Volcker Death Grip

Regulators are expected to release a finished version of the Volcker Rule sometime today.  The new rule will attempt to prohibit banks from engaging in proprietary trading and limit their ability to hedge.  There seems to be a lot of debate over what exactly constitutes proprietary trading (Volcker: “It is like pornography.  You know it when you see it.”) and also if there is perhaps some merit to a bank’s ability to hedge their portfolio and therefore minimize risk (but not like how this guy “minimizes risk”).  The Volcker Rule is expected to make some distinction between proprietary trading and market-making which can be hard to differentiate.  One proposal for telling them apart is to look at traders’ compensation, whether they are paid as a percentage of their profits and losses or as a commission for facilitating customers’ trading.   Of course, most of the banking crowd working for one of these “traditional banking is so boring let’s be a hedge fund” banks doesn’t seem to like the new rule, especially (maybe?) those working for Goldman Sachs.  Some of them are pretending like they don’t care.  It seems a bit fortuitous that the Volcker Rule should come into fruition the day after the US government sold its stake in GM and lost $10 billion.  Taxpayers don’t like bailouts.  And they don’t like “Too Big To Fail.”  Putting things like bailouts, greed, big salaries, the London Whale and just like, you know, “the system, man” in a Volcker Death Grip is probably something they can get behind.  Meanwhile, the United States “love-to-hate” relationship with banks is going nicely in Switzerland: “Valiant Bank, a small Swiss bank, became the first in Switzerland to say that it would sign up to a deal with the United States aimed at ending a three-year tax evasion dispute with Switzerland.”

Energy: Forest Fuels (Alt)

The EU recently announced their goal to source 20% of their energy from renewable sources by 2020.  While solar panels and wind farms are somewhat ubiquitous across Europe, the traditional power companies are more inclined to make the switch from coal to wood (in other words “fossil” to “biomass”).  And “as biomass takes off, a new global trade in wood pellets is taking shape, with Europe emerging as the world’s largest importer.”  The “renewable” classification of burning wood pellets, however, remains in question.

NKorea: Kim Jong Un’s Removal of Uncle Comes as a Surprise (Alt)

“On Monday, North Korean state television showed Mr. Kim’s uncle, Jang Song Thaek, being dragged out of a meeting by security officials” to be “purged.”  Which is surprising, apparently, because anybody who pals around with Dennis Rodman must be totally stable.


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