Financial Consultant

Wag the Reg: SEC Timed its Suit Against Goldman Sachs to Hide Stanford Screwup

Here are two interrelated questions about the SEC: Why is the agency so crappy, and why is it getting stronger? And here are the answers: It’s complicated, and anyone got a better idea?

The latest example of said crappiness surfaced yesterday when SEC Inspector General David Kotz all but admitted that the agency announced its April lawsuit against Goldman Sachs (GS) to divert attention from his office’s report — issued the same day — blasting the securities watchdog for repeatedly failing to nab alleged fraudster R. Allen Stanford. Asked about the timing of the action against Goldman, Kotz said:

It would strain credulity to think it was coincidental. I can’t

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Tags: Sec, Sec Timed

Friday, September 24th, 2010 Financial Consultant No Comments

Money Isn’t The Problem. Our Interaction With It Is.

I live and work in a metropolitan area, which means I spend a lot of time on buses and trains with my nose in a book attempting to avoid my fellow riders in the friendliest way possible.

One of my co-workers suggested I add The Soul of Money to my Express Bus Reading List – he said it was just the sort of thing that would be right up my alley. Wow, was he right.

There’s a lot in this book that made me stop and think, which probably isn’t a surprise with a title like The Soul of Money, but there was one quote in particular that stood out to me as a statement around which my personal and professional lives revolve:

Money itself isn’t the problem. Money itself isn’t bad or good. Money itself doesn’t have power or not have power. It is our i

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Friday, September 24th, 2010 Financial Consultant No Comments

Why the Duel Between Obama and Wall Street Over Elizabeth Warren Isn’t Only About Her

The brawl over whether President Obama should name Elizabeth Warren to head the Consumer Financial Protection Bureau isn’t over a person — it’s over who controls the terms of financial reform.

Here’s the latest. News surfaced this week that the White House may appoint Warren, the flinty Harvard prof who conceived the new agency, while Congress is out on recess or give her the job on an interim basis. Those maneuvers would avoid a messy confirmation fight in the Senate, where Democrats look to be short of the 60 votes they would need to overcome concerted Republican opposition to Warren. A handful of Dems are also signaling their discomfort with her. These include outgoing Connecticut Sen.

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Tags: Elizabeth Warren, Warren

Tuesday, September 14th, 2010 Financial Consultant No Comments

Basel III Won’t Save Banks, Taxpayers, From Basel IV

The most salient aspect of the Basel III accord announced this weekend is the “III.” Since 1988, global financial regulators have moved twice before to fortify banks against unforeseen losses. That we’re onto the third round, this time after hundreds of banks around the world keeled over after being caught short of capital, tells you something about whether the latest effort will prevent future collapses.

As independent banking consultant and economist Ken Thomas told me, “Take three Basels and call me in the morning of the next crisis!”

The main problem with Basel III is that it focuses on supporting banks’ profit margins rather than girding them against disaster. That emphasis is reflected in the agreement’s modest scope. It phases in

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Tags: Basel, Basel Iii

Sunday, September 12th, 2010 Financial Consultant No Comments

Sure Bet: How Wall Street is Dodging the Volcker Rule

Is Wall Street really scrambling to comply with the Dodd-Frank financial reform law? Dream on. Despite a number of recent leaks masquerading as news stories about big banks fleeing proprietary trading, as required by the measure, this NYT story suggests the firms are using a clever bit of legerdemain to continue gambling for their own accounts:

When Congress passed a new financial regulation bill last month, it sought to prevent federally insured banks from making speculative bets using their own money. But that will not stop banks from making bets that some critics deem risky, even as the rules go into effect over the next few years.

That is because many such bets — on the direction of the stock market or the price of coal, for example — are done on behalf of clients. So,

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Tags: Street, Wall Street

Tuesday, September 7th, 2010 Financial Consultant No Comments