Tag: Deutsche Bank

Banking regulators fail us again

| March 26, 2012 | 1 Comment

Capital is a fancy term for the shock absorber that protects a bank from unexpected losses. It’s money or money-like; the more of it that a bank has, the better the chance that it can survive tough times without the help of taxpayers. But because capital is difficult and costly for a bank to raise, it never, ever wants to be told that it must raise more of it.

Only a fool or someone who has been asleep for the past few years would expect a bank to voluntarily to do the things that it ought to. This would be like expecting an 11-year old to start saving his pocket money for retirement. Nice idea, very sensible…not bloody likely. Continue Reading

Weekend wrap-up: 1/16 to 1/20/12

| January 21, 2012 | 0 Comments

Here’s what you may have missed this past week on the Finance Addict. And, of course, the GIF of the Week after the jump. ‘Cause you deserve it.

  1. Have banks been robosigning credit cards, too? Robosigning has created a mortgage nightmare, are credit cards next?
  2. The ECB is very p.o.’d. The big news out of Europe recently was *not* S&P’s downgrade of 9 countries, including France, but rather something else.
  3. Will high oil prices bring the economy low again? It’s always the unintended consequences that get you in the end. Will this be true for global oil prices?
  4. Has banks’ bonus culture really changed? Short answer is, “No.”
  5. Models behaving badly. Why are the financial models that so many banks and investors depend on so open to manipulation? Continue Reading

Models behaving badly

| January 20, 2012 | 1 Comment

By Photo-Fenix on Flickr

So it’s not just American banks playing fast, loose and fraudulent with figures. There’s a new ProPublica article out that raises serious questions about Deutsche Bank, picking up on a theme that was first reported on by Zero Hedge and by Dealbook, (who dropped it like it was hot), back in 2009.

The article highlights a junior Deutsche Bank analyst who was allegedly told to change the numbers in the financial models used to estimate how much cash would be generated by the mortgage-backed bonds that DB packaging up as CDOs. Ajit Jain was supposedly asked by mid-level management to pretty up the figures so that rating agencies would assign the CDOs a coveted AAA rating, which would allow Deutsche to sell them to a much broader base of investors. Continue Reading

Weekend wrap-up: 1/2 to 1/6/12

| January 7, 2012 | 0 Comments

Here were the most popular stories on Finance Addict during this first week of 2012. Plus, our GIF of the Week after the jump!

  1. How to make money in finance. Find someone on the other side of the trade who’s corrupt as you are.
  2. The Fed’s definition of “clarity” is not like yours or mine. The most recent measure by the Federal Reserve to “enhance clarity” is just plain bananas.
  3. A real mission impossible. Can the hivemind help to track the “tectonic force” of money sloshing through our global economy?
  4. Another one bites the dust. The head of the Swiss central bank, Philipp Hildebrand, is in big trouble. And he blames it all on his wife.
  5. Lessons from Lagarde in 2012. We should take advantage of Christine Lagarde’s tendency to voice the uncomfortable truth about inequality. Continue Reading

A real mission impossible

| January 4, 2012 | 1 Comment

By kohane on Flickr

When I worked in banking not so long ago, it was actually cool to be “old school”. It was just another way of saying that one would try to balance the bank’s interests with that of the corporate client’s. To make neither too little money off of them, nor too much. And to never, ever, ever give them the impression that the high fees they were paying would be used to pay for something like your next Ferrari. Continue Reading