is leveraging all of Canada's mining industry, lol!
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HOW YOU LIKE THE TASTE OF THAT SOUP ROSEN?!!
MUAHAHAHAHAHA!
HEY JONHNNNNNNNNNNY WINTER, WHERE YA AT BUDDY? YOU ARE MISSING THE GOOD STUFF SON!!
It's working Dan, thank you!
He was asking that it be denied as an entry to the docket, case, whatever. He's a piece of work.
http://twitter.com/Was_Mutual Check out the tweet Pham just posted, real class acts these guys from Weil.
Unfortunately, i'm forced to agree. Time for a new judge.
Boom, there's the test of resistance at 40.00, and a big predictable failure. Here comes the dump now.
I guess anything is possible...still, at this point, i've made soooo much money shorting this POS, that it doesn't matter, all my shares are free in the other stock. Speaking of shorting JPM, looks like it's time to do so again, see you at 35.00 next week!
Well of course they do, we've said that all along, it wasn't difficult lol, Bonderman would have had to file with both the court and the SEC if he were to sell. Bonderman is a billionaire, he didn't get to be one by panic selling. over 230 million in commons, he's gonna clean up on this deal!
Heck, who knows, he may have suspected all this from the very beginning, and may be using this to gain a controlling share of JPIG, and a seat on their board so he can push for them to FIRE the head douchebag thereof. HAH! How's that for wild speculation?!!
GOOOOO WAMUUUUU, TODAY IS GONNA BE A WILD ONE!!
GLTA!
That is an excellent question Jimmy, excellent, and one nobody seems to be asking.
I remember a friend asking me on the day it was announced there would be a "no-short" list, what it was about and what the effect would be. I told her it was either the most catastrophically stupid act in a series of them, or a plot to crash all the smaller banks so the larger ones could scoop them up cheap, as was done during the Great Depression after the crash in '29. I told her it would make the coming recession much worse, because regardless of anyone's personal dislikes of shorting, it's an important balance factor in the market, and actually provides important liquidity to a crashing stock, as the shorts cover at various levels, thus cushioning the impact.
Now, in retrospect, I was correct about the results, but it still leaves the questions, which scenario is correct? Was it stupidity, or larceny? And who benefitted...wait, that's not really in question now is it?
You and I know the MARTA claim is ridiculous, but i'm not in the least surprised by the tactic, last ditch ludicrous effort by various shysters and pettifoggers, it definitely shows IMO that the cat is out of the bag, and everybody wants a bite.
Viv explained it in great detail, and much more elegantly than I ever could, but here was my take on the basic aspects, read the filings thoroughly and you'll see:
"Correct me if i'm wrong, but since the original suit, alleged a violation of the securities act as the basis for the suit, and that matter has NOT been adjudicated, then filing a proof of claim form against the estate is ridiculous, as there is no legal evidence of such claim, it's still heresay until a judge presides over the original case and decides whether there were securities laws broken by Wamu and makes a ruling.
It would be different if it HAD been adjudicated, and the plaintiffs awarded damages prior to the bankruptcy, then they could submit a claim against the estate, although to me, that would still fall upon WMB/JPM/FDIC to be liable.
The Andrew Cuomo investigation they cite, was actually targeted at Fannie Mae and Freddie Mac more so than Wamu, and it was they that paid to settle, not Wamu.
Their claim presupposes Wamu being guilty, when in fact this has not been proved or adjudicated in a court of law, and therefore has no merit IMO."
There weren't any securities laws broken, Wamu didn't do anything anybody else didn't do, as pointed out, it's just bloodthirsty class-action lawyers trying to get paid off some portion of the claim, a "nuisance" settlement. But this thing never made it to court.
Basically it's like this: Party A buys a stock one day from party B, the stock goes down, party A gets PO'ed and doesn't want to take his medicine like the rest of us, so he files a lawsuit alleging party B broke the law somehow.
Before the case can ever be heard in court, party B dies. So party A steams a bit, then bold as brass, he marches down to the office of the executor of the estate after the inheritance has already been parceled out to Party A's lowlife thieving caretaker whom we'll call party JD, who got power of attorney and control of the estate with the aid of a crooked law enforcement official whom we'll call party SB.
So party A rolls into the executor's office, hands him a bill for 39 billion dollars, claims party B "owes" it to him, even though no court of law has, or ever will, award him anything. And even if it HAD, then since party JD is the "inheritor" (hijacker) of the estate, he would then be liable for any legitimate claims against the estate.
It's like placing a bet at the track, and then trying to sue the track if your horse loses, IMO it's really that simple.
Again, all this is JMHO. IANAL.
Yep, agreed. More than a little too, need volume to overcome it, a few million likely won't do it.
I thought I remember 26.00-34.00 dollars being her latest guesstimate.
Just some of the guilty, oops, I mean LARGER ones. The smaller financials in fact had a nice run last week, they pretty much re-traced, but several bounced again today. Some really nice trading ops.
Well said Brother. Seconding that. Emotions are running really high right now, let's not forget who the real enemies of us all are.
It's 1000% WRONG calls like that, that made you go broke, and turned you into a bitter old basher. And you wonder why people don't take advice from you.
It looks like to me, that SJ and the EC WILL be ruled on? The language in those matters does say "this matter is going forward", Ramirez, Mordicai, what do you think?
http://www.ghostofwamu.com/documents/08-12229/08-12229-2228.pdf
And if ever there was a year to do it, this is the one. Public sentiment is running hot against these sorts of things, the DOJ is up off it's butt and finally doing some investigating, as are many states attorney generals, it's going to be a huge hot-button issue here in a mid-term election year.
Wow, thanks Finy3, I knew I was leaving somebody out, lol, sorry Fish my brother, i'm still trying to get coffee (liquid personality, the morning version,lol) in me!
GOOD MORNING FISH!
Good Morning Wamu'ers! Looks like a good start to an auspicious week! Best of luck to all this week, and a special Good Morning to Uzual, Jestir, Chiron, Mordicai, WamuVoodoo, Ramirez and of course, the ever intrepid Diamond-Guru!
Let's rock and roll boys!
ooh, a whopping 2160.00 in damages, what does that translate to in "Egypian" dollars?
And if you're throwing out colorful monikers, wouldn't "gutless guido" be more appropriate given the locale and the nature of the nearby denizens thereof?
To you as well. Please keep an open mind, JPM and Goldman have presented an excellent opportunity to make money on the short-side, it's just business, and they would do it to you in a heartbeat.
GLTU
Will do, shouldn't be long now, 38.00's today, maybe 36.00's Monday.
Good to hear that JPM can write a check for 100 billion+, they'll be making quite a large one to me as i'm rolling profits steadily from my short positions here, into a stock that's about to give me stunning payday.
As predicted, 40.00 today, and just now breached. 39.00's up.
Chart says 31.00 is where we are headed, I might cover there. But if the new legislation is passed, and/or Glass-Steagall re-instated, then all bets are off, and 20.00's will arrive post-haste.
Okay, i'll take a shot, and note this is NOT a statement for or against either party.
The quick and dirty: Sheila Bair is a Republican. Most of the Senate, is not. It's a mid-term election year. I don't see lip-service in this, I see a witch-hunt. And I believe they found one. JMHO.
FDIC Chief Got Bank of America Loans While Working On Its Rescue
Agency Grants Sheila Bair Retroactive Ethics Waiver on Mortgages
http://huffpostfund.org/stories/2010/01/fdic-chief-got-bank-america-loans-while-working-its-rescue#ixzz0dJII7xmH
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By Keith Epstein and David Heath
Huffington Post Investigative Fund
10:14 am | 21 Jan 2010
Sheila Bair, one of the chief regulators overseeing Bank of America’s federal rescue, took out two mortgages worth more than $1 million from the banking giant last summer during ongoing negotiations about the bank’s bailout and its repayment.
In the weeks between the closings on her two mortgage loans, Bair met with Bank of America’s chief negotiator in the bailout talks.
To avoid conflicts of interest, the Federal Deposit Insurance Corp., which Bair heads, prohibits employees from participating in “any particular matter” involving a bank from which they are seeking a loan.
Bair did not seek or receive an exemption until last week, when her agency gave her a retroactive waiver from the rules after an inquiry by the Huffington Post Investigative Fund.
FDIC officials said there was no link between Bair’s duties and her mortgages. They also contend that even without the waiver Bair violated no ethics rules. Moreover, the FDIC said, Bair received no preferential treatment for either loan, paying interest rates at or above the national average.
However, the circumstances surrounding the mortgage on Bair’s house in Amherst, Mass., raise questions about whether she and her husband should have qualified for the terms they received.
Bair was teaching financial regulatory policy at the University of Massachusetts in Amherst when President Bush appointed her to head the FDIC in 2006. Her family rented a house in Washington until they borrowed $898,000 from Bank of America in July 2009 to buy a $1.1 million six-bedroom home in the Maryland suburbs. Seven weeks later, they borrowed $204,000 from Bank of America to refinance the Massachusetts house as a second home.
Mortgage documents for that 14-room home include a provision, known as a second-home rider, stating that Bair and her husband must keep the house for their “exclusive use and enjoyment” and may not use it as a rental or timeshare.
Yet the couple has been renting out part of the house since they left for Washington, with Bair listing income from the “rental property” in Amherst as between $15,000 and $50,000 a year on her most recent financial disclosure form as head of the FDIC.
Banks generally consider loans on rental properties to be riskier and charge more for them than for loans on second homes. For a $204,000 loan, according to Bank of America rate sheets examined by the Investigative Fund with the help of a mortgage broker, closing costs on a rental property could be $4,000 higher and the interest rate could rise by a half-point.
Bair declined a request for an interview. Asked about the second-home rider, Andrew Gray, Bair’s spokesman, said that the fact that Bair had renters at her Massachusetts home was “generally known” and that the couple had disclosed it to Bank of America. [Read FDIC statement].
Gray said that after reviewing the mortgage documents, “Our legal counsel does not believe it prohibits the rental arrangement in place and which was disclosed to Bank of America. Chairman Bair’s family have used retained space in the house repeatedly for family visits and vacations.”
DOCUMENT: Federal Ethics Rules »
To avoid conflicts of interest, FDIC employees cannot participate in "any particular matter" involving a bank from which they are seeking a loan (highlighting by Investigative Fund).
» READ: The FDIC Responds
FDIC Ethics Regulations
In its official guide for lenders, Fannie Mae, the government-owned corporation that buys mortgages and establishes underwriting standards, states that second-home mortgages must be restricted to “one-unit dwellings” and “must not be rental property.” Bair’s home is listed by the Amherst town assessor as a duplex and is zoned as a two-family unit.
“It should have been refinanced as an investment property, not as a second home, unless somebody really screwed up from an underwriter standpoint,” said Bonnie Hild, an underwriter who was given details of the loan. Hild trains other underwriters and is a member of the advisory board of the National Association of Mortgage Processors.
At the request of the Investigative Fund, a mortgage broker asked two loan officers working at Bank of America if a borrower could qualify for a second-home loan with a renter, using similar details as Bair’s loan involving a separate living quarters for the renters. Both bank representatives said no. The loan would have to be priced higher because it would be an investment property, they said.
Michael Bradfield, the FDIC's general counsel, said the discrepency was not Bair's fault. "It may be a simple mistake by a local representative of Bank of America," Bradfield said.
FDIC officials said Bair and her husband received a 30-year loan from Bank of America at 5.62 percent, compared with what they said was an average of 5.26 percent for all types of 30-year loans. They used the loan to pay off a 15-year mortgage at 5.75 percent from a small local institution, Florence Savings Bank.
The mortgage on the couple’s primary residence in Chevy Chase, Md., was a jumbo loan, meaning it exceeded the $729,750 limit on home loans that Freddie Mac and Fannie Mae will buy from lenders. The FDIC said the 30-year loan came with a fixed rate of 6 percent, compared with a national average at the time of 6.02 percent.
With tightened credit, there are few if any investors to buy jumbo loans from banks, so the institutions have to hold onto the mortgages themselves, tying up their cash. Several banking analysts said that last summer Bank of America was one of a small group of lenders making jumbo mortgages with only a 20 percent down payment.
Bank of America declined to discuss the second-home provision, the jumbo loan or any aspect of the mortgages. “We do not comment on anything involving individual customer information,” said Dan Frahm, a senior vice president at the bank's corporate headquarters.
A Role in the Bailout
A day after being contacted about the loans last week, Robert Fagan, the FDIC’s ethics officer, said he had done a review and – without Bair asking – granted her a waiver from the rules retroactive to March 1, 2009. He said he chose that date as his best estimate of the earliest point that Bair began seeking a loan. Her failure to request a waiver last year was “probably a harmless error,” Fagan said.
Fagan said that the waiver was likely unnecessary anyway, because he now has reviewed Bair’s record and determined that her activities relating to Bank of America did not conflict with the ethics rules.
The rules state that “No FDIC employee may participate in an examination, audit, visitation, review, or investigation, or any other particular matter involving an FDIC-insured institution, subsidiary or other person with whom the employee has an outstanding extension of credit.”
Fagan said he limited his review to “official action” taken by Bair as chair of the FDIC’s board. “We have discerned that she has not participated in a particular matter involving Bank of America at the time that she was negotiating a loan,” Fagan said.
However, a review of congressional testimony, documents and news accounts show that Bair and the FDIC played a significant ongoing role last year in discussions and decisions involving the bank’s financial health.
Bank of America, among the world’s largest financial institutions, received $45 billion in federal bailout money, the second-most among banks. Its primary federal regulator is the Office of the Comptroller of the Currency. The FDIC, which insures billions of dollars of its depositary accounts, is a backup regulator that maintains full-time examiners assigned to the bank.
Bair, a lawyer who formerly worked for the Treasury Department and lobbied for the New York Stock exchange, has been a prominent player among top officials dealing with the financial crisis. Last year she shared the John F. Kennedy Profile in Courage award for her “early warnings about the subprime lending crisis and for her dogged criticism of both Wall Street’s and the government’s management of the subsequent financial meltdown.” At congressional hearings last week, she blamed the Federal Reserve for failing to stop the predatory lending that inflated the housing bubble.
TIMELINE: Bair's Bank Dealings »
As chair of the Federal Deposit Insurance Corporation, Sheila Bair played a key role in last year's government bailout of Bank of America. At the same time, Bair obtained two loans from Bank of America. A closer look at her dealings with the bank.
Sheila Bair and Bank of America
In testimony to Congress last month, Bair recounted her role in supporting federal assistance to Bank of America beginning in late 2008.
Beside the $45 billion in aid from the Troubled Asset Relief Program, or TARP, the FDIC board voted in January 2009 to guarantee more than $100 billion in risky assets held by the bank, she said. In exchange the FDIC was to receive $1 billion in preferred stock.
In May, Bank of America asked to be released from the guarantee program. After months of negotiations, the FDIC consented to terminate its assistance in exchange for $92 million for the help it had already provided. Bair’s deputy signed the agreement on Sept. 21, 2009, records show.
Throughout much of last year the banking giant also was operating under a private memorandum of understanding with regulators because of concerns about the bank’s leadership and its ability to manage risk, according to a Wall Street Journal report. The arrangement began last May and the bank had to meet conditions set by regulators, with deadlines in July and August, the Journal reported. The FDIC would not comment on whether it had a role in that arrangement.
By the summer, Bank of America also began pushing for the right to pay back the TARP money and thus free itself from federal oversight of executive pay and other matters. At one point Bair opposed the payback because she said she didn’t think the bank was healthy enough, the New York Times reported. Other regulators disagreed, and the bank was allowed to repay the money in December.
A ‘Meet and Greet’
On Aug. 11, 2009, between the closings on her two loans, Bair met with Gregory Curl, then chief risk officer for Bank of America, the FDIC confirmed. Curl was the key bank official in talks with the government over the bailout and its repayment.
In response to a public records request, the FDIC redacted a reference to the meeting from Bair’s calendar, saying that matters involving examination, operating or condition reports on a bank are exempt by law from public disclosure. But Bair spokesman Gray said last week that the meeting was only an “informal meet and greet.”
Added Gray: “It is improper and wrong to suggest even the appearance that this had anything to do with Chairman Bair’s mortgages.”
Frahm, the Bank of America vice president, declined to answer questions about the meeting. “We do not comment publicly on our interactions with regulators,” he said.
FDIC ethics officer Fagan said he didn’t know about Bair’s meeting with Curl. He said informal meetings do not fall under the ethics law.
In his initial interview with the Investigative Fund, Fagan was asked in general about the agency’s ethics rules. He said that any members of the FDIC board -- including a chairman -- who applied for a mortgage loan from Bank of America would have to disqualify themselves from any particular matters involving that bank. Failure to do so could lead to disciplinary action, he said.
When later asked specifically about Bair’s loans, Fagan said she could be involved in a range of activities involving Bank of America without violating the rules.
For example, he said, Bair’s testimony before Congress about the FDIC’s role in Bank of America’s bailout does not qualify as a “particular matter” involving the bank, because Bair was compelled to testify.
In addition, he said, any advice or opinions she might have offered to President Obama, Treasury Secretary Timothy Geithner or Fed Chairman Ben Bernanke about issues affecting Bank of America would not violate the ethics rules. Nor, Fagan said, would talking to staff members about those issues or holding “meet and greets” with Bank of America executives.
"I was asked if I would -- had I known she was applying for a loan -- if I would have granted her a waiver in July. The answer was absolutely yes," Fagan said. He said the waiver will be good “for the remainder of her current career."
Exactly! And I must say, it's been good honest advice on trading this stock has it not? And thus far, VERY profitable!
I hate to burst YOUR bubble friend, but I can show you dozens of financials/banks that have made solid gains this week, I guess maybe you weren't watching close enough. And my commentary was absolutely correct, and 100% about JPM. So you deleted my post because I was right, again.
Don't kid yourself friend, take a look at the chart, JPM is in deep trouble, they will be broken up if and when Glass-Steagall is re-instated, they are being sued for billions, and have already admitted to bribery in the Alabama case, to the tune of 3/4 billion dollars, and that case is not done yet either.
IMO JPM will see 30.00's in the next few days, and the people who bought all those warrants from the Treasury, are holding expensive worthless paper, because JPM will NEVER see the 50.00's, which is what they would need just to break even.
I shorted them at 45.00, tell again how wrong I am.
Ahh, crashing faster than expected, 40.00's today, sub 40.00 tomorrow and the race will be on to 31.00!
Isn't it funny, how every time Snarke opens his mouth, a few hours later we get great news that makes him look like an idiot? LOL, beginning to like him for a "contrarian" indicator, almost as good as our resident basher!
"staggering amount of unliquidated damages"
"numerous subsidiaries to sell that have not been valued"
"if prosecuted sucessfully, the pending litigation will yield BILLIONS of dollars for WMI's equity holders"
"the equity committee was formed to adequately represent the rights of ALL holders of equity, both preferred and COMMON"
It's on like donkey kong now boys! Reading that document is like a breath of fresh air!
"staggering amount of unliquidated damages"
"numerous subsidiaries to sell that have not been valued"
"if prosecuted sucessfully, the pending litigation will yield BILLIONS of dollars for WMI's equity holders"
"the equity committee was formed to adequately represent the rights of ALL holders of equity, both preferred and COMMON"
GAME ON!
TICK-FRIGGING-TOCK BABY!!
Kevin Snarke, is living proof, that all the GOOD analysts, really do go to work for the A-list firms like those dirtbags at Goldman, I guess maybe you have to pay out all those bucks to get smart people.
A day late and a dollar short as usual..~yawn~. And Cramer was pumping about how the market was going to explode upward, lol, about 400 points and two days ago!
If they re-instate Glass-Steagall, that might be a good way for a Wamu settlement, JPM gets broken in half, and they have to give that half to Wamu, lol, Wamu would have more banks than they started with! Oh the delicious irony! This is going to make my year!
LMAO! This smart money, shorted them at 45.00, and will cover at 30.00. They dumped like 8 billion in market cap today alone. Yeah, thanks for the hot tip!
Obama proposes limits on financial institutions’ size and trading activities.
By Nicholas Johnston and Julianna Goldman
Jan. 21 (Bloomberg) -- President Barack Obama will offer proposals to limit financial institutions’ size and trading activities as a way to reduce risk-taking, an administration official said.
Obama will announce the rules today after meeting with former Federal Reserve Chairman Paul Volcker at the White House. The proposals will be part of an overhaul of regulations and will specifically address firms’ proprietary trading, the official said yesterday on the condition of anonymity.
Obama is renewing his focus on economic issues in an effort to tap into voter anger about the struggling economy, taxpayer bailouts and growing bank profits at a time of 10 percent unemployment and a federal deficit that rose to $1.4 trillion last year.
The proposals could affect trading at some of the nation’s largest banks, including New York-based Goldman Sachs Group Inc., Morgan Stanley and JPMorgan Chase & Co., said Frederic Dickson, chief market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon. Banks conduct proprietary trading for their own benefit, not for that of their clients.
“It is an obvious target,” Dickson said. “It has been a highly profitable business for those firms that have superior platforms. Whatever the details of the restrictions, it will draw Wall Street’s attention.”
Obama in June proposed an overhaul of U.S. financial regulations to fix lapses in oversight and excessive risk-taking that helped push the economy into a prolonged recession.
Fee on Financial Companies
Last week the president announced a plan to impose a fee on as many as 50 financial companies to recover losses from the federal government’s Troubled Asset Relief Program. It would be imposed starting June 30 on companies such as New York-based Citigroup Inc. and American International Group Inc. and Bank of America Corp. headquartered in Charlotte, North Carolina.
“We’ve got a financial regulatory system that is completely inadequate to control the excessive risks and irresponsible behavior of financial players all around the world,” Obama said in an interview with ABC News yesterday.
“People are angry and they’re frustrated,” Obama told ABC. “From their perspective, the only thing that happens is that we bail out the banks.”
Voter anger helped Republican Scott Brown win the late Edward Kennedy’s U.S. Senate seat in Massachusetts this week, giving Republicans the ability to block Obama’s top legislative priority, a health-care overhaul. The Massachusetts seat had been held by Democrats for more than 50 years.
U.K. Plans
Details on the proposed U.S. rules are to be spelled out later today. They could limit activities of banks such as Goldman, the most profitable investment bank in Wall Street history. Goldman reaped more than 90 percent of its pretax earnings last year from trading and so-called principal investments, which include market bets on securities and stakes in companies.
Goldman reports its quarterly earnings today. Morgan Stanley reported yesterday, and JPMorgan published its results last week.
In Britain, the Financial Services Authority last month published plans to make banks scale back proprietary trading, where a firm trades securities and other financial instruments with its own money rather than for customers. Under the rules, banks would have to put up as much as 29 billion pounds ($47 billion) of extra capital to cover potential trading losses.
‘Regulatory Arbitrage’
Bankers say additional regulation may threaten both their industry and a recovery in the economy. Marcus Agius, chairman of Barclays Plc, Britain’s second-biggest lender, said today he’s concerned that regulation imposed by national governments may jeopardize competition among lenders.
“In all of this, there’s the whole question of an international level playing field,” he told a London conference. “It’s something people say they believe in, but we’re seeing elements of regulatory arbitrage. We’re in the early and fragile stages of an economic recovery, and what we don’t want is to kill that with an excess of regulation.”
Volcker, chairman of the President’s Economic Recovery Board, has criticized as “reform light” the financial industry’s efforts to weaken financial regulation proposals in Congress.
A year ago, Volcker issued a report from the Group of Thirty, a panel of former central bankers, finance ministers and academics, calling for separation between commercial banks and businesses that engage in speculative risk-taking such as hedge funds and proprietary trading.
‘A Bad Dream’
“Some market participants, possibly some in this room, seem to be suggesting that the events of the past couple of years were like a bad dream - a truly unsettling bad dream, but nonetheless something that in the cold light of day need not require a really substantive change in the structure of markets or corporate lifestyle,” Volcker told an audience that included bankers Jan. 14.
Four U.S. institutions - Bank of America, San Francisco- based Wells Fargo & Co., JPMorgan and Citigroup - held 35 percent of the country’s deposits on June 30, compared with 28 percent by the four biggest two years before, according to the Federal Deposit Insurance Corp. and the Federal Reserve.
John S. Reed, the former co-chief executive officer of Citigroup, said he regrets helping engineer the merger that created the bank.
“I’m sorry,” Reed said in an interview last year. U.S. lawmakers were wrong in 1999 to repeal the Depression-era Glass- Steagall Act, he said. The act required the separation of institutions involved in capital markets from those engaged primarily in traditional customer services, such as taking deposits and making loans.
Reinstating Glass-Steagall
Republican Senator John McCain of Arizona and Democrat Maria Cantwell have proposed legislation to reinstate the Glass- Steagall law as a way to stem the rise of banking conglomerates such as Citigroup, JPMorgan and Bank of America that are active in retail banking, insurance and proprietary trading.
The Securities and Exchange Commission under Chairman Mary Schapiro is beginning its own review of financial markets, including an examination of so-called high frequency trading, in which professional investors execute orders in milliseconds to capture tiny price discrepancies. The strategies make up more than 60 percent of all U.S. stock transactions, according to New York-based research firm Tabb Group.
The House of Representatives passed a package of new financial rules in December while the Senate continues to work on legislation that has the support of Republicans and Democrats.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aE_FU.hDsiao&pos=1
Obama proposes limits on financial institutions’ size and trading activities.
By Nicholas Johnston and Julianna Goldman
Jan. 21 (Bloomberg) -- President Barack Obama will offer proposals to limit financial institutions’ size and trading activities as a way to reduce risk-taking, an administration official said.
Obama will announce the rules today after meeting with former Federal Reserve Chairman Paul Volcker at the White House. The proposals will be part of an overhaul of regulations and will specifically address firms’ proprietary trading, the official said yesterday on the condition of anonymity.
Obama is renewing his focus on economic issues in an effort to tap into voter anger about the struggling economy, taxpayer bailouts and growing bank profits at a time of 10 percent unemployment and a federal deficit that rose to $1.4 trillion last year.
The proposals could affect trading at some of the nation’s largest banks, including New York-based Goldman Sachs Group Inc., Morgan Stanley and JPMorgan Chase & Co., said Frederic Dickson, chief market strategist at D.A. Davidson & Co. in Lake Oswego, Oregon. Banks conduct proprietary trading for their own benefit, not for that of their clients.
“It is an obvious target,” Dickson said. “It has been a highly profitable business for those firms that have superior platforms. Whatever the details of the restrictions, it will draw Wall Street’s attention.”
Obama in June proposed an overhaul of U.S. financial regulations to fix lapses in oversight and excessive risk-taking that helped push the economy into a prolonged recession.
Fee on Financial Companies
Last week the president announced a plan to impose a fee on as many as 50 financial companies to recover losses from the federal government’s Troubled Asset Relief Program. It would be imposed starting June 30 on companies such as New York-based Citigroup Inc. and American International Group Inc. and Bank of America Corp. headquartered in Charlotte, North Carolina.
“We’ve got a financial regulatory system that is completely inadequate to control the excessive risks and irresponsible behavior of financial players all around the world,” Obama said in an interview with ABC News yesterday.
“People are angry and they’re frustrated,” Obama told ABC. “From their perspective, the only thing that happens is that we bail out the banks.”
Voter anger helped Republican Scott Brown win the late Edward Kennedy’s U.S. Senate seat in Massachusetts this week, giving Republicans the ability to block Obama’s top legislative priority, a health-care overhaul. The Massachusetts seat had been held by Democrats for more than 50 years.
U.K. Plans
Details on the proposed U.S. rules are to be spelled out later today. They could limit activities of banks such as Goldman, the most profitable investment bank in Wall Street history. Goldman reaped more than 90 percent of its pretax earnings last year from trading and so-called principal investments, which include market bets on securities and stakes in companies.
Goldman reports its quarterly earnings today. Morgan Stanley reported yesterday, and JPMorgan published its results last week.
In Britain, the Financial Services Authority last month published plans to make banks scale back proprietary trading, where a firm trades securities and other financial instruments with its own money rather than for customers. Under the rules, banks would have to put up as much as 29 billion pounds ($47 billion) of extra capital to cover potential trading losses.
‘Regulatory Arbitrage’
Bankers say additional regulation may threaten both their industry and a recovery in the economy. Marcus Agius, chairman of Barclays Plc, Britain’s second-biggest lender, said today he’s concerned that regulation imposed by national governments may jeopardize competition among lenders.
“In all of this, there’s the whole question of an international level playing field,” he told a London conference. “It’s something people say they believe in, but we’re seeing elements of regulatory arbitrage. We’re in the early and fragile stages of an economic recovery, and what we don’t want is to kill that with an excess of regulation.”
Volcker, chairman of the President’s Economic Recovery Board, has criticized as “reform light” the financial industry’s efforts to weaken financial regulation proposals in Congress.
A year ago, Volcker issued a report from the Group of Thirty, a panel of former central bankers, finance ministers and academics, calling for separation between commercial banks and businesses that engage in speculative risk-taking such as hedge funds and proprietary trading.
‘A Bad Dream’
“Some market participants, possibly some in this room, seem to be suggesting that the events of the past couple of years were like a bad dream - a truly unsettling bad dream, but nonetheless something that in the cold light of day need not require a really substantive change in the structure of markets or corporate lifestyle,” Volcker told an audience that included bankers Jan. 14.
Four U.S. institutions - Bank of America, San Francisco- based Wells Fargo & Co., JPMorgan and Citigroup - held 35 percent of the country’s deposits on June 30, compared with 28 percent by the four biggest two years before, according to the Federal Deposit Insurance Corp. and the Federal Reserve.
John S. Reed, the former co-chief executive officer of Citigroup, said he regrets helping engineer the merger that created the bank.
“I’m sorry,” Reed said in an interview last year. U.S. lawmakers were wrong in 1999 to repeal the Depression-era Glass- Steagall Act, he said. The act required the separation of institutions involved in capital markets from those engaged primarily in traditional customer services, such as taking deposits and making loans.
Reinstating Glass-Steagall
Republican Senator John McCain of Arizona and Democrat Maria Cantwell have proposed legislation to reinstate the Glass- Steagall law as a way to stem the rise of banking conglomerates such as Citigroup, JPMorgan and Bank of America that are active in retail banking, insurance and proprietary trading.
The Securities and Exchange Commission under Chairman Mary Schapiro is beginning its own review of financial markets, including an examination of so-called high frequency trading, in which professional investors execute orders in milliseconds to capture tiny price discrepancies. The strategies make up more than 60 percent of all U.S. stock transactions, according to New York-based research firm Tabb Group.
The House of Representatives passed a package of new financial rules in December while the Senate continues to work on legislation that has the support of Republicans and Democrats.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aE_FU.hDsiao&pos=1
Shoot, never catch me owning JPIG, i'm shorting 'em and rolling profits into Wamu bit by bit.
You know it Realtime! I smell a bear raid coming. They fail at 40.00, and they head to the 30.00 area.
Now 42.00! Might test 40.00 by tomorrow, when it fails there, it's free-fall time to the 31.00 area.
tick-tock.
That has got to have been one of those moments Voodoo...
Ticket to delaware= 300.00
Night in motel= 100.00
Car rental= 75.00
Telling off a shyster lawyer to his face in front of court-go'ers and reporters=
PRICELESS!!
You da MAN WamuVoodoo!
A hearty happy seconding of that sentiment Chiron! This is some of the best news in days! Rosen can go slink back under his rock, or chase ambulances, whatever his ilk do.
The power of the EC is already being felt, I can't wait to see what's in store next!
GLTA!
Part of the strategy. They gave it away when theY mentioned the share price as part of the rationale for objecting to the EC. So now we can assume it's been going on for some time. And mentioning it in the objection, was like a big screaming blinking sign to the NSS forces out there: "HEY, COME AND GET US, WE WON'T DO ANYTHING ABOUT IT, IN FACT WE WELCOME YOU AT THE MOMENT".
Puts Rosen's comments at the hearing in perspective don't it?
Don't kid yourselves, Weil and WMI are NOT our friends, IMO they were about to screw us until the EC came along.