• Workin' hard-ish to prevent another one of these.


    Regulators May Finally Get Around To Dealing With The Things That Almost Destroyed The World Economy A Few Years Back

    We all know that no one listens to what credit ratings agencies say, and that if you were buying up all of that RMBS eight years ago marveling at what a great deal you were getting on triple-A rated stuff, you had it coming. But wouldn’t it be neat if you could put the tiniest […]

    / Aug 15, 2014 at 1:01 PM
  • News

    The Bitcoin Bugle: Derivatives and Taxes

    Those 200,000 bitcoins that Mt. Gox forgot about? Yea, well, they’re still not legal tender, according to the IRS, which will have some unpleasant consequences in about three weeks.

    / Mar 25, 2014 at 6:50 PM
  • Hedge Funds

    Paul Singer’s Guilty Pleasure

    Derivatives may be imperiling global stability and undermining society, but the Elliott Management chief just can’t help himself.

    / Jan 23, 2014 at 3:13 PM
  • This is from, which appears to be ... her blog? I ... don't know.


    JPMorgan Finds A Better Use For Its Commodities Brainpower Than Selling Electricity

    UBS is selling its over-the-counter commodity derivatives portfolio to JPMorgan, prompting John Carney to say this: Here’s a good rule of thumb. When one bank buys a business from another bank, it’s almost always a case of regulatory arbitrage. It’s never really because of synergies or managerial talent or whatever other hokum the media relations […]

    / Aug 6, 2013 at 1:35 PM
  • Banking Butterfly1


    Bank Reform Bitch/ Ethical Fiscal Fairy/ Spandex-Clad Roller Girl/ Better Banking Butterfly Weighs In On Derivatives

    BRB aka EFF aka SP-RG, pictured above as her latest persona, the BBB, outside of Chuck Schumer’s office on Friday. Her dispatch to DB: “Here I am in front of Senator Schumer’s offices Friday morning to protest his whining to Treasury Secretary Jacob Lew to scrap CFTC rules that would regulate cross border derivatives since […]

    / Jul 15, 2013 at 4:18 PM
  • You probably didn't retweet this. You sicken me.


    For Some Reason Elizabeth Warren Is Not Entertained By The Modern Banking System

    Elizabeth Warren introduced a bill today to split nice old-timey banking (taking deposits, making loans to people and corporates) from investment banking and other assorted eeeeevil activities (trading, derivatives, etc.) and it comes with a poster. It also comes with a throwback name, “The 21st Century Glass-Steagall Act of 2013,” after the guys who last […]

    / Jul 11, 2013 at 5:58 PM
  • Ooh buildings


    Deutsche Bank Did Some Accounting Stuff

    I used to work in a business that, among other things, helped clients get financing against securities. One thing that you learn quickly in that business, and then spend the rest of your career trying to forget, is that the simplest way to get financing against securities is to sell them. You’ve got $100 of […]

    / Jul 11, 2013 at 3:05 PM

    Goldman Sachs

    From Now On Goldman Will Only Sell A Product To Clients If Some Goldman Partners Understand It

    I can’t find the quote but I recently read someone arguing that you should never worry about anything you see on the news. By definition, the argument goes, horrible things that make the news are newsworthy, and they are newsworthy because they are rare, and so the odds of you dying in a terrorist attack, […]

    / May 24, 2013 at 3:11 PM
  • Google image search for "zombie"


    Actually Lehman’s Bankruptcy Worked Out Well For A Lot Of People

    Bloomberg has a fantastic article today about how Lehman’s decaying corpse is suing a bunch of former clients, many of them wee and sympathetic nonprofits, who hosed Lehman when they terminated swaps in September 2008. Some of these lawsuits turn on disputes over when those clients, or their consultants, should have valued the swaps for […]

    / May 14, 2013 at 3:06 PM
  • The dollars above were (mm) too, but repasting into WordPress is surprisingly annoying


    Lehman’s Bankruptcy Worked Out Well For Intel, Anyway

    One possible reaction to Apple’s gigantic tax-optimized share repurchase program is to think that spending a lot of time fiddling with how to optimize your share repurchase program might mean you’re out of better ideas. You can ponder whether this Intel share repurchase trade described in a Lehman Brothers bankruptcy lawsuit filed yesterday supplies any […]

    / May 2, 2013 at 12:09 PM
  • News

    Bart Chilton Can Solve CFTC Funding, High-Frequency Trading Problem In One Fell Swoop

    If Congress won’t act to curb derivatives speculation (and fund his own agency) with a transaction fee, Bart Chilton will.

    / May 1, 2013 at 3:34 PM
  • bucket-260x195


    Prime Brokers Will Sell You Those Shares If You Want, But Wouldn’t It Be Cheaper To Rent?

    “Bucket shop” has become a general-purpose Wall Street insult – “don’t work at Blackstone, it’s a total bucket shop” – but it’s actually a particular thing, “[a]n establishment, nominally for the transaction of a stock exchange business, or business of similar character, but really for the registration of bets, or wagers, usually for small amounts, […]

    / Apr 2, 2013 at 11:58 AM
  • News

    ISDAt Wrong?

    The European Union will be very cross if it finds out that the International Swaps and Derivatives Association conspired with its members to keep out would-be members.

    / Mar 26, 2013 at 5:42 PM
  • Find the synthetic CDOs.


    Everybody Wins With Bespoke Synthetic CDOs

    Bloomberg this week had an article about how bespoke synthetic CDOs are coming back in vogue, and various people have fretted about that, because synthetic CDOs are scary, financial crisis, etc. And, sure, it’s certainly possible that the next financial crisis will be exactly like the last, only with more Cyprus.1 But today let’s talk […]

    / Mar 22, 2013 at 1:20 PM
  • News

    Derivative Of Derided Derivatives In The Works

    So credit-default swaps have a pretty bad rap in the wake of that whole financial crisis. And people apparently aren’t interested in trading things that some parts of the general public (otherwise known retail investors) blame for the aforementioned unpleasantness without actually understanding anything about CDS.

    The IntercontinentalExchange has an idea to change all of that:

    / Mar 12, 2013 at 10:42 AM
  • Hmm. Anyone got any other ideas?


    Mourn For The Derivative On Its Derivatives That Credit Suisse Wrote To Itself

    You may not believe this, but a few weeks ago I spoke to a business school class about the financial industry, and a student asked me “what would you say to someone who’s considering a career at an investment bank?” Somehow it did not occur to me to congratulate her on her humanitarian impulses. Instead, […]

    / Feb 27, 2013 at 1:23 PM


    If You Tax Derivatives, Only Derivatives Will Pay Taxes

    In general when something is headlined “A Sensible Change in Taxing Derivatives,” or “A Sensible Anything,” that’s a good sign that it’s not; things that are sensible don’t have to advertise. Also: ooh derivatives are evil ooh, so the odds are even worse. But this particular sensible change – a Victor Fleischer DealBook column about […]

    / Feb 7, 2013 at 7:13 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
  • 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
  • We need more pictures of him in his Sandy-relief outfit


    Goldman Is Looking Forward To Making Less Money On Standardized Derivatives So It Can Make Much More Money On Non-Standardized Derivatives

    How can you not love listening to Lloyd Blankfein? He spoke at this Merrill conference this morning and here are the slides, whatever; he is not a PowerPoint presenter, he is a philosopher. Let’s talk Philosophy of Lloyd.1 Lloyd and I share a number of passions, I assert without evidence, but a quirky one is […]

    / Nov 13, 2012 at 12:50 PM
  • Quikster? Meh, I could take or leave it.


    Who Is Doing What To Whom On Carl Icahn’s Netflix Trades?

    If I were the sort of guy who could come in to a company, yell at them a bunch, and get them to sell themselves to someone else at a premium, I would: do that often!, and buy lots of call options on the stock before doing it. Right? If I bought the call options […]

    / Oct 31, 2012 at 6:01 PM
  • I feel like if your name is "Skelly" you're pretty much destined to find oil in your backyard. "Levine," not.


    JPMorgan Sold An Equity Derivative To A Tulsa Oil Heiress Too Unsophisticated To Appreciate Its Beauty

    A core belief here at Dealbreaker HQ is that we’d be really good rich people.1 No conservative 401(k)s and unborn-children-college-funds for us; we’d dedicate ourselves to lives of sybaritic excess. For me, that means that if someone wants to die and leave me an oil fortune, I’ll be putting Morandis on the wall, DRCs in […]

    / Oct 10, 2012 at 4:30 PM
  • SunTrust now has Zero Coke shares, he thought and then punched himself in the face.


    Spoilsport Banking Regulators Ruin Another Derivative That Was Too Beautiful To Live

    Soon it will be time for Congress to shout at bankers about derivatives again and that’s fine, but allow me to indulge a bit in mourning for a derivative that Basel III killed today. That being of course SunTrust’s postpaid bifurcated collateralized variable share forward on its Coca-Cola stake: SunTrust Bank’s third quarter is about […]

    / Sep 6, 2012 at 7:23 PM


    When Morgan Stanley’s Merger Bankers Say No, Its Derivatives Bankers Say Yes

    I very much enjoyed this Morgan Stanley electric shenanigans case that settled yesterday. According to the complaint, this happened: KeySpan, an electric generator, realized that prices for electric generation would be going down as more capacity came online. It decided to keep up prices by cutting back its own generation. But that’s dumb, because then […]

    / Aug 8, 2012 at 5:05 PM


    The City Of Baltimore Didn’t Need To Subsidize Your Mortgage Through Libor

    We talked the other day about municipalities and the Libor shenanigans. Quick recap: 1) Municipalities wanted long-term fixed-rate debt. 2) They got it indirectly by selling long-term floating-rate debt and buying interest rate swaps from banks. 3) At first, this was cheaper than issuing fixed-rate debt.* 4) Later, though, sometimes it turned out to be […]

    / Jul 13, 2012 at 6:11 PM
  • Whaledemort

    The Whale and the Quants

    If you’d like some non-real-time insight into the London Whale, may I highly recommend this oral history, by Edinburgh sociologists Donald MacKenzie and Taylor Spears, of how investment banks came to price and trade and hedge things like the index CDS that the Whale dabbled in? It made me tear up a little. It is […]

    / Jun 13, 2012 at 11:19 AM
  • News

    Paying Bankers In Derivatives Worked Out So Well For Credit Suisse, Let’s All Do It

    BreakingViews has a couple of posts up about one of my favorite things in the financial universe, Credit Suisse’s habit of paying its bankers in structured credit instruments that take pages to describe. How’s that going? Great: Three years ago, around 2,000 employees were forced to take some $5 billion of the riskiest assets from […]

    / Jun 12, 2012 at 3:53 PM
  • Banks

    Spare Some Worrying For Ratings-Triggered Collateral

    Remember how a week ago people went around bothering themselves about Bank of America’s derivatives? Specifically how if they get downgraded, as seems plausible, they will have to come up with a zillion more dollars for derivative collateral? And how earlier this week they did the same for Morgan Stanley? Anyway we talked about it […]

    / May 11, 2012 at 6:22 PM

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