Goldman: plays a simple game better than most

Quarterly figures just released by Goldman Sachs this morning demonstrate (again) that the firm plays - what should be a simple game - better than most competitors. No need for expensive consultants to figure that out, just common sense and experience.

JP Morgan: Review of the 'Whale' Trades

Nothing but a very thorough review of the losses made by the 'Whale' was to be expected but one still has to wonder how much good this report will do. Its recommendations certainly will keep a lot of regulators and JP Morgan staffers very busy in the future. But looking at the quite unstructured text in the 18 pages it contains hints at the main problem any financial institution faces: complexity and human frailty combined with a good mix of fear, risk and greed. Setting up ever more complex procedures and review bodies will only go so far and never be a perfect substitute for common sense and competent, honest and modest people.

UK: Hellbent on destroying its banks?

Readers know my scepticism with respect to the LIBOR witch hunt (and the PPI/payment protection insurance brouhaha that is completely blown out of proportion and turns all notions of individual responsibility on its head). But if there is any truth to it that the regulatory jobsworths (and their political puppetmasters) put pressure on Royal Bank of Scotland to get rid of two senior executives than one really has to say that the 'Coalition' here in the UK is hellbent on destroying what is left of indigenous UK banking institutions. Cameron and Osborne (and with a little bit of luck Nick Clegg as well) will find themselves cushy jobs with their Etonian or City friends and hangers-on after (as I would expect) they lose the next election. But the taxpayer and citizens of the country would have seen their (involuntary) investment in RBS go down the tubes.

Libor Trades - Simplistic Calculations

Reports about the profits that Deutsche Bank is supposed to have made (where can we finally expect to see a hard copy of dollars and cents?) are simplistic to say the least. Of course, ALL trading houses will (hopefully) have made money from 'Libor trades'. The alternative would have been to have lost money in these trades. But as even any intern serving in an investment firm knows, that does not mean that any profit has been made in an improper fashion. Have any of the critics in the media, politics and regulators even had a good look at the acres of office space trading desks occupy? do they know how many different desks and investments are linked to Libor? Then they would understand that even the efforts of a group as large as the (supposed) group of UBS staffers can hardly have shifted the actual Libor rates produced collectively by ALL the contributing banks by more than a tiny amount. And even within UBS, for example, there would have been winners and losers on any given day, just that the people responsible for Libor quotes may have gained a small advantage at their expense. But for that I still would like to see actual proof and not general displays of shock, horror etc