Juggling Dynamite

“Sens. Elizabeth Warren (D-Mass.) and Sherrod Brown (D-Ohio) are both calling for Congress to investigate the New York Federal Reserve Bank after recently released secret recordings show the central bank allegedly going light on firms it was supposed to regulate.

Warren and Brown, both members of the Senate Banking Committee, called for an investigation of the New York Fed after Carmen Segarra, a former examiner at the bank, released secretly recorded tapes that she claims show her superiors telling her to go easy on private banks. Segarra says that she was fired from her job in 2012 for refusing to overlook Goldman’s lack of a conflict of interest policy and other questionable practices that should have brought tougher regulatory scrutiny.

After Segarra made the tapes public in a joint report with ProPublica and This American Life on Friday, Warren was quick to call on Congress to take action.” See: Secret tapes of Fed meetings

In case you missed it, here is a link to the Segarra interview and tape sampling from last week.

“We’re still not wise enough to realize that our current model is a ‘Ponzi’ scheme rushing toward its inevitable ‘Minsky moment’,” Steen Jakobsen, a chief economist at Danish investment bank Saxo Bank, said in a research note on Friday. Here is a direct video link.

“We’re still working with the same dog-eared script we were introduced to all of five years ago,” he said. “Maintain sufficiently low interest rates to service the debt burden, pretend to have credible plan, but never address the structural problem and simply buy more time. But while we were able to get away with this theme for an awfully long time, the dynamic is now changing.”

More honest comments about investment banking.

Bloomberg Contributing Editor Bill Cohan discusses risk taking and incentives on Wall Street. Here is a direct video link.