Regulators think bankers are bad people.

Your mileage may vary with this one:

At the heart of the issue is an inviolate social contract that bankers are supposed to honor. The government agrees to protect banks from collapse, and in return, bankers are meant to uphold the highest ethics when handling other people’s money. But when law-breaking and other missteps proliferate at banks, it is a sign that the industry has stopped cleaving to the special contract, endangering taxpayers.

Is that the deal? What could that deal mean? I think most people think the contract is "the government agrees to protect insured depositors, and the safety of the financial system, and in return, banks are held to capital and prudential requirements." The other part of the contract is "don't do illegal things," though that is not really industry-specific; nobody is supposed to do illegal things. Broad pronouncements about the ethics of and culture the industry worry me a bit; ask a banker sometime about recent regulatory failures.

The rest of this linkwrap may somewhat undermine that paragraph!

Herbalife: maybe a pyramid scheme?

There's an institutional-embarrassment issue here: If the investigation that the Federal Trade Commission opened into Herbalife yesterday ends up concluding that Herbalife is in fact an illegal pyramid scheme, why didn't they open the investigation earlier? It's not for lack of, you know, Bill Ackman constantly shouting and lobbying about how Herbalife is an illegal pyramid scheme. Why only open the investigation now? On the other hand, if it's not a pyramid scheme, what changed the FTC's mind about investigating it? Herbalife says it "welcomes the inquiry given the tremendous amount of misinformation in the marketplace," which is pretty much what you have to say.

What does Bill Ackman mean?

Here are some claims, including that "a complicated inversion has taken place in American life over the past two decades, in academia and business and now politics, in which the bold outsiders with an idea are the ones who win seats on corporate boards, invitations to Davos, political influence — the contrarians are the establishment." Also enjoyable:

Ackman is the kind of Establishment figure who, when he appears on Charlie Rose, Charlie introduces him by saying, "glad to have you back at this table," and who, when he is profiled by Vanity Fair, has his eyes described as "cerulean" (which I think means "blue").

Wells Fargo: maybe fabricating foreclosures?

I am not generally a fan of the magic-incantation theory of foreclosure, which holds that if banks were sloppy about documents then all their mortgages are invalid and everyone gets a free house. On the other hand, "Wells Fargo, the nation’s biggest mortgage servicer, appears to have set up detailed internal procedures to fabricate foreclosure papers on demand, according to allegations in papers filed Tuesday in a New York federal court," which isn't great either.

Poor Fab Tourre!

Literally? I find myself fascinated by Fab's finances. A judge ordered him to pay about $825,000 in penalties for doing a bit of securities fraud, and not seek reimbursement from Goldman. That will definitely cramp his lifestyle, but I guess other scapegoats have had it worse. Meanwhile the SEC actually said "The ruling reflects the SEC’s intent of pursuing meaningful sanctions to punish individuals responsible for misconduct and deter others from violating the federal securities laws," because the one individual responsible for Goldman Sachs's Abacus CDO program was poor Fab Tourre.

Poor Fab's successors!

The average Wall Street bonus, for what little that's worth, was $164,530 in 2013. It peaked in 2006 at $191,360. Fab did rather better than that, making $1.7 million in total comp in 2007.

Remember the TVIX?

The Credit Suisse exchange-traded note intended to return double the performance of the VIX volatility index, which "veered as much as 89 percent away from the index it was created to mimic" (on the upside! amusingly!), is now "back in fashion." Oh why?

“It could be people who are not familiar with the product’s history and see that two times VIX performance and get excited,” Todd Salamone, senior vice president of research at Schaeffer’s Investment Research, said via phone from Cincinnati.

So there is your market efficiency.

Would you like to buy a 100-year sterling-denominated Mexico bond?

"Lending money for a century comes with its own set of risks," and that seems hard to argue with. Those risks will cost Mexico around 5.75 percent a year.

To contact the writer of this article: Matt Levine at mlevine51@bloomberg.net.

To contact the editor responsible for this article: Tobin Harshaw at tharshaw@bloomberg.net.