Ever Since the 2008 Financial Crisis

I strongly disagree with Steven Rattner's opinion in today's New York Times that Andrew Jackson did more than most presidents to damage our financial system and our economy. I suppose it comes from reading Thirteen Bankers by Simon Johnson and James Kavak.

A Perfect Judgement

A.I.G. Boss Wins Suit but Loses The War is the perfect result.  Hank Greenberg makes his point at grotesque legal expense and zero re numeration.

HSBC what a Shareholder Screw Up

HSBC Plans to Overhaul its operations with a 50,000 employee layoff.  In the annals of business history the missteps of the Hong Kong Shanghai bank's move to the west was the worst.

Warren Disappointed With S.E.C. Chief

In a letter Senator Warren says she is disappointed with S.E.C. chief.  Well duhhhhh. The S.E.C. is an agency regulated by the regulatees.  Mary Jo White, the current Chairman of the S.E.C., went through the revolving door of government and law firms specializing in finance so many times that she has to recuse herself from practically every judicial action the agency enters into. From an investors point of view its a worthless agency full of lawyers who have no understanding of worthwhile investment activity. If you don't believe me then ask Harry Markopolos who painstakingly described the impossibility of Bernie Madoff to the SEC without result.

Bankers Seeking Rents

Wall Street is Using the Power of Dodd-Frank Against Itself by Adam Davidson correctly identifies how complexity helps Bankers in their "Rent Seeking."  Never the less the solution is glaringly obvious but never thought of, which is to reduce the concentration in the finance business so that the usual market forces of trust and collateral work at self regulating the industry. When bankers ask themselves whether an ersatz derivative product is worth it versus whether its legal is where the line which when crossed enters the realm of corruption.  A Too Big To Fail institution's instrument made good by the taxpayer doesn't suffer from market forces determining it to be worthless in the same manner as the same instrument from a small bank who could fail.  A simple re-forming of Dodd-Frank would be to require all financial institutions; be they Banks, Funds, Insurance Companies, to split themselves into units the size of one tenth of one percent of GDP in assets they control.  If a unit should grow to a two tenths of one percent level of assets it controls then it needs to split self again. With every institution in a position of easy failure then, for example, Merrill Lynch's full court embrace of worthless mortgage backed securities would have fired Stanley Oneal rather than giving him a 100 million dollar bonus and the taxpayer a depression.        

Vampire? How about Loser

My response to Paul Krugman's Wall Street Vampires editorial  is that they are a bunch of losers.

Rather than call Wall Street vampires. call them for what they really are: losers. After 2008 any informed corporate finance officer and local government entity in the world receiving a call from a Wall Street banker with a solution to some made up risk hangs up the phone. The only customers left are those stupid enough to believe, other big banks.

The Market is walking away from the ersatz financial products that Wall Street foisted on corporations and municipalities so that no matter what is spent for lobbyists to de-fang Dodd Frank, nobody wants to buy the "heads I win, tails you lose" crap they offer.

Relief for Banks that Rarely Fail

Rule Relief for Banks at Low Risk explains FDIC Vice Chairman Thomas Hoenig's proposal  for regulatory relief from Dodd Frank for Banks with simple easy to understand operations. Its a terrific proposal from an Agency for which I have high regard.