“Of course,” I said, although the shock I still felt made my response to my older brother little more than a whisper. “Giotto Bernini ruled in a pre-transparent world as opposed to the efforts now being made because of Dodd-Frank and Volcker.”
“Okay...wait a minute here. Help me out. You know I’ve always left the Harvard level stuff to you two geniuses,” Clito said, his frown failing to hide his frustration at not being able to follow our reasoning.
“No worries, little brother,” I said ready to give him a quick overview in layman’s terms. “Dodd-Frank was a bill signed by President Ruvama in July 2010 to rein in highly fraudulent lending practices and high-risk trades on very complex derivatives and other securities.”
“These are the infamous trades like those that should have nailed the balls of big-time banks like JP Morgan Chase and ruined empires like Goldman Sachs and many others we haven’t uncovered yet. Basically, these bad trades are the reasons why Wall Street and our banking system were just about driven over a cliff in 2008,” Raulf added.
“But I still don’t get what that has to do with your father and his for-hire street urchin.”
“Part of the Dodd-Frank bill is the Volcker rule, named after the former Federal Reserve Chairman who proposed it. This rule sought to prevent banks, whose deposits are federally insured, from conducting trades using those funds for their own benefit,” I said, filling in more of Raulf’s story, having figured out where he was going with this.
“So, you mean the money that I put into my bank isn’t really mine anymore after I deposit it?” Clito asked, his red eyes damn near bulging out of their sockets.
“Something like that,” Raulf confirmed.
“Again, where does Giotto figure into this?”
“Have you heard of the London Whale?” Raulf asked.
“He’s some big trader based in London, right? He took huge positions in the derivative markets for JPMorgan Chase. He’s the reason they have bad trades worth around something like six billion dollars plus?” Clito asked, taking a deep breath and looking very proud of himself for his quick answer.
“Exactly. Well done, little brother,” I said, and then looked around again as if to make sure no one could hear what I was about to say next. “Uncle Bernini makes the London Whale look like a tadpole.”
“If legislation like President Ruvama’s Vocker Rule becomes reality, he stands to lose not just future deals with the banks he trades for, but faces huge claw-backs.”
“What do you mean by a claw-back?” Clito asked, his eyes ready to glaze over as we took him deeper into the financial circus with Uncle Bernini as ringmaster.
“Well...not only will he lose future deals, but he’ll also have to payback what he’s already made from these trades,” Raulf said, smiling for the first time during our conversation.
“Oh my God! That’s it!” Clito exclaimed, again with such force that he ended up coughing until enough air could make it down to his lungs.
“That’s what?” Raulf and I asked in unison.
“That’s why he chose Star Fish as his drag persona!”
“I’m not sure I’m following you,” Raulf said, and for the first time, he looked like the confused member of what was left of our family.
“If he’s bigger than the London Whale, then he’s the “Star” Fish!”
“Very good! But, in that case, he’s about to be harpooned or washed ashore. Take your pick,” I said.