Foreign Currency Losses Were Telegraphed in Advance

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In a recent Wall Street Journal article by Alex Frangos, ““Top Banks Missed Call Y100 Level Soon,” it was reported that not a single analyst from 15 financial institutions expected the Japanese Yen to fall to 100 per US Dollar.  Across the board, investors in traditional safe haven assets such as gold and foreign currency were caught unprepared by the impact of Quantitative Easing III and other money creating efforts by the world's central … [Read more...]

Jamie Dimon: Head or Tails

J.P. Morgan boss--Jamie Dimon

    Legends often die a slow, painful death on Wall Street with an inevitable collapse at the end.  That was the story for Lehman Brothers, Bear Stearns, and a host of others.  It is also a pattern that seems to be repeating itself with Jamie Dimon, the venerable Chairman and Chief Executive Officer of JP Morgan, considered by many to be the standard bearer for blue chip banking firms. Like so many others, however, JP Morgan … [Read more...]

New Light for Consumer Financial Protection Bureau

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The central mission of the Consumer Financial Protection Bureau (CFPB) is to make markets for consumer financial products and services work for Americans. One of the key elements of the U.S. Securities and Exchange Commission’s (SEC) mission is to protect investors. Now, the SEC has a new chief, and her background and track record could lead to a clash between the missions of these two “protective” agencies. Goal #1 of the CFPB is to … [Read more...]

The TRUE Cost of Corporate Greed

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The news of layoffs seems to be the new “normal” in financial industry.  As banks stray out of traditional areas and it’s the rank and file who seem to take the hit, the cost of a return to normalcy is incredibly high. The True cost of corporate greed is being shown. UBS has agreed to pay about $1.5 billion to settle a portion of the claims against it for securities trading violations. And now there are 10,000 layoffs looming as part of … [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...]

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...]