Where’s Voldemort?

A certain former head of one of the regulators, closely analysed by the Hayne Royal Commission was some how not mentioned.  This former head, let’s just call him Voldemort,  was previously managing director and global head of securitization for French bank Societe Generale in New York.

For those not aware, Soc Gen received one of the largest bail outs from the US Federal Reserve during the global financial crisis and this same Soc Gen was (in 2017) fined $50 million by the US Department of Justice for pre-crisis RMBS fraud (RMBS being residential mortgage backed securities).

According to HousingWire Mag:

SocGen was also well aware of the widespread issues with subprime loan origination and securitization, as one senior member of SocGen’s Contract Finance group remarked at the time: “The whole process [was] a joke.”

Voldemort was appointed Chairman of this financial services conduct regulator by the Australian economy’s best friend, the man of innumerable surpluses and non revenue raising taxes, the Hon. Swan.  He of the budget “saves”.  And boy did Voldemort deliver the saves.

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13 Responses to Where’s Voldemort?

  1. stackja

    Where’s Voldemort? Given an F!

  2. Please note who was the assistant treasurer

  3. RobK

    I suspect you maybe onto something here Sparty.

  4. Tobias E

    For those not aware, Soc Gen received one of the largest bail outs from the US Federal Reserve during the global financial crisis

    A French bank bailed out directly by the US Federal Reserve? How very generous of les Américains!

    You wouldn’t happen to have a link to support this seemingly counter-intuitive idea?

  5. Tobias E

    you wouldn’t happen to have a link to support this seemingly counter-intuitive idea?

    https://www.reuters.com/article/us-usa-fed-socgen/fed-says-was-unaware-of-socgen-losses-idUSN2427807820080124

    Ummm, do I need to point out the obvious – that there is no mention of Soc Gen receiving “one of the largest bail outs from the US Federal Reserve”?

    Do you have any other sources, ones that say the US Fed actually gave bailout money directly to Soc Gen?

  6. Emergency funding from the window is a bail out. Suggest you look yourself inc on wiki leaks

  7. Tobias E

    Suggest you look yourself inc on wiki leaks

    It’s commonly accepted that it’s incumbent on a person making a claim, if challenged, to provide evidence to support it.

    To suggest otherwise is an interesting new take on Russell’s teapot!

    And besides, which institutions received bailout funds following the GFC and in what amounts, that’s all on the public record. For instance, we don’t need Wikileaks to know GM received US$51 billion in bailout funding under the TARP program.

  8. Tarp was different to emergency access to fed liquidity window. Plus us fed does not have the same transparency obligations as does us congress. Read the doc 8 years ago and not planning the spend the day searching. In your mind does this change the tenor of the post.

  9. Tobias E

    Read the doc 8 years ago and not planning the spend the day searching.

    And you don’t think in 8 years of this document’s existence someone might have cited it to provide some evidence of it in index searches?

    If your claim was true, a French bank with largely French shareholders had secretly ripped off US taxpayers to the tune of billions. Now think of this, if a leaked document proving that happened has been floating around for 8 years – no one, not one single person, has been bothered to blow the whistle?

    As for emergency liquidity being a bailout, most people would disagree – liquidity is liquidity, bailouts are bailouts, and precise use of language helps debate along (it’s better to be debating ideas instead of words) – but even if one accepts that emergency liquidity is a bailout in kind, the article you cited actually says the Fed pumped money into the market as a whole not knowing about Soc Gen’s losses from a rogue trader. You don’t even have to go back into the article to know that, it’s in the URL!

    Sorry, Spartacus, I think it’s time to admit your claim was based on a faulty eight year old recollection. We all make mistakes – to err is human; to admit it … well it seems like it’s only politicians (from all sides) who won’t admit when they’re wrong. Not exactly great company!

  10. The difference between the price paid for funding from the fed window and from the public markets is a bailout. That the fed got back the face value of cash does not account for the true cost of capital.

  11. Tobias E

    Please refer to the above. What I wrote, and especially the article you cited:

    WASHINGTON/CHICAGO (Reuters) – The Federal Reserve, when it decided on an emergency interest rate cut this week, was unaware of a scandal involving a rogue trader that led to about $7 billion in losses at France’s Societe Generale, a Fed official said on Thursday.

    So according to Spartacus logic, an emergency interest rate cut by the Fed in January 2008 – which of course benefited all floating rate, Fed Funds benchmarked borrowers – had nothing to do with the then fast unfolding housing bust but was in fact only intended to bail out Soc Gen even though the Fed didn’t even know Soc Gen needed a bailout when it took the decision to cut rates!

    Wow, if I possessed the sort of perfect prescience Janet Yellen demonstrated here, I’d be buying a lottery ticket!

    Spartacus Redux, you’re like an aging prize fighter who has come out of retirement once too often and can no longer defend themselves. A sad sight indeed.

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