- Greenspan Concedes That the Fed Failed to Gauge the Bubble
- Rival warned regulators over Lehman
- JPMorgan also used accounting gimmick
- SEC welcomes Lehman report as ‘helpful’
- Lehman estate fight with Barclays escalates
- Speculators seen increasing Greek borrowing costs
- CFTC Gensler: Determined To Reform OTC Market
- Trichet backs tougher CDS regulation
- Palm Narrows Loss, but Phone Sales Drop
Greenspan Concedes That the Fed Failed to Gauge the Bubble – NY Times
….After more than six decades as a skeptic of big government, the former Federal Reserve chairman, now 84, is gingerly suggesting that perhaps regulators should help rein in giant financial institutions by requiring them to hold more capital.
Mr. Greenspan, once celebrated as the “maestro” of economic policy, has seen his reputation dim after failing to avert the credit bubble that nearly brought down the financial system. Now, in a 48-page paper that is by turns analytical and apologetic, he is calling for a degree of greater banking regulation in several areas….
Rival warned regulators over Lehman – Financial Times
Former Merrill Lynch officials said they contacted regulators about the way Lehman measured its liquidity position for competitive reasons. The Merrill officials said they were coming under pressure from their trading partners and investors, who feared that Merrill was less liquid than Lehman…..
The findings raise questions over what federal regulators knew about Lehman’s accounting and when they knew it. In the account given by the Merrill officials, the SEC, the lead regulator, and the New York Federal Reserve were given warnings about Lehman’s balance sheet calculations as far back as March 2008…..
JPMorgan also used accounting gimmick – Financial Times
JPMorgan Chase recorded some repurchase trades as sales, the same accounting gimmick that spawned Lehman Brothers’ now-infamous “Repo 105s”, suggesting that the failed bank was not alone in its interpretation of a new accounting rule.
Unlike Lehman, which never disclosed the effects of its repo deals on the firm’s balance sheet, JPMorgan detailed the year-end values of its repo sales and purchases in annual reports beginning in 2001, after a new accounting rule was introduced…..
SEC welcomes Lehman report as ‘helpful’ – Financial TImes
The Lehman Brothers report will be “helpful” to US regulators investigating whether to bring civil fraud charges against the failed bank’s top managers, Mary Schapiro, US Securities and Exchange Commission chairman, told Congress.
But former prosecutors and white-collar crime experts say it is far from certain that federal enforcers will find evidence to support criminal charges, let alone convictions, against key players in the Lehman collapse or the broader financial crisis….
Lehman estate fight with Barclays escalates - Financial Times
The estate tasked with liquidating Lehman Brothers’s remaining assets has escalated its legal fight with Barclays, arguing the UK bank now owes the bankrupt firm $11bn from its purchase of Lehman’s US operations…..
The estate wrote on Thursday in a filing that Barclays’s response “studiously avoids the critical and inescapable fact that this court was not told about billions of dollars in unauthorised and undisclosed changes to the sale transaction it actually approved”….
Speculators seen increasing Greek borrowing costs – Reuters
Hedge fund speculators have cost debt-laden Greece at least an extra 2.5 percentage points to borrow money, said one European politician who is pushing for a clampdown on bets that a country can’t pay back its debts.
Poul Nyrup Rasmussen, president of the party of European Socialists and a major supporter of tough hedge fund regulation, said speculative use of credit default swaps (CDS) — which insure against debt default and are blamed by some for exacerbating Greece’s debt crisis — should be limited or banned…..
CFTC Gensler: Determined To Reform OTC Market - Wall Street Journal
Commodity Futures Trading Commission Chairman Gary Gensler said Thursday the U.S. is determined to press ahead with reforms to the over-the-counter derivatives market, which should be implemented during 2011…..
Trichet backs tougher CDS regulation – Financial Times
Jean-Claude Trichet, president of the European Central Bank, on Friday threw his support behind tougher regulation and oversight of the huge credit default swap market.
It was important that “certain financial instruments, which were introduced in consideration of their positive effects for the hedging of risks, should not be misused in a speculative manner”, he told a Brussels-based conference on bank crisis management….
Palm Narrows Loss, but Phone Sales Drop – Wall Street Journal
Palm Inc. reported a narrower quarterly loss but warned of significantly lower revenue in the current quarter amid disappointing sales of its latest smart phones.
The Sunnyvale, Calif., company’s results follow an announcement last month that its flagship Pre and Pixi smart phones, which were launched last year, aren’t selling as well as it hoped. The struggling handset maker has been beset by competition from deep-pocketed rivals such as Apple Inc. and has also been hurt by heavy marketing by carriers for rival devices….
Tags: Accounting games, Alan Greenspan, Bankruptcy, CDS, Fed, Greece, Hedge funds, JP Morgan, Lehman Brothers, Merrill Lynch, Palm, SEC, Sovereign debt
