LyrArc Article Gist
The problems in Chase bank's Investment Office unit were first reported in the WSJ April 5, 2012. Large positions were taken by Mr Michael Iksil, a trader in the London office that ruffled credit markets. Iksil reports to Achilles Macris, head of the European operations of the Investment Office unit, and Macris reports to Ms. Drew. At the time CEO Dimon and other executives reviewed trading positions and made no changes in strategies. After April 13 earnings call losses increased to $200 million a day, and review teams assigned to look into this found errors in the way the hedges were conducted. In early May Chief Risk Officer John Hogan and Europe head Daniel Pinto monitored the situation. The hedges were designed to reduce risk in the eurozone financial crisis, but the complex transactions based on relationships between a number of derivative indexes for investment grade and junk grade corporate bonds in U.S. and Europe worked in ways that led to large losses, and were so complicated that they were poorly understood....

LyrArc Article Gist
Eisinger says the Federal Reserve's staff plays an important role in regulatory reform. He quotes Cornell law professor, Robert Hockett, who says the general counsels tend to become more conservative over time and inclined to support the status quo. This makes required regulatory changes such as increasing the capital reserves at banks and reducing leverage more difficult. Eisinger describes the position of the U.S. Federal Reserve's general counsel, Scott Alvarez, on disclosure of lending by the Fed during the banking crisis, and on capital reserves, which veered more to the position of the banks which preferred less information be released and capital reserves be left at the 5% level than the 6% proposed by the FDIC and the Office of the Comptroller of the Currency. Comments by Alvarez in nonpublic hearings to Congressional staff members on May 18, 2012, about the JP Morgan London Whale trading losses, according to Eisinger, shows lack of awareness of the overall implications of the breakdown in financial controls and supervision inside the bank....

LyrArc Article Gist
Banks in the UK are considering giving investment bankers allowances to make up for lower bonuses mandated by new EU rules. This is one of the mechanisms banks are considering to be able to pay competitively. EU rules do not limit total compensation making it possible to shift pay given earlier as bonuses to the new 'allowance' category. For instance a 1.8 million euro bonus might be dropped to 1 million euros and 800,000 euros given as an allowance. Such an arrangement means banks can adjust the allowance as markets and regulations change. Increasing fixed salary would mean effects such as higher pension costs. Most of the 35,000 higher level banking employees to which the EU rules apply work in London, England. The UK Prudential Regulation Authority has come out against the EU bonus rule and the UK has taken this up in a legal challenge at the European Court of Justice. U.S. and Asian banks are deferring parts of bonuses and paying in a mix of shares and cash.

LyrArc Article Gist
Thailand's prime minister, Yingluck Shinawatra's intervew with foreign journalists on Dec. 11, 2013. She says no one listens to people in the northeast and northern region of Thailand around Chinag Mai where most of her support lies. She was only 18 when her mother died and her older brother, a former prime minister, is seen by her as more of a senior figure. Protesters in Bangkok see her brother Thaksin Shinawatra, a Thai businessman in London as the one who runs the government's policies. The country is badly split between urban Bangkok and the rural regions in the north. The military ousted Thaksin in 2006 and protesters where shot in 2010 in a crackdown. The latest episode of confrontation between the two parties reflecting the two regions is a followup to this, as an amnesty bill was introduced by Yingluck which would let her brother return to Thailand. The interview was setup at an airbase outside Bangkok, as the country remains deeply divided and protesters occupy most of Bangkok....

LyrArc Article Gist
Berlin's Neues Museum destroyed during the war, is painstakingly built using the bricks and stone from the ruins, by the London architect David Chipperfield. As for many public buildings in Germany the past is opportunity, and the scraps of the old building were used, with "millions of decisions" technical, aesthetic and political in a vast jigsaw puzzle handed down by Stuler the original architect of the building- which opened in 1855 to promote "the elevated interests of the people." Chipperfield built a new building using the remains of the old. And based on the long lines in Berlin, waiting for hours in the cold March weekend and stretching for half amile, the building works for the people of Berlin. Of the grand central stairway that edges on upward through the old brick and into the new structure, upward to more light, the NYT writer Kimmelman says that this space is a metaphor for Germany today. In their response to its history Berliners are keeping the history as part of the large jigsaw puzzle of human experience and response....

LyrArc Article Gist
BP will cut an additional 5000 jobs by mid 2009 with most of these cuts at places like its London headquarters. This is on top of about 9500 jobs that are part of a plan to sell gasoline stations in the USA. The refinery that had a fire in Texas will be back to production at full capacity by mid 2008. Profit excluding one-time items was $4.0 billion for 4rd quarter 2007, less than analysts expected because of declining production and smaller refining margins. BP sees oil at between $60 and $90 a barrel for 2008 and 2009, and plans to increase production to 4 million barrels a day in 2009 and 4.3 million barrels a day in 2012. New production will come from places like Canada, Oman and Libya. Spending for exploration will increase by $3 billion to $22 billion this year. Under Browne BP had stayed away from Canadian oil sands, but Hayward has formed a joint venture with Husky Energy to link a BP refinery in Ohio with Husky's Sunrise oil sands project in Alberta.

LyrArc Article Gist
Richard Portes of the London Business School provides two good reasons why the EU's decision to adopt the French Banking Federation's proposal for rollovers with 10% interest costs is a serious mistake. It doubles the interest costs from 4-6% to 10% with 2% Greek GDP growth and makes debt servicing untenable. Portes says the real Brady Plan from the 1980's included a 35-40% bondholders haircut. Deals of this type have a precedent- in Mexico in 1988 and in Argentina in 2001 such bond exchanges were soon followed by deals that placed bondholder haricuts on creditors. The lesson from Latin America in the 1980's, says Portes, is that the burdens of servicing a debt of such proportions under onerous conditions only extinguishes the enterprise, investment and productive capabilities of the particular country trying to service that debt, making the debt even less serviceable. See the Wall Street Journal's editorial on this deal which it calls "The French Deception." The terms sound like Greek to the editors leaving a sense that French banks are only saying "gimme." The only benefit achieved may be putting off the problem and avoiding contagion to Portugal and Spain. Yet this is not that much of a benefit when one realizes that the problem has not gone away, and is likely to look much worse six or nine months from now....

LyrArc Article Gist
Preliminary reports cited by The Times of London say Air Traffic Control was understaffed at the time of the accident, a midair collision of American Airlines jet over Washington National Airport. It says only one person was handling landings departures and communications with helicopters in the vicinity of Washington National Airport.

LyrArc Article Gist
The Iraqi army takes over the Al Nuri Grand Mosque in Mosul, but what the mosque and the city itself lie in ruins. The minaret is gone in the debris, a shattered city is what is left from the Islamic State takeover of the city in 2014 and the eight month effort in 2017 by the Iraqi army to retake the city.   For more depth see links and groups or search- The problems of Mosul started with the openly sectarian administration of prime minister Nouri Maliki leading to alienation of Sunnis in Mosul. Corruption in the administration and weakness in the Iraqi army combined with alienation of Sunnis to create an opening for a militant group Islamic State in Syria and Iraq. As Iraqi units disintegrated Mosul fell, leading to a worsening of the refugee crisis in Syria and Iraq, increasing the flood of refugees to Europe, and the series of terrorist incidents in Paris, Berlin, London, rise of right wing groups in the European Union, in a chain reaction. The failure of the Obama administration to setup a "no fly zone" in Syria simply compounded the crisis into what it is today. At the root of the crisis - the failed efforts to reconcile Sunnis and Shiites in Iraq, and the sectarian conflicts in the region as a whole stretching from Saudi Arabia and Egypt to Iran.     ...

LyrArc Article Gist
High speed rail networks from London to Leeds through Birmingham and Manchester get Tory and Labor support as the mood shifts to favor fast rail connections in Britain.

LyrArc Article Gist
Goldman Analyst in London office who has made the right call on oil prices. He says it will be $85 at year end 2008 and $95 in 12 months.

LyrArc Article Gist
With 121 medals the U.S. team did better than in any Olympics except 1984. Britain did extremely well, and the Australians were overestimated. China did not do as well as in the Beijing Olympics, which was expected. The British investment in training athletes has paid off since the London Olympics, getting 67 medals.

LyrArc Article Gist
Vic Starmer spent the day after Thursday's election night at a race course in Surrey. Her mother introduced her to flat racing and she spent time at the Doncaster race course while growing up. She is a solicitor, ten years younger than Keir Starmer, and works in occupational health for the NHS. Vic met Keir Starmer when he called her about a brief she prepared as a solicitor. Starmer says their first interaction was when she was questioned about the brief and s she put down the phone was overheard saying "who the fuck does he think he is?"  Vic grew up in a middle class home in north London the daughter of a father whose family left Poland in the 1930's who worked as a accountant, and a mother who was a GP physician. She went to Cardiff University to study sociology and law, was elected student union president in 1994. They married when Keir was 45 years. Keir Starmer says about her-      " very sassy, very down to earth, no nonsense from anyone." She was political long before Keir, she understands politics, yet she wants to stay outside politics. On the walls in their Kentish Town kitchen the pictures reflect her space, nothing political, just the Doncaster race course, a familiar space for her.   ...

LyrArc Article Gist
US antiship missiles Nmesis are placed in the Philippines islands to protect parts of the Pacific region in 2025. During the period of US engaged in wars in the Middle East under Bush and then Obama, the US Navy lost time and China built up its Navy. The lack of foresight of US business and focus on profits of firms like Apple shipping manufacturing to China meant loss of the manufacturing knowhow as other companies followed Apple for 2 decades. The result is that it takes long lead times for the US to build the ships the US Navy needs, a repeat of the situation the US faced with Japan by 1935 when the US was focused on tackling the Great Depression under FDR. At that time at a Naval Conference in London in 1934 the Japanese walked out rejecting the Washington Naval Agreement of 1924-25 that limited Japan to 60% of the US and British Navies ships tonnage. By 1941 the Japanese Navy was its main reason for its efforts to control Asia. FDR who had been Secretary of the Navy was not far behind so that America launched its own efforts in 1937- in an 18 month period 1942-1943 the US destroyed the Japanese Navy and protected China, India, from the worst Japanese Kwantung army elements that ran the government leading to 14 million lives lost in China. ...

LyrArc Article Gist
President Trump on a three day visit to the UK promised a free trade deal with Britain if it made a decisive break with the European Union. Such a free trade deal could take years, offer small benefits compared to the loss of the much larger trading relationship with the European Union. It would face hurdles in passage through Congress because Democrats controlling the House of Representatives see a decisive break with the European Union including the customs union arrangement as affecting the open border in Ireland risking the hard won peace in Northern Ireland.  Prime Minister Theresa May proposed a withdrawal arrangement that would keep the customs union arrangement but has failed to secure the support of a faction within her Conservative party that favors a decisive break from the EU. Such a break that Mr. Trump and Boris Johnson the leader of this faction -and a favored candidate to succeed prime minister May after her resignation- would reduce Britain's GDP over the next 15 years at the higher end of the range of 0.1% to 9% a year. A decisive break called a no deal Brexit with no arrangements or agreement for withdrawal with the EU, would lead to a loss closer to the 9% estimate. British experts to the EU are about $275 billion or 44% of its total exports compared to about $44 billion to the U.S., according to HMS Customs source, showing how important it is for Britain to maintain a close trading relationship with the European Union. British farmers would also face competition through agricultural imports from the U.S. in a free trade deal. During his visit Mr. Trump also stated the National Health Service, everything would be on the table in a free trade deal with the U.S.  Theresa May responded by saying that the NHS would not be open for negotiation to American corporate involvement. Public sensitivity is high on any change to the National Health Service. The trip of president Trump to London in which he supported Boris Johnson as candidate to succeed Theresa May, with discussions between Trump and Johnson for 20 minutes, and a visit by Nigel Farage to the U.S. embassy, and no meeting with Labour party leader Corbyn, only shows the widening of differences on the issue of British withdrawal from the EU making any deal for withdrawal even less likely. Labour party leader Jeremy Corbyn now favors a second referendum on whether Britain should leave the EU.  ...

LyrArc Article Gist
This WSJ report on critical analysis of coronavirus data has a very useful chart of Estimated Range of Symptomatic Cases Reported by Country. Complete coronavirus data for all symptomatic persons who have the coronavirus infection is lacking in most countries. Many people in large populations have symptoms and are positive but are not reflected in the official data collection. This is a big problem as the total number of cases are understated by a magnitude of twice to five times the numbers reported in official tally.   South Korea has done a good job of getting more of the symptomatic people with the infection in its data, as about 53% to 90% of such persons are reflected in official data. Next comes Germany at a range of 38% to 55%.  China comes third and has about 28% to about 38% of such persons reflected in its data, the U.S. currently on April 4 at about 14% to 19%, according to this chart in the WSJ. The source for this is Mathematical Modeling Center at the London School of Hygiene and Tropical Medicine. What this means is that the US. number of cases at 278,000  reported infected people with symptoms (April 4) is only 14% to 19% of the true number. Another way to say this is that the actual infected persons with symptoms is about 5 times what is reported, or over 1 million not the 278,000 reported.  As happens for China data collection agencies may never get the true number. To be comparable to the Chinese numbers, as the U.S. is a large country, the figure closer to the true numbers would be twice the 278,000 reported or over half a million symptomatic infections of coronavirus in the U.S. Why is this data important. With widespread testing as in South Korea one gets data that tells one how many people are infected (the size of the problem) and therefore the resources needed and the point of greatest impact. Also it tells one the typical transmission rate per person, and it helps hospitals in each area know what to expect and what resources are needed to prepare- not find people suddenly turn up in the E.R. in unpredictable numbers. The lack of widespread testing and better reporting in the data to get a grip on the pandemic is shown in this chart for countries hardest hit, less than 5-6% for Italy and Spain. The UK and France at 5-8%.   ...

LyrArc Article Gist
The British Bankers Association calls for new rules in setting of the LIBOR rate. Angela Knight, CEO of BBA said: "I don't think even in your wildest dreams you could have thought it was going to be like that." The Bank of England is more likely to to be directly involved in the setting of the LIBOR rate under new rules.

LyrArc Article Gist
Gerard Lemos writes from London about Chinese society today. He was visiting professor to Chongqing University of Business and Technology from 2006 to 2010. During this period he talked to many ordinary Chinese to find out what was on their minds -concerns that stemmed from China's one child policy, urban migration, health care needs, education and jobs were all uppermost in their minds. Lemos says even with the rapid industrial progress the lives of ordinary citizens are affected by fears and uncertainty about the future. The lack of jobs, lack of good healthcare, children who have migrated, are all part of their daily lives. For older people the one child policy in an aging society means the prospect of being alone in old age and the prospect of inadequate health care. For the young education and job concerns. Lemos points out that it is not about a choice between China's model and a Western model, it is more about a search for the Chinese soul, now that the basic material conditions are in place with the usual gaps and problems. At the same time it is a society prone to political sentiment such as the anti-Japanese protests....

LyrArc Article Gist
German banks hold $28 billion euros or $37 billion in Greek bonds according to Barclays Capital using IMF data. This debt is now rated as junk by Standard and Poor's since last week. Just one bank, Hypo Real Estate, now owned by the German government after a bailout has $10.5 billion of Greek bonds. This gives a new twist to what is happening in Greece, with Germany involved through the support its own banks would need if Greece defaulted and these bonds become worthless. Total debt holdings of Portugal, Italy, Ireland, Greece and Spain for example at Hypo Real Estate is $52 billion. France is also heavily involved through its banks. It has $67 billion in holdings, including $9 billion held by the Bank of France, according to Barclays. According to BIS data American banks hold $16.6 billion in Greek debt. Even the healthy large Spanish banks like Santander have their problems, with Santander having $64 billion of assets in Portugal, according to analysts at Nomura in London. In Spain most of the bad debt problems are concentrated in the midsize banks, but if Portugal were to take a hit then the large banks would be affected adversely....

LyrArc Article Gist
A German reporter questions the value of the G20 meetings following the violence on streets at the last Hamburg meeting. He says the first G20 during the global financial crisis was useful but later meetings have not lived up to the hope for discussion and search for solutions to world problems. Global trade is at the top of the agenda following the tariffs dispute between China and the U.S. Divergent interests of participants are a problem. Would going back to G-7 in private meetings be a solution asks this reporter.