Safe for the 1 percent: FDIC often insures much more than $250,000

July 24, 2012

That the U.S. Federal Deposit Insurance Corporation (FDIC) insures deposits in people’s bank accounts up to $250,000 is fairly common knowledge. What is less known is that this $250,000 cap is, in many cases, a fiction, because companies and savvy, wealthy depositors can circumvent it, or avoid it altogether.

Spanish yield curve flattens, along with Europe’s fortunes

July 20, 2012

Ten-year Spanish government bond yields hit their highest levels since the euro was created – above 7 percent – on growing doubts that the euro zone’s fourth largest economy will be able to avoid a full-blown sovereign bailout.

‘Our financial oligarchy’: Louis Brandeis slams too big to fail – in 1913

July 17, 2012

Chris Reese contributed to this post

In an article entitled “Our financial oligarchy,” published in Harper’s magazine in December 1913, Louis Brandeis, who three years later would be appointed to the Supreme Court, delivered a scathing critique of the banking sector that bears an uncanny resemblance to the charges against Wall Street today.

Repo market big, but maybe not *that* big

June 25, 2012

Maybe the massive U.S. repo market isn’t as massive as we thought. That’s the conclusion of a study by researchers at the Federal Reserve Bank of New York that suggests transactions in the repurchase agreement (repo) market total about $5.48 trillion. The figure, though impressive, is a far cry from a previous and oft-cited $10 trillion estimate made in 2010 by two Yale professors, Gary Gorton and Andrew Metrick. The Fed researchers, acknowledging the “spotty data” that complicates such tasks, argue the previous $10-trillion estimate is based on repo activity in 2008 when the market was far larger, and is inflated by double-counting.

MIT’s Johnson takes anti-Dimon fight to Fed’s doorstep

June 25, 2012

Simon Johnson is on a mission. The MIT professor and former IMF economist is trying to push JP Morgan CEO Jamie Dimon to resign his seat on the board of the New York Fed, which regulates his bank. Alternatively, he would like to shame the Federal Reserve into rewriting its code of conduct so that CEOs of banks seen as too big to fail can no longer serve.

JP Morgan Houston janitor wants Jamie Dimon to walk in her shoes

June 20, 2012

Just as the proverbial shoemaker’s children can go without shoes so, apparently, can a cleaner of corporate office bathrooms not have time for a bathroom break. And with the lack of time to use one of the 24 bathrooms Adriana Vasquez must clean in a five-hour shift at the JP Morgan Chase Tower in Houston, Texas – 22 of them with multiple stalls – comes the absence of a living wage.

Fine print: hidden risks in your checking account

June 19, 2012

What’s the safest place for your money other than the mattress? A checking account backed by the U.S. government’s Federal Deposit Insurance Corporation comes pretty close. Right? A report from Pew Charitable Trusts highlights hidden fees and costs that chip away at accounts that consumers think of as a safe-haven for their cash.

Spanish bailout blues

June 10, 2012

100 billion used to be a big number. These days, it barely buys you a little time.

As financial conditions tighten, Fed may have to run to stay in place

June 8, 2012

Seemingly lost in the talk about whether or not the Federal Reserve should ease again is the idea that financial conditions have tightened and the U.S. central bank may have to offer additional stimulus if only to offset that tightening. Writes Goldman Sachs economist Jan Hatzius:

Channels of contagion: How the European crisis is hurting Latin America

June 8, 2012

If anything positive can be said to have come out of the global financial crisis of 2008-2009, it may be that the theory arguing major economies could “decouple” from one another in times of stress was roundly disproved. Now that Europe is the world’s troublesome epicenter, economists are already on the lookout for how ructions there will reverberate elsewhere.