Max and Stacy discuss the latest of Goldman Sachs serial scandals. Goldman will pay $22m to the SEC to settle "allegations" that they engaged in weekly huddles where analysts would pass on information to traders and certain clients. Goldman had paid a penalty in 2003 for the same violation. Max and Stacy discuss what happens when huddles turn into cuddles and the SEC's tendency to treat crimes as "technical violations".
Max and Stacy also address the tripling of risk taken on by JP Morgan's chief investment office over the past 5 years: "They get too big to unwind on purpose so they don't have to unwind. This is a scheme to extract rent." One JP Morgan trader, Bruno Iksil, is now referred to by some in the industry as "Voldemort"owing to his enormous positions in market-derivatives.
In the second half the show, Max interviews Matt Taibbi, who likens reporting on Wall Street activity to covering organized crime.
Taibbi touches on his recent article, Bank of America: Too Crooked to Fail: BoA got very big because of acquiring Countrywide and Merril Lynch. Those terrible acquisitions should have resulted in BoA going out of business. But those acquisitions made BoA so big, that we cannot allow that to happen. Now we slap them on the wrist every time they violate the law - and they do that often - and hope they get better. Some of BoA's recent violations: municipal bond manipulation, rigging LIBOR, the mortgage backed securities rip-offs, ripping off the HAMP program, ripping off people who have prepaid BoA cards for Unemployment Insurance...
No comments:
Post a Comment