Good morning, finance aficionados. Here are some morning links, along with a few notes, quotes and anecdotes.
The campaign to install Larry Summers as Fed chairman is looking shakier by the day
He’s a Rubinite and a Citigroup consultant with a history of protecting Wall Street. (What’s there not to like!) Richard Durbin of Illinois, the Senate’s second-ranking Democrat, says in an interview with Bloomberg News that he would “have a lot of questions” if President Barack Obama picks Summers to replace Ben Bernanke as Federal Reserve chairman. Durbin is among the 19 Democrats and one independent who signed a letter urging Obama to choose Fed Vice Chairman Janet Yellen for the post. The New York Times in an editorial says Summers “is not the best person for the job.” A solid nominee wouldn’t polarize the Senate, much less the president’s own party.
So what does Summers think about quantitative easing anyway?
Wall Street Journal reporter Jon Hilsenrath has done “a close reading” of Summers’s columns and speeches and spoken to unnamed “people familiar with his thinking.” He writes that Summers is skeptical about the benefits of printing money to buy bonds -- but that he doesn’t see much harm in it. So maybe he would mark a shift from Bernanke. Or maybe not.
Deutsche Bank discovers its old code of conduct might not have been working so well
Der Spiegel notes that the German bank’s top executives presented a new code of conduct to its “100,000 staff last week in a bid to bring about cultural change in the bank, whose reputation has suffered from scandals, fraud allegations and accusations of reckless profiteering that contributed to the financial crisis.” Here’s the canned quote from co-CEOs Anshu Jain and Jurgen Fitschen: “We took an important step toward our objective of placing Deutsche Bank at the forefront of cultural change with the launch of our new values and supporting beliefs,” they said. “In the months ahead, together with our senior leaders from across Deutsche Bank, we will work on embedding these values." Better yet, how about explaining what went wrong with the old values? On a possibly related note, earnings were down 18 percent for the second quarter.
Bank of England and Nazis in the same headline can’t be good
Financial Times reporter Claire Jones writes that “the Bank of England played a vital role in one of the darkest episodes in central banking history, facilitating the sale of gold looted by the Nazis after their invasion of Czechoslovakia in 1939.” The whole story had been buried in a previously unpublished history of the central bank’s activities in and around World War II. You have to wonder what the gnomes at the BOE were thinking.
China: World’s Worst Stock Market
From Bloomberg News: “The Shanghai Composite Index, which doubled in 10 months through August 2009 as the government poured $652 billion of stimulus into building roads, railways and housing, has tumbled 43 percent from its high, destroying $748 billion in market value. Only Greece’s ASE Index has fallen more in percentage terms.” If that isn't a signal that something is afoot, I don't know what is.
(Jonathan Weil is a Bloomberg View columnist. Follow him on Twitter.)