Friday, July 24, 2015


Summer.  July has been beautiful in the fly-over least in the northern part.  South of here has seen enough rain to end California's drought.  Big, diverse country.  Our European friends often forget how remarkable this place is, in some cases through no cause of our own.

Nothing much is happening on the domestic horizon what with the congress for the most part not around and those who are are consumed by Iran and Il Duce's "Peace in Our Time" deal.  The "Volker Rule" went live yesterday and there was nary a blip on the screen with most institutions having re-jiggered themselves in anticipation of whatever it would require, which by the by, is still not fully understood.  Iw as looking t some statistics the other day on staffing levels and it is quite remarkable how the head count has fallen at the large institutions engaged in capital market activities.  By the same token, it is believed that since 2009, more than 1000 new hedge funds have been created.  Yep, boys and girls they're out there doing goodness know what by staffed to a great extent by the people who used to do the same things at JPM and Citi and Stanley Morgan that the Feds have told them they can't do any least not there.  Of course, being private, they are probably geared up to 30-1 but that's OK because there is no public money at risk...yeah, right.

I called Mad Max this morning to try to get a feel as to what was happening is anything.  He called back from Somewhere in the Hamptons; said he hadn't looked at a screen all week which I know is not true but I got the impression from him as well that there wasn't much happening.  He actually asked me where Greece stood, having lost all interest in the place after the headlines stopped.  He is a bit nervous about China but to him that's an equity problem and anybody who's into "that place" as he calls it is nuts anyway and deserves what they get.  How about their newly-opened bond market?  A snort of derision.   One thing that troubled him was their sale of Treasuries...or so he thinks.  Asked me what I thought it meant.  Raising liquidity(?) was the response.  He called me a bad word and rang off.  No help from Max.

There are a lot of people in the Hamptons I guess.  Equities sold off again today; nothing earth shaking, just a steady, throughout the day decline.  The DOW has been doing a lot of that lately, as though there aren't many people around and no one has any clear view.  And speaking of no clear view, although the Euros announced that a delegation would soon go to Greece to begin new bail-out talks, the IMF also reiterated that it wasn't sure it would participate.  Something about debt forgiveness would have to be on the table which makes things awkward because

1.  The Euros have stated that they will not engage in anything unless the Fund is present, and
2.  Debt forgiveness is a non-starter.

If I were the Greeks, I'd just step back and watch.  What the heck, nobody owes them money, right?
Now this could really get to be fun as that the Greeks owe a bundle early in August and everyone knows that no self-respecting European beaurocrat is going to do a stitch of work in August.  It is the stuff of the fall of nations.  But suppose...just could do both?  A common venue?  Max could rent out his place in the Hamptons or He Who Knows All Things could make a packet on his joint on the Jersey Shore.  Throw in Snookie and it's easy street.

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