Tagged: Volcker

Volcker Rocks IR

Volcker would be a great name for a shred-metal band. It seems vaguely gothic and you can picture musicians in leather with guitars and tattoos. Maybe colored hair.

Alas, no. The Volcker Rule is no band. But it’s prompting musical chairs that may rock IR. I’ll tell you how in a moment. First, this:

If you’re a member of MAPI, I’ll be regaling your IR council Friday Sept 14 with tales of the tape. If your IR program is stuck in the 1980s with a mullet and a Wurlitzer, come occupy a seat at the Intercontinental.

Second, a word on markets: No clanging claxons but we’re tapping the tam-tam on market risk. Hedging is up. Sentiment is vastly neutral – like painting the ceiling gray. Market structure to end August was a restive crowd in a mall at closing time.

Paul Volcker calmed the crowd. The six-foot-seven-inch Fed chairman loomed over markets from 1979-1987, earning praise for heeling rampant inflation. In 2010, a section of Dodd-Frank aimed at halting speculative trading by large commercial banks came to be called the Volcker Rule because the eminent economist had proposed it.

The rule hasn’t yet taken effect but Wall Street is already scurrying like a school when the bell rings. An exodus of proprietary traders – professionals deploying a bank’s own assets for return – from names like Goldman Sachs and Morgan Stanley is setting up shop. (more…)