![Taming the Megabanks](https://wallstreetonparade.com/wp-content/uploads/2020/10/Taming-the-Megabanks-iii.png)
By Pam Martens and Russ Martens: February 29, 2024 ~ On Tuesday, the Vice Chair for Supervision at the Federal Reserve, Michael Barr, delivered a speech at a risk management conference in Manhattan. Barr’s objective was to convince conference attendees that the Fed has its eye on the ball when it comes to Wall Street mega banks and their counterparties who are sitting on the opposite sides of derivative trades totaling tens of trillions of dollars. (Yes, trillions.) The most illuminating and dangerous elements of Barr’s speech are what he didn’t say. To remind attendees of what could happen if counterparty risks were not managed properly, Barr cited Long Term Capital Management (LTCM) and Archegos Capital Management. LTCM was a hedge fund stocked with the so-called “smartest men in the room,” including two Nobel laureates, who fed mathematical formulas into computers that generated trades using astronomical levels of leverage. Of course, this … Continue reading