Bloomberg finds a contrite banker, John Reed the former CEO of Citigroup who merged it with Sandy Weill’s Travelers in the late 1990s to create a financial supermarket, one that a decade later would have the distinction of being a third-owned by Uncle Sam. Reed calls for the reinstatement of the Glass-Steagall division of banking and trading.
— Couldn’t get to this yesterday, but JPMorgan Chase will pay $75 million and give up a claim to $650 million in fees for paying to play county officials in Alabama to buy its derivatives, something that eventually pushed the county to the brink of bankruptcy. Seems like a big story to me. The New York Times thought so, as did Bloomberg, but The Wall Street Journal stuffed it on C8. These weren’t entry-level rogues, apparently. The two accused, one of whom has already served a bit of time for a similar scandal in Philly, headed JP Morgan’s municipal derivatives unit for most of this decade.
— The New York Times’s Floyd Norris looks at a proposal in Congress to gut Sarbanes-Oxley, the regulation that came out of the accounting scandals of the last crash. “The House Financial Services Committee this week approved an amendment to the Investor Protection Act of 2009 — a name George Orwell would appreciate — to allow most companies to never comply with the law, and mandating a study to see whether it would be a good idea to exempt additional ones as well.”
— Finally, Reuters’ Rolfe Winkler is provocative here in talking about how there’s nowhere to hide these days, investment-wise: “The economy is so over-levered in my estimation, its equity value is probably negative.”