Earlier Too-Big-To-Fail Posts
Banks? Heck, No! They’re Great Big Hedge Funds!!!
Paul Volcker knows something you don’t know and that Congressmen don’t want to know. The biggest banks have become massive collectors of hedge funds and other alternative private investment vehicles, hidden behind a facade of traditional banking. To understand this is to understand a major reason why Paul Volcker proposed the Volcker Rule. The largest banks are no longer about traditional…
Read MoreThe Morgan Stanley Puzzle
Grab your jackhammers. Let’s do some drilling. The Federal Reserve’s behavior towards Morgan Stanley is puzzling. How much of the puzzle is Morgan Stanley’s own doing, and how much is the Fed’s?
Read MoreExchange Risk: MF Global, Morgan Stanley and Basel IV
It’s their money or the taxpayers’. A global battle. Since the biggest banks remain Too Big To Fail, the only tool protecting taxpayers from bailout duty is bank capital. Jamie Dimon believes this, too, and he runs the largest bank.
Read MoreThey Can Do the Math, and You Can’t
Battles rage between shareholder money and taxpayer money in the arena of Too Big To Fail bank capital ratios. The biggest banks make capital dodging an artform. Big bank credit rating downgrades are likely to continue and will make demands on bank capital. Taxpayers should be concerned about the adequacy of capital, as captured in…
Read MoreSmothers Brothers — Fed-Style
“Mom always liked you best!” Now Morgan Stanley knows how Tommy Smothers felt. The Fed is playing favorites with our biggest banks. An article by Tom Braithwaite, Tracy Alloway and Shahien Nasiripour in today’s Financial Times described the implications of Federal Reserve actions and a potential ratings downgrade on the bank holding company’s regulatory capital.
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