Earlier this week, the UK government submitted draft legislation on its Electricity Market Reform (EMR). In a series of blog posts from last July, I critiqued the central premise underlying this insurance proposal. The touted benefits overlook the cost of risk passed along to UK taxpayers or ratepayers. They are based on a fanciful imagination [...]
The finance lawyer who blogs at Economics of Contempt has a very nice summary of what is required for JP Morgan to claim that the trades at the CIO unit are allowed under the Volcker Rule because they were “portfolio hedging”. It is a more comprehensive and textual version of our requirement that JP Morgan [...]
You like potato and I like potahto, You like tomato and I like tomahto, Potato, potahto, tomato, tomahto! Let’s call the whole thing off! from Let’s Call the Whole Thing Off by George & Ira Gershwin This past Tuesday was the closing date for Comment Letters to the CFTC on its proposed Volcker Rule, [...]
Lots of commentary on the web about the news that Delta Airlines is thinking about buying ConocoPhillips’ Trainer Refinery as a way to hedge the cost of jet fuel. Liam Denning at the WSJ’s Heard on the Street column offers a concise statement of the critical view.
In a previous post, I criticized a report by the consulting firm IHS on the potential impact of the Volcker Rule on the US energy industry. Kurt Barrow, Vice President of IHS Purvin & Gertz and co-author of that report, has sent me the following reply: Thank you for your interest in our report. We wanted [...]
Earlier today, the consulting firm IHS released a report decrying the horrible consequences that the Volcker Rule would have for the US energy industry and the economy. It’s a hatchet job. Why?
In a previous blog post, I criticized a study by the economics consulting firm NERA purporting to measure the costs companies would face as the Dodd-Frank reform of the OTC derivative markets is implemented. NERA is working on behalf of a group of energy companies lobbying to avoid some of the law’s mandates. Last week, [...]
February 23, 2012 – 8:18 am
As a part of its restructuring of debt, the Greek government has decided to issue GDP-linked securities: Each participating holder will also receive detachable GDP-linked Securities of the Republic with a notional amount equal to the face amount of the New Bonds of the Republic issued to that participating holder. The GDP-linked Securities will provide [...]
February 17, 2012 – 8:25 am
As part of the fallout from last August’s bankruptcy of the Federally-backed solar firm Solyndra, the Obama Administration appointed Herbert Allison, a Republican banker and former Treasury official to review the Department of Energy’s loan guarantee program. His report was completed at the end of January and released earlier this week. It contains many useful [...]
February 3, 2012 – 7:58 am
Today’s Wall Street Journal has a piece by Ian Berry about the possible restructuring of the CME’s rice futures contract. The design of the contract determines how effectively “farmers, elevator operators and beer brewers” can use the contract to do their hedging. The article is about problems that have shown in up in recent times [...]
