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rffrydr
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 Posted: Sun Oct 04, 2009 9:15 pm Post subject: |
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Right on cue:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aEWxyVfGsZiY
Creditors should be okay with this capital aspect as it would only apply if the institution is teetering on dissolution anyway (and a bank is not going to recover well from BK 100% or no)--unless they were loaded up with CDS in the first place.
It's not like anything about these pillars of finance is the same anymore anyway.
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rffrydr
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| Posted: Sun Oct 04, 2009 6:06 pm Post subject: |
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It wasn't only Wachovia that failed with cap ratios over 10%. More capital and less footprint are just part of the answer and should not be overemphasized--especially at the expense of government reforming itself as part of the process. The SEC's somnambulism was inexcusable; the Office of Thrift Supervision a joke and the Finance Committee kickbacks coupled with plain old Countrywide idealism give ample space to share the pain on the government side. Fed Policy looms in the background.
I like the convertiblity of debt to equity; the living will and european assest adjusted cap. ratios. Executive pay has got to be part of it and the, radical, abolishment of "floor" ratings requirements. This can be covered in the cap. ratio rules. 
http://tinyurl.com/y92tdm4
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HenryTo
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rffrydr
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rffrydr
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| Posted: Thu Sep 24, 2009 7:42 pm Post subject: |
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"The Informant"
Too big to fail is an old story and it signifies many things. Here the subject is the essential hard asset company, ADM. The ultimate irony of the "greed is good" credo turned on its head:
http://www.thisamericanlife.org/Radio_Episode.aspx?episode=168
Anti-trust pre and post 1995.
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rffrydr
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| Posted: Wed Sep 09, 2009 9:01 pm Post subject: |
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Lord Turner taken into the trenches.
http://www.ft.com/cms/s/0/c941f226-9ca5-11de-ab58-00144feabdc0.html
After the study measuring bailout salaries well in excess of SP company averages Banks better hope the analysis stays in the FT
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rffrydr
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| Posted: Mon Sep 07, 2009 1:00 pm Post subject: |
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Saving securitization:
http://www.iosco.org/news/pdf/IOSCONEWS165.pdf
My favorite:
| Quote: | | Encourage the development of tools by investors to assist in understanding complex financial products. |
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rffrydr
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| Posted: Sat Sep 05, 2009 10:11 am Post subject: |
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Almost as an article of faith commentators have scoffed at the idea of controlling 1) bonus pay 2) derivative contract limits 3) competitive tax structures for finance. "We'll just go to greener pastures." Looks like too much as been assumed of our "free world":
http://tinyurl.com/mwng28
http://tinyurl.com/lu4259
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rffrydr
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| Posted: Tue Sep 01, 2009 7:11 pm Post subject: |
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Radical idea: bonuses are symptom not cause. That this piece of obviousness has to come from a Lord....should have been expected:
http://www.ft.com/cms/s/0/2648b542-9691-11de-84d1-00144feabdc0.html?nclick_check=1
Cut the banks (and bonuses) down to size
By Philip Stephens
Published: September 1 2009 03:00 | Last updated: September 1 2009 03:00
| Quote: | The Conservatives' George Osborne must be right. Britain's government should impose a cap on bankers' bonuses. But wait a minute, Hector Sants surely has a point when he counters it is not the job of financial regulators to fix pay rates. Politicians in London and beyond are struggling to square the circle.
The shadow chancellor has been shouting loudly about the return of inflated pay packages and bonuses in financial institutions still propped up by taxpayer guarantees. Quite right. Banks have inflicted heavy costs on the rest of society but, rescued by governments, they are returning to the bad old ways.
Now listen to Mr Sants, the chief executive of the Financial Services Authority. The FSA's role, he says, is to prevent excessive pay awards from destabilising financial institutions. The authority's new rules will damp incentives for short-term risk-taking and ensure that multi-billion-pound bonus pools are backed by adequate capital.
There is the rub. The aim is not to eliminate big pay packages but rather to ensure they are affordable. Mr Sants says the FSA has neither locus nor interest in seeking to apply social or moral judgments. If, for social or other reasons, Britain wants to cut the rewards paid to the plutocrats of financial services, that is a matter for politicians.
This is the crux of the present dilemma. A "safer" financial system leaves ample scope for pay packages that most people will rightly regard as offensively inflated. It is already happening at Goldman Sachs and, on a smaller scale, Barclays.
Step forwardLord Turner, who as chairman of the FSA is Mr Sants' boss. Last week Lord Turner threw a grenade into the debate. Thinking aloud during a roundtable discussion reported by Prospect magazine, he said bonuses were as much a symptom as a cause. Policymakers needed to ask more fundamental questions about why financial services generated such vast profits and about whether the industry had grown so big as to outstrip its usefulness to the rest of the society.
His tentative conclusions were damning. Activity for the sake of it - a characteristic of bloated and ever more complex wholesale financial markets - serves only those who manage to extract large profits from the enterprise. "Stunning" levels of pay are not a measure of efficient markets or individual brilliance, but of a market failure providing large "rents" to a small group of players.
Needless to say, such candour brought howls of angry indignation from an industry bent on getting back to business as usual. Having off-loaded their losses, bankers seem affronted by the idea that politicians or regulators might interfere in the way they run their affairs. You could almost believe the banks had been innocent victims of the crash.
One can see why Lord Turner's analysis might worry them. The proposition that the market is rigged and that institutions and individuals are making huge profits from activities that are of not much use to anyone else strikes at the heart of the carefully constructed myths of the financial services industry.
Banks still have their champions. With characteristic acuity, Boris Johnson proclaimed that Lord Turner's ideas were "crackers". The London mayor then wheeled out the facile mantra that bankers must be allowed to do as they please in the City of London lest they rush off to Paris or Frankfurt. Never mind that France's Nicolas Sarkozy and Germany's Angela Merkel are leading the charge to cap excesses.
Lord Turner may not be right in every dimension of his argument, though I am not sure why his idea of a transactions tax should be so controversial. But whatever the debate on prescriptions, he has done a considerable service in lifting the analysis beyond the superficial.
Lord Turner's is one of the few voices with real intellectual heft. That of Sir John Gieve, a former deputy governor of the Bank of England, is another. Sir John doubts that policymakers can set an optimum size for financial services, but suggests the industry could be subject to the sort of economic regulation applied to other utilities, such as telecommunications.
Just about everyone else has dodged these questions. Even Mr Osborne, so loud in his demand that something must be done, is reluctant to confront the issues raised by Lord Turner. Mistakenly, Mr Osborne has pledged to scrap the FSA and transfer its role to a complacent Bank of England.
A few short months ago, everyone agreed that things could never be the same again. Well, unless policymakers are ready to examine critically the structure, efficiency and utility of the financial services industry, back to the past is precisely where we are heading.
Even as they stash away this year's bonuses, the bankers are betting that politicians and regulators will bow before demands that they protect London's "competitiveness". I fear they may be right. Lord Turner, though, has at least mapped out an alternative. Just what do the banks offer the rest of society to deserve those vast profits?
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philip.stephens@ft.com
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rffrydr
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rffrydr
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| Posted: Sat Aug 22, 2009 11:07 pm Post subject: |
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Looks like we're getting back to the hard assets that Wall St. so much loves--but, in this case, will no doubt hate:
http://www.detnews.com/article/20090822/AUTO01/908220315/1148/rss25
Ask Ireland just what a manufacturing base means to credit bust.
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rffrydr
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| Posted: Wed Aug 19, 2009 11:56 am Post subject: |
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Much hinges on the appraisal. There just is no easy way to reform this:
http://www.cnbc.com/id/32476258
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rffrydr
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| Posted: Sat Aug 08, 2009 10:33 am Post subject: |
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Hard Assets: Just take the contracts overseas? This was a central topic of organization for the last G8. For some places the sentiment is already hardened--and it's not just us:
http://www.ft.com/cms/s/0/7cba3614-813b-11de-92e7-00144feabdc0,s01=1.html
| Quote: | Malcolm Wicks, the former energy minister appointed by Gordon Brown as his special representative for international energy issues, will say that “the time for market innocence is over” and that the government needs to do more to safeguard electricity and gas supplies.
His report, published by the Department of Energy and Climate Change, raises concerns about a new “dash for gas” that could make Britain more dependent on imports from countries such as Russia, Algeria and Nigeria |
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rffrydr
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| Posted: Fri Aug 07, 2009 8:59 am Post subject: |
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If the other banks had followed the Credit Suisse lead they'd be spared half the politics they've (we've all) endured:
http://online.wsj.com/article/SB124960277918712887.html
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