financial reform

It's looking like the SEC/Goldman Sachs lawsuit could open up a whole new can of worms, one that Tim Geithner and some bank executives aren't likely to be very happy about. The story's about AIG and I used to work there so, as much as I like to stay out of the story, a little personal background is in order. We'll do the story first and then get to the personal stuff. more »

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I generally find Andy Kroll to be both a rigorous and persuasive journalist. more »

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The next few weeks will be crucial for the effort to rein in the Wall Street casino and hold the bailout barons accountable. Here's a list of major Wall Street reform rallies taking place around the country in the coming weeks. With the Wall Street bill going to the Senate floor, make sure your voice is heard! more »

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JPMorgan Chase CEO Jamie Dimon knew what he was talking about when he said that ""large corporate America is in very, very, very, very good shape." It's a crude and insensitive remark, but an accurate one.

Unfortunately, the rest of us are still paying for the party. We bailed out the big bankers once, and if Dimon has his way we'll probably be forced to do it again. Despite his company's record first quarter, he's complaining. He thinks that asking banks to cover the cost of their own potential failure is "punitive." Dimon, once known as the "Democrats' banker," is throwing more cash to the GOP these days, and in return his wishes are being slavishly carried out by the likes of Mitch McConnell.

How dangerous are Dimon and his colleagues? Using data from Robert Litan's valuable study of derivatives, as well as source data from the Comptroller of the Currency (plus some handy tips from Mike Konczal), I put together some pie charts.<!--break-->

1. "Too Big to Fail" is Worse Than You Think

The misuse of derivatives nearly brought down the economy, and the concentration of these instruments in a few hands forced the government to bail out their holders. Are we any safer today? Here's the market share held by the top five banks trading in derivatives:

No, your eyes aren't deceiving you. The top five banks hold nearly 96% of the entire derivatives market.

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The political battle over Wall Street reform is finally being engaged in earnest. Senate Minority Leader Mitch McConnell (R-KY) has formally thrown in his party's lot with the nation's largest banks, and to their credit, Democrats appear to be pushing back, both on politics and policy. more »

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When it comes to the economy, the color of wisdom is orange. Some students at Syracuse University are protesting the selection of JPMorgan Chase CEO Jamie Dimon as their commencement speaker. They're absolutely right: Dimon's a poor role model. more »

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Were the big banks all knowingly running Ponzi schemes? The stunning hearings held this week by the Senate Permanent Committee on Investigations on the collapse of Washington Mutual, the largest thrift failure in the U.S., suggest that while Ponzi schemer Bernie Madoff may have been the extreme, he wasn't the exception. For WaMu, mortgage fraud wasn't a problem; it was the business plan.

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There are two types of financial outrages: acts that are outrageously illegal, and acts that are, outrageously, legal. Yesterday's Senate hearing on the rise and fall of Washington Mutual was a rare examination of the former outrage, documenting the pervasive practice of fraud at every level of the now-defunct bank's business. more »

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The Financial Crisis Inquiry Commission examine the actions of Fannie Mae and Freddie Mac, the two semiprivate institutions that together are the backbone of mortgage financing. The two agencies are favorite targets of the right, but will there be an equally tough progressive critique of the actions of the actions of the highly paid executives who run these companies? Taxpayers are going to lose a ton of money on Fannie and Freddie, as a result of decisions made during and after the financial crisis, but what other options have policymakers really had?

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