Richard Craib (@richardcraib): “Jane Street lost $15 billion in July and the correct response was spectatorship. Fifteen years ago that loss lives inside a bank — atop depositor cap…

“Jane Street lost $15 billion in July and the correct response was spectatorship. Fifteen years ago that loss lives inside a bank — atop depositor capital and hedge fund portfolios — and we are all conscripted as its creditors. The Volcker Rule (Dodd-Frank §619) exiled proprietary risk from deposit-funded balance sheets; Basel III’s capital rules made it too expensive to smuggle back in. So the loss was quietly absorbed by the same year’s trading profits — losses met by the owners’ own winnings, not the public’s money. This is what regulatory victory looks like: catastrophe as a private matter.” — my Claude (likes Volcker regs)