asterisk2a + financialmarket   21

Euro-Krise: Warum die Rettung der spanischen Banken gescheitert ist - SPIEGEL ONLINE
The crisis around Europe show, that market is, can become, a herd phenomenon. Where one problem or effect is increased by financial media concentration and analysis - and the market is piling in.

Example, Spain's 10yr is around 7%. But Belgium has very similar problems and even higher Debt/GDP as Spain, but Belgium's rates increases are negligible if one just listened to the media. And forgets about the facts.

The same is about Moody's warning about Core Risks, and potential downgrades. Media and Market and Major in-house analysis (from banks, hedge fonds and investment banks) are yet shy about adding the numbers of potential risks and liabilities as well as already existing liabilities through existing bailout agreements. Well ... till it isn't any more according to the majority of market participants. And then for Germany, yields will rise and will see a potential over reaction first.

The Crowd has certain psychological characteristics. Period. Proven above.
behavioral  finance  behavioral  economics  2012  sovereign  debt  crisis  Europe  PIIGS  ratingagencies  market-failure  market-mechanism  market  dynamics  psychology  bankrun  financialmarket  equilibrium  economic-thought  economic  model  economic  history  economic  multiple  equilibria  Chaos  theory 
july 2012 by asterisk2a
Op-Ed about Tim Geithner and his time before Treasury Secretary. And Bove's thought Dodd-Frank and cost of regulation effects.
Op-Ed about Tim Geithner and his time before Treasury Secretary.

Rochdale’s Bove Doubts Volcker Rule Will Be Enacted (Audio)
Mar 2, 2012
Richard Bove, an analyst at Rochdale Securities LLC, says the Volcker Rule "is probably dead." Bove talks with Bloomberg's Ken Prewitt and Tom Keene on Bloomberg Radio's "Bloomberg Surveillance."

http://media.bloomberg.com/bb/avfile/News/Surveillance/v0VOtPXYbrd8.mp3
reform  regulation  financialmarket  Dodd-Frank  VolckerRule  timgeithner 
march 2012 by asterisk2a
Sweden Revamps Central Bank Tool Kit on Crisis - Bloomberg
The crisis has demonstrated that central bank models don’t take financial system risks properly into account, Ingves said, adding that it’s necessary to design econometric models that better catch the dynamics of the global economy.

Federal Reserve Chairman Ben S. Bernanke last month signaled he also may be changing his view on the degree to which asset prices should be incorporated in monetary policy, a tool he in 2002 deemed “far too blunt” to prevent bubbles. “The possibility that monetary policy could be used directly to support financial stability goals, at least on the margin, should not be ruled out,” Bernanke said on Oct. 18 in a speech in Boston.
GFC  financialcrisis  financialmarket  centralbanks  lesson  economics  model  academia  academics  monetary  policy  tools  error  folloy  monetarism  leverage  deleveraging  Riksbank  ECB  Fed  balancesheet  QE  reform  history 
november 2011 by asterisk2a
In Aftermath of Financial Crisis, Who\'s Being Held Responsible? - YouTube
As anger over the financial crisis lingers, questions remain as to who has been held accountable for their role in creating the conditions that led to the meltdown ... and who has not. Ray Suarez reports

... there is no law against greed, recklessness, failure, ignorance,
... no solid case could be made so far in that much complex financial world with so much participants, criminal behavior,
... and then there are missing resources on the side of enforcement
... revolving door between private and public sector. and the lobby
...
GFC  responsibility  accountability  settelment  SEC  investigation  goldmansachs  Mozilo  CountrywideFinancial  FinancialCrisisInquiryCommission  financialcrisis  financialmarket  lobby  banking  prosecution 
november 2011 by asterisk2a
media.bloomberg.com/bb/avfile/News/Surveillance/v2zpEry96Vno.mp3
Bloomberg’s Harper Says Bank Exposure to Europe Clouded (Audio)
Nov 16, 2011
Bloomberg reporter Christine Harper says U.S. bank investors are being kept in the dark about exposure to European sovereign default. Harper talks with Bloomberg's Ken Prewitt and Tom Keene on Bloomberg Radio's "Bloomberg Surveillance."

- ISDA - the body for CDS / Derivatives decided that greece 50% PSI (haircut) is not default,
- bc ISDA is owned by banks, if they would rule it as default scenario - everyone would have owed somebody something - which would have introduced great uncertainty, volatility, share price losses
- did it in their own interest.
= this equals to collusion in an oligopolistic market.

http://www.bloomberg.com/news/2011-11-16/jpmorgan-joins-goldman-keeping-investors-in-dark-on-italy-derivatives-risk.html
ISDA  CDS  derivatives  collusion  oligopol  financialmarket  Greece  default  2011  OTC  exposure  sovereign  debt  crisis  PIIGS  accounting  fraud  transparency  confidence 
november 2011 by asterisk2a
JPMorgan Joins Goldman Keeping Italy Debt Risk in Dark - Bloomberg
tied together w bungee cords

JPMorgan Chase & Co. (JPM) and Goldman Sachs Group Inc. (GS), among the world’s biggest traders of credit derivatives, disclosed to shareholders that they have sold protection on more than $5 trillion of debt globally.

JPMorgan said in its third-quarter SEC filing that more than 98 percent of the credit-default swaps the New York-based bank has written on PIIGS debt is balanced by CDS contracts purchased on the same bonds.

By contrast, Goldman Sachs discloses only what it calls “funded” exposure to PIIGS debt -- $4.16 billion before hedges and $2.46 billion after, as of Sept. 30. Those amounts exclude commitments or contingent payments, such as credit-default swaps, said Lucas van Praag, a spokesman for the bank.

“Their position is you don’t need to know the risks, which is why they’re giving you net numbers,” said Nomi Prins, “Net is only as good as the counterparties on each side of the net -- that’s why it’s misleading in a fluid, dynamic market.”
jpmorgan  goldmansachs  sovereign  debt  exposure  derivatives  2011  PIIGS  CDS  toobigtofail  counterpartyrisk  citigroup  bankofamerica  boa  morganstanley  USA  Europe  lehmanbrothers  crisis  analysis  financialmarket  default  liquidity  solvency  confidence  trust 
november 2011 by asterisk2a
Credit-Default Swap Risk Bomb Is Wired to Explode: Mark Buchanan - Bloomberg
The European nations are linked in a network of debts, as Bill Marsh recently illustrated in the New York Times with a beautiful piece of graphic art. Greece and Italy are prominent; Ireland, Portugal and Spain lurk ominously nearby. France and Germany seem exposed, too, as does the U.S.
The image is like a complex wiring diagram for a ticking debt bomb. Yet what it shows may be less important than what it leaves out: a largely invisible network of ties among institutions around the world, which could ultimately cause global financial chaos.
This hidden network has been created by institutions that buy and sell unregulated credit-default swaps. These are essentially insurance contracts on bonds; in the event of a default on the bond, the seller of the swap promises to pay the buyer the bond’s value.

The researchers showed that too much risk sharing can make it easy for distress to spread like a virus.
CDS  Europe  bomb  debt  bubble  2011  OTC  sovereign  crisis  unknown  toobigtofail  2008  AIG  risk  system  systemicrisk  problems  exposure  Greece  PIIGS  tippingpoint  history  lesson  economics  Financalmeltdown  FinancialCrisisInquiryCommission  financialmarket  financialmarkets  financialcrisis  finance 
november 2011 by asterisk2a
Wolfgang Munchau On How The Greek Rollover "Deal" Is A Toxic CDO | zero hedge
"This structure is still not quite so complex as some of the more elaborate CDOs we have encountered in the global financial crisis. If you take some time to work through the arrows and boxes, you see relatively quickly that this complex structure is not a private sector participation at all. Rather it is a private sector bail-out...

The punchline is not surprising, but it is funny:
The rollover agreement represents, from an economic point of view, nothing but a collateralised bond. It subordinates all other bondholders. The rating agencies would normally not hesitate to attach a default rating to Greek government debt.
So the solution is to create a complex structure, and claim that it is technically not a collateralised bond, but something that defies definition.
transparency  financial  finance  financialcrisis  financialmarket  ratingagencies  default  greece  PIIGS  EFSF  ESM  bailout  2011  germany  ECB  angelamerkel  ponzischeme  CDO  SIV  scam  sovereign  debt  crisis 
july 2011 by asterisk2a
Was LinkedIn Scammed? - NYTimes.com
People argue that after Linkedin was waited so long for IPO ... that the huge difference between initial price and opening price, that the banks mis priced the IPO

New York Stock Exchange, they opened not at $45, or anywhere near it. The opening price was $83 a share, some 84 percent higher than the I.P.O. price. By the time the clock had struck noon, the stock had vaulted to more than $120 a share, before settling down to $94.25 at the market’s close. The first-day gain was close to 110 percent.

As Eric Tilenius, the general manager of Zynga, wrote on Facebook: “A huge opening-day pop is not a sign of a successful I.P.O., but rather a massively mispriced one. Bankers are rewarding their friends and themselves instead of doing their fiduciary duty to their clients.”

http://www.businessinsider.com/linked-in-ipo-2011-5-b
linkedin  IPO  banking  banks  jpmorgan  merrylllynch  fiduciary  financialmarket  wallstreet 
may 2011 by asterisk2a
Barclays faces protests over role in global food crisis | Business | The Guardian
Along with Goldman Sachs and Morgan Stanley, BarCap has pioneered new kinds of financial products that have enabled pension funds and other investors traditionally barred from commodities exchanges to bet on food prices.
Deborah Doane, director of the World Development Movement (WDM), accused Barclays of making excessive profits at the expense of millions in poor countries. "First, it was sub-prime mortgages, now it's food commodities," she said. "The lack of transparency in these markets bears worrying resemblance to the behaviour that led to the 2008 financial crash. Like any irrational asset bubble, the investors pile their money in for short-term profits, in spite of the consequences."
commodities  barclays  goldmansachs  morganstanley  financialmarket  2011 
april 2011 by asterisk2a
Konsequenz aus der Griechenland-Krise: Schubles Verbot von Leerverkufen wirkt doch | FTD.de
Das Verbot ungedeckter Leerverkäufe bestimmter Wertpapiere in Deutschland wirkt sich an den Märkten laut Händlern positiv aus. Seit Inkrafttreten des Verbots Mitte Mai beobachten sie deutlich weniger Kurssprünge im kurzfristigen Handel am Aktien- und Rentenmarkt. "Der Druck auf einige Aktien ist in Phasen starker Abwärtsbewegungen zurückgegangen", sagte Matthias Jasper, Chefhändler der WGZ Bank. Auch Fidel Helmer, Leiter des Wertpapierhandels bei Hauck & Aufhäuser, bestätigt: "Die Umsätze sind geringer geworden."

Auswirkungen habe das neue Gesetz so vor allem auf Positionen, die am gleichen Tag eröffnet und wieder geschlossen werden - den Intradayhandel also.
Betroffen vom Verbot sind deshalb laut Händlern nun vor allem Hedge-Fonds und ausländische Investoren. "Vor allem sie haben in der Vergangenheit immer wieder die gleiche Klaviatur gespielt: erst kurzfristig draufhauen und dann später im Tagesverlauf wieder eindecken",
nakedshort  short-selling  trading  germany  2010  hedgefunds  financial  financialmarket 
august 2010 by asterisk2a
Paul Volcker Pushes for Reform, and Regrets His Past Silence - NYTimes.com
For all of what he describes as the overhaul’s strengths — particularly the limits placed on banks’ trading activities — he still feels that the legislation doesn’t go far enough in curbing potentially problematic bank activities like investing in hedge funds.

Like few other policy giants of his generation, Mr. Volcker has been a pivotal figure in the regulatory universe for decades, and as he looks back at his long, storied career he confesses to some regrets, in particular for failing to speak out more forcefully about the dangers of a seismic wave of financial deregulation that began in the 1970s and reached full force in the late 1990s.

Despite his recent efforts to ensure that the financial legislation might correct what he regards as some of the mistakes of the deregulatory years, he’s concerned that it still gives banks too much wiggle room to repeat the behavior that threw the nation into crisis in the first place.
paulvolcker  financial  regulation  deregulation  usa  financialmarket  2010  politics  history  economics 
july 2010 by asterisk2a
Correlation Soars on S&P 500 Shares - WSJ.com
The market's flock-like behavior is one more reflection of the growing influence of investors using broad-based strategies

it is bad.

Forex sort of is couples too.
trend  trends  stockmarket  herd  herding  dysfunctional  financial  financialmarket  market 
july 2010 by asterisk2a
IMF urges double tax hit on banks to refund taxpayers - Telegraph
In a report delivered to G20 nations on Tuesday, but yet to be published, the Fund has urged countries around the world to impose two new taxes on financial institutions: a "financial stability contribution" which levies a small charge on their balance sheets, and a "financial activities tax", which taxes excess profits, including bonuses.
IMF  banking  tobin-tax  taxation  financial  financialmarket  reform  regulation  2010  bonuses  risk  behaviour 
april 2010 by asterisk2a
FT Alphaville » The next leg of the great bear market has begun…
Balance sheet repair and prudence are the new drivers of the bus, in turn driven by The People (the private sector).
austerity  usa  policy  error  recovery  recession  greatrecession  outlook  comment  2010  2011  forecast  dollar  europe  china  markets  financialmarket  UK  debt  public  private  savings 
february 2010 by asterisk2a
Buttonwood: Not what they meant | The Economist
So what might be the unintended consequences of Mr Obama’s plan? The main impact will be on proprietary trading, the desks that attempt to profit from market movements with the bank’s own money. If more of these desks are shut down, the markets will become less liquid. That will mean wider spreads and higher dealing costs for other investors, though that may be a price worth paying for safer banks. It is more likely, however, that the prop traders will move to hedge funds. The big hedge funds will get bigger and will have more impact on the markets. The unregulated part of the finance sector will become more important systemically, something the authorities may regret when the next crisis comes along.
hedgefunds  shortselling  regulation  2010  short-selling  usa  reform  financial  financialmarket  history  politics  VolkerRule  barackobama  FinancialCrisisInquiryCommission 
february 2010 by asterisk2a
Bank Size and the Severity of Financial Shocks - CBS MoneyWatch.com
We cannot guarantee that regulation of the financial sector will prevent all shocks. Capping bank size can help to limit the extent to which a shock is magnified if one does occur, and thus limit its ability to do damage.
subprime  regulation  CFPA  reform  usa  VolckerRule  paulvolcker  paulkrugman  leverage  banking  financialmarket  FinancialCrisisInquiryCommission  toobigtofail  Canada  2010 
february 2010 by asterisk2a
Joseph Stiglitz Testimony: Banks Have Failed 'Their Basic Societal Mission'
Market economies work to produce growth and efficiency, but only when private rewards and social returns are aligned. Unfortunately, in the financial sector, both individual and institutional incentives were misaligned.
JosephStiglitz  banking  finance  2010  financialmarket  value  banks  bonuses  reform  regulation  FinancialCrisisInquiryCommission 
february 2010 by asterisk2a
Google's Eric Schmidt on why bankers deserve little sympathy and Obama does - Telegraph
"The number of people who were hurt by the activities of the financial industry is so large, it is very hard to have a lot of sympathy with that industry given the high-flying nature of its behaviour," he said.
banking  ericschmidt  recession  google  fanniemae  freddiemac  history  greenspan  monetary  policy  politics  economy  economics  moneysupply  financialmarket  causes  cause  creditcrunch  deficit  britian  uk  debt  dollar  pound  usa  inflation 
january 2010 by asterisk2a

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