H.R. 977 (The Derivatives Markets Transparency and Accountability Act of 2009), from the brilliant mind of Rep. Collin Peterson (D-MN), puts restrictions on OTC contracts and would “deny the Federal Reserve the authority to establish regulations or rules with regard to clearing OTC transactions.”
Instead, OTC contracts must either be cleared centrally or reported to the CFTC. Ouch. This would pretty much end the custom options and swap business, making it very difficult to tailor specific instruments for specific risk.
The bill also gives “the CFTC the authority to suspend credit default swap trading, with the concurrence of the president.”
Uh oh.
House bill calls for OTC trading restrictions [Pensions & Investments Online]
Archive for February 2009
How fitting that the United States would choose this particular time to rework the penny and include a retrospective of its chief spokesman, the man who suspended habeas corpus, incarcerated nearly 20,000 people indefinitely without trial, and happily made and spent appropriations before Congress had even considered them. Of course that was Abe Lincoln. (Well, ok, it is his bicentennial, but the timing is still funny).
The first of four new pennies chronicling Abraham Lincoln’s rise from a small Kentucky cabin will be put into circulation Thursday to honor the 16th president’s 200th birthday.
The coin’s front is unchanged, but the reverse depicts a tiny log cabin, representing the one-room dwelling where Lincoln was born near Hodgenville, Kentucky.
The new one-cent piece is being unveiled by the U.S. Mint as part of Lincoln’s bicentennial celebration, being held Thursday morning near his birthplace.
The remaining coins, set for release later this year, show other phases of Honest Abe’s life: a young man reading while sitting on a log during his formative years in Indiana; Lincoln the state legislator speaking in front of the Illinois capitol; and the unfinished dome of the U.S. Capitol.
New Penny Chronicles Lincoln’s Early Life [Wall Street Journal/AP]
In re: the population restructuring going down at Morgan today, a little more color: first year analysts cut from IED, FID, PB are apparently receiving the following parting gifts:
We don’t have any particularly strong feelings either way about newly-appointed Treasury Secretary Tim Geithner. Still, we can’t help but feeling a twinge of regret that others, perhaps one in particular, weren’t more strongly considered for the post. What this job needs a delusional human being with a can’t lose fighter spirit, and T. Geith doesn’t seem to possess those qualities, at least at the levels exhibited by this guy:
It’s bonus day at the acronym-hating Hongkong and Shanghai Banking Corporation. According to one antsy employee, “40 days post year end seems like an awfully long time to put numbers together,” and the rumor in the ranks is that the firm “waited to see what BoA and UBS were doing to come up with their plan of attack.” This should bode well for staff hoping to be compensated in Pop Rocks (paid out over a decade, natch). For the others, our (possibly premature, unnecessary) condolences.
How To Properly Escape Capture Following Your Massive (or Relatively Massive) Financial Fraud: February 2009 Supplement
By Equity PrivateAs we prepare Part II of The Guide, we thought it would be helpful to give everyone a supplement with updated information critical to your flight after consummating a massive financial fraud. We have culled the massive system of tubes and pipes to give you real-world based guidance. Of course, you should always consult your professional financial, legal and fraud advisers before embarking on a multi-national flight from justice.
Do: Keep a low profile while traveling.
A low profile is key. Hard as it may be to lower yourself to it, Winthorpe, you should be flying coach and looking like an out of work engineer. The time for living a slightly elevated lifestyle (without the attendant social flamboyance) is after your escape, not before or during.
Don’t: Wear expensive cowboy boots and show the flight crew your hoard of $4 to $5 million in gold.
Yes. They are very impressed. And now they will never, ever forget your face.
Do: Obtain a second, third and even fourth passport.
Names must become as disposable as Depends undergarments.
Don’t: Carry all your passports at the same time in the same bag.
I mean really, do I need to explain this?
And What About Angelo Mozilo’s Deputy Tanning Bed Repairman, Huh? How’d That Crook Get Off Scott Free?
By Bess Levin
As you’ve likely observed, we’re kind of in the toilet here. And while sitting around blaming people for getting us to this point probably isn’t the *most* productive use of our time, it feels pretty good, you know? Like, yeah, focusing on a solution would be nice, but it’s no match for what it feels like to, I don’t know, leave a bag of excrement on someone’s front porch, or key his or her car. The psychological benefits of slashing some tires, or spray painting a big “You Suck” across his or her face can probably explain why Treasury Secretary Geithner has staffed an intern with compiling a comprehensive list of addresses for the homes of somewhat recognizable names across the financial services industry, and “on average, when we can expect them to be there.” But if we’re going to do this, we need to do this right, which is to say, please refer to the list just put out by Time of the “25 People to Blame for the Financial Crisis.” Anyone unfairly listed? Anyone missing? Off the top of our heads, we’re not sure “American consumers” goes far enough; how ’bout “mankind”? And also, why the hell isn’t Corey Haim’s listed? That boy’s gotten a pass for too long.
How do you handle a flagging economy convulsing with the powerful seizures of acute (and badly needed) deleveraging? Why, by creating incentives to pour more debt into the system, of course. You have to make sure people are buying flat panel TVs and SUVs on credit without impediment, as is their god-given right as Americans. You have to encourage more deposit-less mortgages. You create the impression that low interest rates are an entitlement. Raising them to meet market needs is a crime.
You have to rev up the re-fi machine. People can’t afford their mortgage anymore? Give them a tax credit, a check and then kick the living shit out of the lender until she forgives a large portion of the debt. (We call that “modification” and not “nationalization” of the debt, but it’s the same thing. Want TARP money? No? Take it anyhow, unless you want to destroy the financial system in the United States you anti-American pig. And use it to lend lend lend, damnit, or there will be hell to pay).
You ignore all the market signs that there is too much debt out there (like high rates for consumer debt and large spreads) and publicly whip any bank CEO that won’t drop their credit card rates to 5% or so to within an inch of her public reputation’s life.
And you talk the talk:
You don’t say borrowing. You say lending. You don’t say debt. You say credit. Example:
Incorrect: If we want to save this country, we have to increase the debt in this economy.
Correct: If we want to save this country, we have to increase the available credit in this economy.
AIG has managed, probably despite all efforts, to keep itself in the news the last several weeks. Among other things, it’s been enough to attract the attention of authorities in the United Kingdom. To wit:
American International Group Inc.’s financial products unit, which brought the firm to the verge of collapse with bad bets on credit-default swaps, is being investigated by U.K. regulators for possible criminal conduct.
U.K. investigators are working with authorities in the U.S. who are conducting separate reviews, the Serious Fraud Office said today in a statement. The company is cooperating with the probe, which isn’t related to insurance operations, New York- based AIG said in a separate statement.
“We will use our full range of powers to seek information and to speak to those with an inside knowledge of the company’s operations,” said Richard Alderman, director of the SFO, in the statement. “It is right for us to look into the UK operations of AIG Financial Products Corp., to determine if there has been criminal conduct.”
Know about the inside workings of AIG but the Feds leave a metallic taste in your mouth? You have other options too.
AIG Financial Products Unit Probed by U.K. Regulators [Bloomberg]
Named after university known more for golf courses than scholarship? Check.
$50 billion in assets? Check.
Substantial overseas AUM? Check.
More than double the rate of return for similar investments? Check.
Limited details on investing strategy? Check.
Small, obscure auditor? Check.
Retribution for questions about investment strategy? Check.
Hmmmm.
Is Stanford Financial’s Offer Too Good to Be True? [Businessweek]
There’s been some major collateral damage from the whole Madoff scam, including sweet old people who don’t know how they’re going to make it, and suicide. But if there’s one thing that makes you want to stop and shake your fists at the heavens and cry, “Damn, you, Bernie, damn you to hell!” it’s this: Page Six reports that so-called Madoff point man, Robert Jaffe, has been forced into hiding. Not the Sam Israel sort of hiding– though there was the matter of Jaffe refusing to show up to talk with Massachusetts regulators on several occasions– but one that’s so much worse. Bobby, according to the rag, has been missing his previously regularly scheduled manicure sessions at Salon Margrit, since mid-January. Once the highlight of his week, BJ, according to nail insiders, is “too embarrassed to show his face.” There’s an almost unbearable sadness about this permeating DBHQ. If anyone has some comforting words to offer the Jaffster, perhaps a down on his luck SAC employee or Stan O’Neal, who stopped getting his Brazilians out of shame months ago, please do so at this time.
