Bank Hedges and Social Justice

by  Chidem Kurdas To hedge or not to hedge? That’s the question for many an endeavor. Farmers hedge by selling their harvest ahead of time. Building managers hedge by locking in a price for heating oil or natural gas—last year many got it wrong, blindsided by the decline in the price of gas. Most hedges … Continue reading Bank Hedges and Social Justice

Big Bank Obesity Conundrum

by Chidem Kurdas Is the Federal Reserve a hotbed of trustbusters? Fed officials (as well as some academics) have been calling for forcible downsizing of big banks . “I am of the belief personally that the power of the five largest banks is too concentrated,” Dallas Federal Reserve Bank president Richard Fisher said a few days … Continue reading Big Bank Obesity Conundrum

European Bailout’s Scapegoats and the Future

by Chidem Kurdas Before the near-trillion-dollar bailout package for financially shaky euro-zone governments was announced, French president Nicolas Sarkozy hauled out the financial whipping boys yet again. He promised to “confront speculators mercilessly.” They would soon “know once and for all what lies in store for them,” he said. Presumably he meant that those betting on … Continue reading European Bailout’s Scapegoats and the Future

Goldman Sachs Hate Week

by Chidem Kurdas George Orwell’s classic novel, Nineteen Eighty-Four, describes a political ceremony called the Two Minute Hate, featuring Public Enemy Number One, a reprobate named Goldstein. People attend official rituals to work up a frenzy of hatred against Goldstein and love for their protector, Big Brother, or B-B. To quote Orwell, at the climax … Continue reading Goldman Sachs Hate Week

Beating Bonuses into Risk Controls

by Chidem Kurdas Deferred vesting of stock options is not a new idea—it gained currency amid the corporate scandals that emerged in the aftermath of the late 1990s stock bubble. It appears to be making more inroads at present, in the aftermath of the twin credit and property bubbles. This growing practice is not confined … Continue reading Beating Bonuses into Risk Controls

Big Bad Bank and Little Red Trustbuster

by Chidem Kurdas A surprising new Small-Is-Beautiful movement is afoot.  Mario Rizzo, Jerry O'Driscoll, Harry Kaufman and others make a case for  breaking up too-big-to-fail financial institutions. As Mr. Kaufman puts it, otherwise those companies will become financial public utilities backstopped by the government. It’s not likely that the 2008 crisis would have been prevented … Continue reading Big Bad Bank and Little Red Trustbuster