreover, … [Read more...]

Sandy Weill Says Break up Big Banks

Since the financial crisis of 2008 a lot of attention has focused on the role that “too big to fail” banks played in the crisis. In fact, some of the key provisions of the Dodd-Frank reform measure, in particular the Volcker Rule, are aimed at addressing the too big to fail problem.  But some observers argue that the reforms don’t go far enough and big bank model needs to be structured. In the middle of this intellectual debate, one … [Read more...]