The Derivative Project

OTC Derivatives Misuse

AIG Suit:  Role of Commercial Banks, Trust and Capital Markets

AIG Suit: Role of Commercial Banks, Trust and Capital Markets

AIG shareholders and Hank Greenberg have their day in court tomorrow.  Gretchen Morgenson of The New York Times writes a summary here: “Court Casts a New Light On a Bailout.”  Ms. Morgenson writes: “In spite of this punishment, A.I.G. repaid the loan in January 2011. I am not arguing that…

Why Didn’t the SEC and Congress Investigate the Goldman/Libya Trades?

Why Didn’t the SEC and Congress Investigate the Goldman/Libya Trades?

  Reuters reported today “Libya Sues Goldman Over Losing Trades“.   No surprises here, just regrets the SEC and Congress did not do more sooner.  A billion dollar investment, that loses almost 100%, and generates more income to the “investment advisor”, than the client, is worth investigating as a fundamental…

Why the DOJ Must Counter Sue AIG Now

Reuters reported this week that AIG’s suit against the Federal government will receive class action status. Department of Justice, you now have no choice but to protect the U.S. taxpayer.  AIG’s credit default swaps were entered into fraudulently, since they knowingly entered into them without the financial capacity to make…

The Department of Justice and The U.S. Taxpayer v AIG

U.S. taxpayers had forgotten about, or never really understood, (due to the misrepresentative reporting on the fraud perpetuated by AIG) how they were duped. Taxpayers, here is another opportunity to see justice served for all the economic hardships following the 2008 financial crisis.  It is not to “get even” it…

U.S. Taxpayers Need the Untold Story: Deutsche Bank, Mr. Buffett, and Mr. Khuzami

Former FDIC Chair, Sheila Bair, stated in her most recent book, Bull by the Horns, “If Main Street voters are confused or don’t feel they understand the problems, they are unlikely to exert political influence to correct those problems.” Main Street voters need to understand why President Obama appointed Wall…

Candidate Romney is Not Criticizing President Obama’s SEC and CFTC’s Failure to Regulate Post Madoff: Is He Also Too Cozy with the Regulators?

The Obama Administration has had months to effect the necessary changes in our securities industry’s self-regulation following the Madoff and Stanford Ponzi schemes.  The Peregrine fraud reveals the failure of our regulatory systems. Candidate Romney is quick to chastise President Obama for things outside his control, while ignoring issues the…

Material Conflicts, Lack of Training, Lack of Transparency Are at Heart of Financial Crisis

Floyd Norris of the New York Times has a piece today on the Barclay’s “Libor scandal”, Banks Ability to Rig Libor Shows a Change is Needed.  The premise of the piece is excellent, however, Mr. Norris and The New York Times, continue to rely on a circle of sources for…

The Libor Scandal, Duck Tape and Today’s Global Financial Markets

The Libor Scandal, Barclays and the Bank of England Congress, we have an undeniable pattern here.  Unregulated markets are prone to manipulation to benefit individual traders or individual banks or brokerages. Self-regualtion is a sham. Regulators can only do so much. Greed must be controlled by public shame, criminal action,…

Congress, Here is Memorial Day Required Reading and a Heads Up on Your Role in the Next Block Buster CDS Trade

A week ago, House Leader Boehner begin his positioning for a renewed fight over deficits pushing the U.S. into a technical default on its debt, a scenario that the International Swaps Dealer Association (ISDA) has said it would pay out on credit default swaps if the U.S. is in technical…

VaR and the Stupidity Defense: Here is Obama’s “Duh” List for Immediate Job Creation

Reuter’s columnist, Felix Salmon, alluded to the genius behind J.P. Morgan’s $2 billion trading loss in credit default swaps, “VaR”, that darn mathematical model that just seemed to fail the sophisticated risk managers again, as it did in the 2008 financial crisis.  Once again, Wall Street has an out all…