Matt Levine

  • He & the dog may just have to be my pictorial shorthand for crappy corporate governance, like Bob Diamond is for Libor manipulation.


    Earnings-Manipulating Managers Just Want To Make Shareholders Happy

    I’m generally fond of companies that find creative ways to access the public equity markets while not giving away all the “rights” that traditionally go to “owners” of “companies.” I mean, you want money, you ask people for money, you give them the terms that you need to give them to get the money: what […]

    / Dec 18, 2012 at 2:05 PM
  • If I were better at Excel this would be easier to update. Scatterplots get fiddly fast.


    Convicted Insider Traders Probably Regretting Association With Group Calling Itself “Fight Club”

    It gives me no particular pleasure to update the ol’ insider trading sentencing chart every time a new person is convicted of insider trading, but I view it as a public service for the less instinctually law-abiding among our readers and here we are: After three days of deliberations, a jury convicted Anthony Chiasson, a […]

    / Dec 17, 2012 at 6:39 PM
  • So ... I hope it's him, no?


    Banker Got In Trouble For Telling Client To Be Honest With Research Analysts

    You may be aware that once there was a problem and this was the problem: Investment bankers wanted to win underwriting business. They realized that having their research analysts shout “BUY BUY BUY!” about every company they underwrote would help to win this business. So they went to their analysts and were all “do that.” […]

    / Dec 17, 2012 at 3:24 PM
  • Eichler does not seem particularly interested in being photographed for, y'know, a salesman of investment advisory services.


    Investment Manager Without Ethics Policy Acted Unethically

    Peter Eichler and his firm Aletheia Research and Management seem to have had a good run; Aletheia managed $10 billion and per DealBook “Mr. Eichler’s stellar investment performance attracted the likes of Goldman Sachs and Morgan Stanley, which entrusted him with millions of dollars of their clients’ money.” But now that Aletheia is in bankruptcy […]

    / Dec 17, 2012 at 10:18 AM
  • News

    Too Much Information Can’t Be Good For You

    One thing you could think about the last few decades’ improvement in market efficiency and speed and data and computerization and all that good stuff is that people get mad about increasingly smaller forms of cheating. Time was, huge stock manipulation got you in trouble, but the sort of window-dressing manipulatino that added 30 basis […]

    / Dec 14, 2012 at 4:40 PM
  • Bloomberg GP is great because it looks like these are actual prices but I'm not sure there are underlying trades, especially after that spike. Is this bond trading at 71? Mehhh.


    Bank of America And MBIA Pretty Much Just Fighting Each Other For Fun Now

    There are some financial jobs that come with a perhaps undeserved swashbuckling cachet. “Oh, you know, I do hostile takeovers,” you say, and a certain crowd will treat you like you just got back from plundering a Spanish ship-of-the-line, even though you mostly sit in a cubicle updating spreadsheets and changing the wording in press […]

    / Dec 14, 2012 at 10:11 AM
  • Bob Diamond, now and forever


    Fines For Banks Who Made Up Numbers Seem To Be Made-Up Numbers

    I assume that there’s someone somewhere whose job it is to think about this, but the big Libor fine that appears to be in UBS’s future got me wondering: how do they decide how big these fines are supposed to be? In most fraud cases you can tot up how much someone stole and use […]

    / Dec 13, 2012 at 5:30 PM
  • Honestly she has nothing to do with this at all, but she's (1) European and (2) kind of fun to look at.


    On The Bright Side, European Banking Bonuses May Be A Lot More Predictable

    It’s probably good news that “European Union finance ministers reached a landmark deal early Thursday that would bring many of the continent’s banks under a single supervisor,” but of course it wouldn’t be Europe without some self-evidently bad ideas for financial regulation, so today we also get this: Bankers’ bonuses in Europe would be capped […]

    / Dec 13, 2012 at 1:26 PM
  • I feel like I wouldn't know this was him if not for the name tag.


    Warren Buffett Bought Some Stock

    I’ve always been fond of Warren Buffett’s schtick of being an adorable Cherry-Coke-drinking grandfather whose fuzzy sweaters hide some sharp elbows, talking up old-timey value investing while making his money on distressed sweetheart deals, and railing against derivatives while doing lots of shady ones. So I’m pleased that today he basically announced “we bought back […]

    / Dec 12, 2012 at 4:51 PM
  • Of course they could probably do it.


    The SEC Demanded That JPMorgan Provide More Disclosure About Goldman Sachs’s Prop Trading

    I enjoyed Bloomberg’s story about how the SEC was pestering JPMorgan to better disclose its proprietary trading activities well in advance of the London Whale fiasco. If you just read the headline you’d be all “oh look how prescient the SEC was,” but if you read the actual letters, not so much. Here is my […]

    / Dec 12, 2012 at 12:36 PM
  • Gray = TAF-time


    Receiving Government TAF Funding Was Just The Wakeup Call Banks Needed To Get Their Acts Together

    While we’re celebrating successful bailouts I suppose it’s worth looking at this VoxEU post and related paper from two Swiss economists about the Fed’s Term Auction Facility, which provided short-term secured funding to U.S. banks who might otherwise have trouble getting such funding between December 2007 and March 2010. The authors ask the questions that […]

    / Dec 12, 2012 at 9:55 AM
  • Today the blue line reaches zero and the circle of life is complete


    AIG’s Remaining Bailout Reduced To Rounding Error

    A while back I built a spreadsheet to do math about AIG, and it took me a long time and led to basically one short post with what I still think was a rather lovely blobby picture, so I’m just going to shamelessly reuse that spreadsheet with slight updates and be all OOH LOOK AN […]

    / Dec 11, 2012 at 5:47 PM
  • Jack Bogle


    Markets Ruined By Too Much, Too Little Liquidity

    A cool thing about financial markets is that every trade has two sides, so everything that happens, someone can complain about. “Economic growth is too robust!,” someone probably says, when it is. Does that help explain the difference between this CNBC article about investors who are mad that there’s too much trading in the financial […]

    / Dec 11, 2012 at 1:50 PM
  • I was gonna give you more Bob Diamond, but Guido Ravoet of the European Banking Federation is surprisingly dapper and like stubble-goateed.


    Banks In Trouble For Making Up An Interest Rate In Response To Request For Made-Up Interest Rate

    The best way to read this Journal article about how a bunch of banks manipulated Euribor may be: while whistling the theme from The Great Escape: The goal was for Euribor to be manipulation-proof. … Instead of asking each bank how much it would cost it to borrow from a fellow bank, Euribor was based […]

    / Dec 10, 2012 at 3:22 PM
  • Put spreads!


    Where Did Deutsche Bank Get The Losses That It Ignored Until They Went Away?

    Every financial contract is subject to a bunch of risks, and in some sense each of those risks affects its value. There’s some chance that an asteroid will crash into the earth next year, rendering your 30-year interest rate swap considerably less valuable, and if you’re so inclined you can discount its value for that […]

    / Dec 10, 2012 at 11:04 AM
  • This is an odd project for him no?


    Al Gore Wants You To Conserve Your Shares

    Here is a pleasing story that is probably not a thing, but still a thematically relevant non-thing: Corporations would award long-term shareholders “loyalty rewards” of extra dividends, warrants, and additional voting rights as incentives to overcome short-term earnings focuses of corporations and investors, according to a concept Mercer is developing with two other organizations. Good […]

    / Dec 7, 2012 at 3:48 PM
  • netflix-ceo-reed-hastings


    Netflix CEO Doesn’t See Why Anyone Would Care How Much Netflix People Watch

    It’s easy to make fun of the SEC for wanting to sue Netflix over a Facebook post. Netflix, Facebook, and the SEC are all a little funny, and bring them all together and you get a delightful orgy of hip-five-years-ago clumsiness. Also, like, olds, get over yourselves, everyone is on Facebook, why should I call […]

    / Dec 7, 2012 at 10:14 AM
  • Too much?


    Soon Window-Dressing Won’t Work

    Will it? I don’t know. The Wall Street Journal has a good article today about creepy stuff going on around window-dressing, where investment managers bid up the illiquid stocks they own on the last day of a quarter to make their quarterly numbers look good and increase their fee income and stuff. Sadly the Journal […]

    / Dec 6, 2012 at 4:28 PM
  • With co-CEOs, etc., there's no really satisfying picture for DB. Presumably this isn't Jain's fault.


    Deutsche Bank Ignored Some “Losses” Until They Went Away

    Oh man, what is going on in this FT article? Here is the bottom line: In a series of complaints to US regulators, two risk managers and one trader have told officials that Deutsche had in effect hidden billions of dollars of losses. “By doing so, the bank was able to maintain its carefully crafted […]

    / Dec 6, 2012 at 9:38 AM
  • "Bull leapers" fresco from Knossos. There's all sorts of interesting archaeological debate about what exactly is going on here, but I confess I'd trade it all for a photograph of an actual cow standing next to a Greek temple. You can't win them all.


    Greek Bonds Now Defaulted, Also Extra Attractive

    You can see why no one likes rating agencies. It’s not exactly a surprise to anyone that Greece’s debt situation is Not Good, so the fact that S&P just downgraded Greece to selective default is (1) not particularly helpful to anyone attempting to make an investment decision re: Greek bonds and (2) not particularly helpful […]

    / Dec 5, 2012 at 6:03 PM
  • jim bob moffett


    Freeport-McMoRan Putting The McMoRan Back In Freeport-McMoran

    Others have noted that Citi’s announcement of 11,000 layoffs today came with a larger than usual helping of corporate jargon, but this morning’s other big news release – copper producer Freeport-McMoRan’s double-barrelled acquisition of oil companies Plains Exploration and McMoRan Exploration – lacks one favorite piece of corporatese. Also it lacks layoffs. Where are the […]

    / Dec 5, 2012 at 12:40 PM
  • Btw he's still looking for a white knight if you're available


    Rochdale Trader “Hedged” His Fraud With Much Worse Fraud

    A thing we sometimes like to do around here is use stories ripped from the headlines to illustrate to you, in case hypothetically this should ever be of any practical interest, how – and how not – to safely and effectively engage in financial fraud. This Rochdale guy was just arrested by the FBI, so […]

    / Dec 4, 2012 at 6:11 PM
  • D'you think he'll also frame this patent, hang it on his wall, and lean over it meaningfully?


    Bill Gross Patents Way To Count

    Mazel tov to Bill Gross on his patent for using arithmetic in certain ways! Here it is in patentese; here it is in English: Bill Gross, who runs the world’s largest mutual fund at Pacific Investment Management Co., received a U.S. patent for the methodology behind a global bond index that weighs countries by the […]

    / Dec 4, 2012 at 3:24 PM


    Study Suggests High Frequency Trading Might Cost Small Investors Almost One One-Hundredth Of One Percent Of Their Investments

    What do you think of the big HFT study? It’s this big HFT study that CFTC chief economist Andrei Kirilenko conducted on S&P 500 e-mini futures at the CME, and it’s already inspired a metaphor from CFTC commissioner and all-purpose spinner of metaphors Bart Chilton: Mr. Chilton said that the study would make it easier […]

    / Dec 4, 2012 at 10:02 AM
  • Source: Bloomberg: obvs.


    Greece Sells Low, Buys High

    Here is a thing that might be worth considering about this here Greek bond buyback: That’s the entire history of the shortest-dated of bonds targeted for a buyback at, you might notice, their all-time high price.1 Various people have various reactions to this but one reaction that no one can have is of the variety […]

    / Dec 3, 2012 at 3:44 PM
  • Also, just, is this good or bad? Like on the one hand 5% up-front(ish) for something where you have no(ish) more risk is pretty good. On the other hand 5% edge on a 30-year product where you do a lot of underwriting work and retain some risk for, like, ever, isn't *that* amazing is it?


    Banks Making Up For Bad Old Mortgages By Charging More For Good New Ones

    There are lots of things to worry about in the world and somewhere on the list is the fact that, while yields on agency mortgage-backed securities are really really really low, the rate you’ll pay for a new mortgage is only really low, so a couple of reallys have fallen off a truck somewhere. This […]

    / Dec 3, 2012 at 11:50 AM
  • cows, possibly European


    EFSF Conveniently Downgraded

    Here are two tiny little puzzles about Moody’s’s’s downgrade of the European Financial Stability Facility from Aaa to Aa1 just now. But first, here is some math on EFSF guarantees; basically every €100 of EFSF bonds has €165 of member guarantees, of which €103ish were Aaa-rated and €62ish were not. Until Moody’s downgraded France last […]

    / Nov 30, 2012 at 6:17 PM
  • What? Can *YOU* name the current head - sorry, Acting Chairman - of the FDIC? No Googling.


    Some Banks Hoping To Be Too Small To Fail

    I feel like if I were the Financial Services Roundtable and I wanted to send a letter to Congress telling them to get rid of a rule that gives lashings of government support to little banks at the arguable expense of, um, this cast of ne’er-do-wells, I would do it anonymously. Or, like, I’d try […]

    / Nov 30, 2012 at 5:29 PM

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