The following post is a re-post from Rick Bookstaber’s blog. Bookstaber is a market veteran who has long and storied history of achievement. He worked at Bridgewater Associates, ran the Quantitative Equity Fund at FrontPoint Partners and was in charge of risk management at Moore Capital Management amongst other things.
A tenet of economics is that [...]

The positive earnings announcement by Wells Fargo on Wednesday was marred by a sell recommendation from Dick Bove and a lot of chatter about credit writedowns and mortgage servicing rights (MSRs). I wanted to add a few words about the report, MSRs, and bank stocks more generally.
First of all, this has been a very good [...]

John Meriwether, the 62-year old former Salomon bond trader and LTCM wizard is back for, what is this, his fourth go round.
For those of you who don’t remember the 1980s, John Meriwether was the biggest of the ‘big swinging dicks’ on Wall Street, leading Salomon Brothers to huge profits in its fixed income division. Lionized [...]

John Gapper had a good piece in the FT yesterday called “Goldman should be allowed to fail.” His conclusion is that Goldman is allowed to game the system. It is a broker-dealer masquerading as a bank. It takes on much more risk than a traditional bank. It engages in different activities. It compensates its staff [...]

You are a teacher at a local primary school. Each school day you and some of your colleagues watch over the children at the school playground to make sure all of the children follow the rules and keep their hands to themselves. Your role is to keep the children safe. Mind you, this is a [...]

Watch the hour-long retrospective which aired tonight on PBS’s Frontline.  It should be very enlightening in regards to the seeds of the bubble and meltdown.  It examines who the players in the 1990s and 2000s were, what their attitude to regulation was, and how lax regulation created a bubble and a bust.
Also see the following [...]

From the FDIC:
San Joaquin Bank, Bakersfield, California, was closed today by the California Department of Financial Institutions, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Citizens Business Bank, Ontario, California, to assume all of the deposits of San Joaquin [...]

Elizabeth Warren, chair of the Congressional Oversight Panel, is certainly looks to be fighting the good fight. At the conclusion of the Buttonwood Gathering in New York on Fixing Finance, she met with Tech Ticker’s Aaron Task and gave him quite an ear full.
Listen to what she has to say about the way the lay [...]

I was heartened to hear that Alan Greenspan has repudiated the Too Big to Fail doctrine (as practiced in the Bush and Obama Administrations) in such unequivocal terms. He almost sounded like a Teddy Roosevelt trust buster.
Nevertheless, President Obama clearly believes the line fed to him by Wall Street. He is no Teddy Roosevelt. [...]

In speaking to the Council of Foreign Relations, Greenspan said what I have heard many other credible financial experts say, namely that financial institutions which are ‘too big to fail’ (TBTF) are simply too big.
Is this Alan Greenspan talking?  I am astonished that the man we have called bubble-blower in chief is willing to [...]