Rolfe Winkler
Option ARMageddon
Afternoon Links 5-11
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Senate backs one time audit of Fed’s bailout role (Herszenhorn, NYT) Good piece. Describes the differences between the tougher Paul/Grayson Audit-The-Fed proposal that passed the House and the measure that just passed the Senate. A shame there can’t be an audit of all actions the Fed takes under emergency powers granted in Section 13(3) of the Federal Reserve Act.
U.S. exposure to euro bailout $54 billion (Cox, CNBC) Back of the envelope calculations on what U.S. taxpayers could fork over, via the IMF, if the fund’s entire €250 billion commitment is drawn down. This doesn’t include swap lines.
Gold surges to $1220, approaches new record (Bernard, AP) Gold is “really being looked at as an alternative currency right now,” said Nicholas Brooks, head of research and investment strategy at ETF Securities.
The Greek riot-dog is on Facebook (Facebook) ht Rick Lawhorn
NY AG sues Bank of New York on Madoff (Stempel, Reuters) The suit alleges that the bank’s unit Ivy Asset Mgmt — which did biz with Madoff — learned he was not investing as he claimed but did not inform clients.
Did the Black Swan cause a black swan? (Patterson/Lauricella, WSJ) Felix says balderdash.
Euro bailout package doesn’t unclog interbank markets (Jenkins, Bloomberg) LIBOR is staying stubbornly high, though still well below levels reached at the height of the financial crisis.
A mighty trading quarter for Goldman, JP Morgan (Dealbook) Meanwhile Goldman COO Gary Cohn was arguing at a financial conference today that it’s not true their revenues get a big boost from proprietary trading. Sure Gary.
Inflation in China surges (Bloomberg) Chinese monetary authorities must put the brakes on their economy soon. That will hurt the world economy short-run, but if the Chinese don’t act to stop their emerging property bubble, it could bust violently, and with far worse consequences…
FDIC floats rules for bank “living wills,” and securitizations (Wutkowski, Reuters) Boring but important.
So that’s how they work… (imgur)
Great slide dive (imgur) He totally sticks the landing…
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For once, I think Gary Cohn may not be entirely lying. Goldman and JPM gets their money by borrowing at nil from the Fed and then lending back to the Treasury for fun and profit. Do some of this every day and every day is a good day. Throw in some AAA corporates for good measure and the weather is always beautiful.
This is actually worse than prop trading!