Tag: Banking

Germany seeks permission to drown

| January 23, 2012 | 0 Comments

By Aimanness Photography on Flickr

Germany reminds me of a goody two-shoes teenager who’s respectful, gets good grades and seems to be oh-so-responsible, but then goes out binge-drinking with the bad boys the minute the adults’ backs are turned. It happened with the Maastricht Treaty and now it looks to be happening again.

To be fair, I suppose I should add France to this allegation but, well — it’s France. For historical, cultural and political reasons Germany is the one that carries the burden of our high expectations of moral rectitude.

The Financial Times reports that Paris and Berlin would like to water down the new Basel III rules that are designed to ensure that banks have enough loss-absorbing capital to weather losses. Continue Reading

Trusted advice? Hardly.

| January 23, 2012 | 0 Comments

By alxndr on Flickr

Dale Westhoff is currently the Global Head of Structured Product Research at Credit Suisse. He has worked in finance for 22 years, but he started out in the world as an aerospace engineer. (Another scientific mind lost to the big money of big finance.)

Westhoff moved from JPMorgan to Credit Suisse about a year ago. As is the custom his new employer put out a press release when he joined, describing how wonderful he is and how the two would go on to slay dragons and warp space-time together. Westhoff was described as a “pioneer in the evolution and growth of the structured products business on Wall Street” who was “voted ‘First Team All-America’ by Institutional Investor Magazine in the Mortgage-Backed Prepayment/Strategy category for fifteen years in a row.” In his new role he would be responsible for the firm’s “highly innovative mortgage-backed security prepayment models”. Continue Reading

Weekend wrap-up: 1/16 to 1/20/12

| January 21, 2012 | 0 Comments

Here’s what you may have missed this past week on the Finance Addict. And, of course, the GIF of the Week after the jump. ‘Cause you deserve it.

  1. Have banks been robosigning credit cards, too? Robosigning has created a mortgage nightmare, are credit cards next?
  2. The ECB is very p.o.’d. The big news out of Europe recently was *not* S&P’s downgrade of 9 countries, including France, but rather something else.
  3. Will high oil prices bring the economy low again? It’s always the unintended consequences that get you in the end. Will this be true for global oil prices?
  4. Has banks’ bonus culture really changed? Short answer is, “No.”
  5. Models behaving badly. Why are the financial models that so many banks and investors depend on so open to manipulation? Continue Reading

Models behaving badly

| January 20, 2012 | 1 Comment

By Photo-Fenix on Flickr

So it’s not just American banks playing fast, loose and fraudulent with figures. There’s a new ProPublica article out that raises serious questions about Deutsche Bank, picking up on a theme that was first reported on by Zero Hedge and by Dealbook, (who dropped it like it was hot), back in 2009.

The article highlights a junior Deutsche Bank analyst who was allegedly told to change the numbers in the financial models used to estimate how much cash would be generated by the mortgage-backed bonds that DB packaging up as CDOs. Ajit Jain was supposedly asked by mid-level management to pretty up the figures so that rating agencies would assign the CDOs a coveted AAA rating, which would allow Deutsche to sell them to a much broader base of investors. Continue Reading

Has banks’ bonus culture really changed?

| January 19, 2012 | 0 Comments

Today’s the big day at Goldman Sachs. Employees of the so-called Vampire Squid will find out whether they’re getting a bonus for last year’s performance and, if so, how much. For what it’s worth I’ve heard rumors from the firm’s own employees that 40% of staff will not be getting bonuses this year.

Here’s how the compensation picture looks to be shaping up so far for the major Wall Street houses.

Continue Reading