I'm chairing a panel session on shadow banking at Copenhagen Business School this morning. In the circumstances the revelation of email from Goldman Sachs, Morgan Stanley and others in the US about their compliance with naked short selling regulations is telling. Perhaps the best quite on the issue is this, from Rolling Stone:
Now, through the magic of this unredacted document, the public will be able to see for itself what the banks' attitudes are not just toward the "mythical" practice of naked short selling (hint: they volubly confess to the activity, in writing), but toward regulations and laws in general.
"Fuck the compliance area — procedures, schmecedures," chirps Peter Melz, former president of Merrill Lynch Professional Clearing Corp. (a.k.a. Merrill Pro), when a subordinate worries about the company failing to comply with the rules governing short sales.
In other words, we'll do what we like, we don't care about the rules and we'll deny what we're doing, using the most expensiev lawyers money can hire if need be to do so .
I think that sums banking up.
It should be an interesting session, just as yesterday was on regulation, offshore and related issues.
Hat tip: Robert Palmer at Global Witness
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These shadow banks are rapidly becoming what 19th century Americans called ‘wildcat banks’, those that would set up in some forest somewhere, do some pyramid selling, and make it virtually impossible for anyone to find them when the deals obviously went bad. Oh, and CPI in the UK is down to 3.0% from 3.5% – Posen was obviously wrong and Weimar hyperinflation is just round the corner, as it is in Japan from 13 years ago!!
Richard, I am pleased to see that you have chosen to expose these ongoing insider trading activities here. Even though Max Keiser and Matt Taibbi have done their best to delve into these matters, the media in general either does not understand it or will not touch it.
Rather like protection racket gangsters, they think they are untouchable. This is where your courageous state principles need to be applied.
The deritvative markets are the one to watch and not the fake stock market as to whats going to happen . I think we need to bring back Glass- Steagall 1933 Act to keep an eye on these fraudseters they have gotten away with this for too long now .I think the Monopoly money has to be put back in its box lol. Sometimes these people and Government think the population I stupid we know whats going on, its just what can we do about it LEGALLY !!
” “F@ck the compliance area — procedures, schmecedures,” chirps Peter Melz, former president of Merrill Lynch Professional Clearing Corp. (a.k.a. Merrill Pro), when a subordinate worries about the company failing to comply with the rules governing short sales.”
Richard, I’m not a violent person by nature, nor a believer in capital punishment, but do you think there’s some argument for the ‘lynching’ of certain individuals in the financial world? 🙂
No
Jail them if they commt crimes
Bar them from the sector forever if they commit deliberate professional miscounduct