The WSJ had as its lead story today the fall-out from the thug Lawsky's actions against Standard Chartered and it wasn't pretty reading. The Brits are screaming mad as well they should be and talks of retaliation are in the air. I would rather not be the CEO of a non-American bank these days as I would have no idea to whom to listen and in what manner the game is being played. There are far too many regulators and many are not professionals but rather political thugs looking to score quick points. In the not-too-distant-future look for legislation placing the regulation of all foreign banks in the hands of the Feds or the Federal Reserve. This being an election year and Cuomo and Lawsky being Democrats the Administration will give this one a pass but no matter which party wins in November, international pressures--and not just from Europe--will bring about the change in governance of which I am speaking. The State of New York, having been run for years by political hacks may have just killed the goose with the bright, shiny egg.
Now remember my writing at one point that if you wish to learn the intentions of this Administration simply read the New York Times on a daily basis where you will find in addition to "All the News That's Fit To Print' (in accordance with our political philosophy) what to expect from Washington. This morning, once again shilling for the Administration, the NYT let it be known that Mr. Corzine will probably skate on any criminal prosecution for his role in the MF Global disaster. No kidding. After having this thing slow-walked by his former partner, now regulator, Gary Gensler, treated to the astonishing--or so it would appear--actions of the Federal prosecutors who did not grant immunity to the company's treasury official who authorized the transfers without even asking for a proffer and not even being questioned in regard to his 10-K statements, Johnny-boy is happily trading his family money seemingly without a care in the world.
To say this stinks is an understatement but let us remember that Corzine was the no.1 fund raiser for The Leader and was the odds-on favorite to succeed The Suit in the second Obama administration if there is to be one. Probably the only good thing to come out of this may be the realization that the piece of garbage known as Sarbanes/Oxley isn't worth the paper on which it is printed. Keep in mind that if one signs a 10-K it makes no difference if a material misstatement of fact is deliberate or accidental; sign it and you're toast. It's a joke, can it and while one is at it perhaps the repeal of Dodd/Frank can be accomplished as well. This dual act of contrition may mark the finest moment in financial regulation since...hold on, I'll have to back to you tomorrow on that. Then again, the research may take a long time.
Showing posts with label Corzine. Show all posts
Showing posts with label Corzine. Show all posts
Thursday, August 16, 2012
Monday, July 23, 2012
UH-OH
Houston, we have a problem. Methinks folks are beginning to figure it out. Todaywas not a good day; it was a worse day than I suspect most people realize. Economic numbers over here continue to deteriorate; ditto for Euroland. The Troika is on it's way to Greece to tell them the till is empty and the bridge loan they were looking for to get them to the next bridge loan to get them to...oh, what's the difference, as I have said no one cares any more. Then there's Sr. Monti who was doing rather well until he saw fit to tell the world that he has a real problem with La Sigilia about whom everyone has forgotten and badda-bing the ten year goes to 6.50%. Politicians really should learn to keep their mouths shut especially when the problems of the island pale in comparison to the structural issues he must solve in the entire economy in order to make this thing work, and so far, try as he might, the 60 year imbedded bureaucracy of the Italian state has fought him at every turn. No matter perhaps, as it was pointed out last week Italy, with the lowest birth rate by far of any country in Euroland and perhaps the world, Italy might run out of Italians in 100 years. Problem solved. Perhaps a tax on any Italian male who continues to live with his mother after the age of 25 might work? It sure would bring in a bunch of money. Mario should consult with The Leader; he knows a lot about taxes.
As dicey as things are beginning to look in Italy, Spain is sliding closer to the brink and unfortunately those who just a week ago were rejoycing in a deal that would save the banking system and not impinge upon Spain's debt burden took a second look and figured out the point that this space has been trying to make that at the end of the day the credit extended to the banks becomes the obligation of the State if the banks cannot repay. As the funds are guaranteed to go right out the door a nano-second after they arrive, this is a real possibility. The ninnies who write about this stuff missed all of that and what they also missed is the fact that like the relationship between the Italian State and Sicily, Spain has its own autonomous states and regions to whom the State has financial obligations and who are broke. A couple of them rose last week from where they were hiding in plain sight and Badda-boom, the price of poker in Euroland just went up...to 7.53% in the ten year. Unsustainable.
Immediately, of course, increased cries for a Eurobond rose up once again. Memo to the town criers: NO BOD EE will buy the damn thing. Forget it and go away to think of something els...or better yet just go away. Would it work? In theory of course but I keep coming back to the Yogi-man: "In theory, theory and practice are the same; in practice they aint..." which I have been informed if the correct quote. Fortunately, here come the Olympics and all of Europe will be caught up in that and especially the Spanish whose soccer team will be trying to do what no other national side has ever done: win the World Cup, the European Cup and the Olympics back to back to back. Spectacles for the masses. Ave Caesar! Morituri te salutant! Round 2 of the Bond Holders vs. the Lions. Thumbs down for everyone. Tomorrow we see what else the geniuses have figured out.
_______________________________
Just when you think it has reached the highest level of stupidity, the New York Times out does itself in it's leading article today. Libor was the subject and the Times nearly (figuratively) wet it's pants in revealing the the Justice Department is all over the banks. More importantly, however, the Times excoriated The Suit and demanded that he recuse himself from any investigation conducted by the Treasury. The Times than suggeated that in the next Obama administration The Suit be replaced by Garl Gensler.
Now Mr. Gensler is a very smart guy...the youngest partner ever made by...you guessed it...Goldman Sachs. He is also the head of the Commodities Futures Trading Commission, best buddies with John Corzine of MF Global fame (who is still walking about as a free man) and the guy who missed the shenanagans at PFG Best and about whom it can be said (and has been) that some of his greatest successes at Goldie can be found under a rock.
The Times was on a roll. On the op-ed page Little Paulie has a completely nonsensical piece on global warming, but the star of the day was Gar Alperovitz of the University of Maryland. Briefly, his deal was banks are too big to be regulated so nationalize the banks...and let the government manage them! Now you can look ol' Gar up and you will find that there are a hell of a lot of people who not only don't like him, disagree with him and in a couple of case accuse him of fradulent scholaship. Who knows, but one thing you should know is that he is highly regarded by The Leader. Take this article seriously. It is a message from the Times as to this administration's thinking in phase 2. Scary.
As dicey as things are beginning to look in Italy, Spain is sliding closer to the brink and unfortunately those who just a week ago were rejoycing in a deal that would save the banking system and not impinge upon Spain's debt burden took a second look and figured out the point that this space has been trying to make that at the end of the day the credit extended to the banks becomes the obligation of the State if the banks cannot repay. As the funds are guaranteed to go right out the door a nano-second after they arrive, this is a real possibility. The ninnies who write about this stuff missed all of that and what they also missed is the fact that like the relationship between the Italian State and Sicily, Spain has its own autonomous states and regions to whom the State has financial obligations and who are broke. A couple of them rose last week from where they were hiding in plain sight and Badda-boom, the price of poker in Euroland just went up...to 7.53% in the ten year. Unsustainable.
Immediately, of course, increased cries for a Eurobond rose up once again. Memo to the town criers: NO BOD EE will buy the damn thing. Forget it and go away to think of something els...or better yet just go away. Would it work? In theory of course but I keep coming back to the Yogi-man: "In theory, theory and practice are the same; in practice they aint..." which I have been informed if the correct quote. Fortunately, here come the Olympics and all of Europe will be caught up in that and especially the Spanish whose soccer team will be trying to do what no other national side has ever done: win the World Cup, the European Cup and the Olympics back to back to back. Spectacles for the masses. Ave Caesar! Morituri te salutant! Round 2 of the Bond Holders vs. the Lions. Thumbs down for everyone. Tomorrow we see what else the geniuses have figured out.
_______________________________
Just when you think it has reached the highest level of stupidity, the New York Times out does itself in it's leading article today. Libor was the subject and the Times nearly (figuratively) wet it's pants in revealing the the Justice Department is all over the banks. More importantly, however, the Times excoriated The Suit and demanded that he recuse himself from any investigation conducted by the Treasury. The Times than suggeated that in the next Obama administration The Suit be replaced by Garl Gensler.
Now Mr. Gensler is a very smart guy...the youngest partner ever made by...you guessed it...Goldman Sachs. He is also the head of the Commodities Futures Trading Commission, best buddies with John Corzine of MF Global fame (who is still walking about as a free man) and the guy who missed the shenanagans at PFG Best and about whom it can be said (and has been) that some of his greatest successes at Goldie can be found under a rock.
The Times was on a roll. On the op-ed page Little Paulie has a completely nonsensical piece on global warming, but the star of the day was Gar Alperovitz of the University of Maryland. Briefly, his deal was banks are too big to be regulated so nationalize the banks...and let the government manage them! Now you can look ol' Gar up and you will find that there are a hell of a lot of people who not only don't like him, disagree with him and in a couple of case accuse him of fradulent scholaship. Who knows, but one thing you should know is that he is highly regarded by The Leader. Take this article seriously. It is a message from the Times as to this administration's thinking in phase 2. Scary.
Thursday, July 12, 2012
TIRED
Haven't written as much as I did yesterday in a long time. Flat wore me out but things were quiet today so I can goof off a bit.
The Bair of very little brain was at it again today on CNBC. Libor of course. Girl never misses a chance to be lastest with the leastest. According to her we are going to hear more of this; not c. 2008 but about the goings on in 2005...or thereabouts. Great. The system needs more bug-eyed anticipation of activities of seven years past assuming there is any evidence to be found at this stage of the game. I think she runs something call the Pew Trust about which I know nothing except that if she stays there for a while it will become known as the Phew Trust. Woman is hopeless.
Six hour cabinet meeting in Spain the other day. PM told the assembled that things might be a tad worse than he had led them to believe...well, perhaps even worse than that. Taxes would be raised, a goodly part of the banking system might be essentially run by Brussels, the cost of the bank recap is now around 125 billion (don't say I didn't tell you) and oh, Mr. Depositor, remember those "bonds" that your banker talked you into buying? Guess what? IT'S SUBORDINATED DEBT! You lose! Law suits all over; it looks like the U.S.A. , and now there is talk of a full fledged bail-out if things don't turn around quickly. Earth to Prime Minister: things are not going to turn around, so the riots outside the parliament yesterday? Get used to them, I'm afraid we are going to see more of them.
Another commodity-related firm tanked the other day under strange circumstances and missing a ton of customer funds while the head guy tried to off himself. Didn't do a good job of that either. Remember Gary Gensler the Democratic operative who was placed in charge of the CFTC and who, being such a genius and thoroughly knowledgeable of all things financial was going to preven these sorts of things from happening? Well, he's now O for 2 and his great buddy John Corzine is still walking around scot free. Over a billion dollars stolen and Poo Bair is worried about Libor. Some day I'll figure this all out but not today. I'm too tired.
The Bair of very little brain was at it again today on CNBC. Libor of course. Girl never misses a chance to be lastest with the leastest. According to her we are going to hear more of this; not c. 2008 but about the goings on in 2005...or thereabouts. Great. The system needs more bug-eyed anticipation of activities of seven years past assuming there is any evidence to be found at this stage of the game. I think she runs something call the Pew Trust about which I know nothing except that if she stays there for a while it will become known as the Phew Trust. Woman is hopeless.
Six hour cabinet meeting in Spain the other day. PM told the assembled that things might be a tad worse than he had led them to believe...well, perhaps even worse than that. Taxes would be raised, a goodly part of the banking system might be essentially run by Brussels, the cost of the bank recap is now around 125 billion (don't say I didn't tell you) and oh, Mr. Depositor, remember those "bonds" that your banker talked you into buying? Guess what? IT'S SUBORDINATED DEBT! You lose! Law suits all over; it looks like the U.S.A. , and now there is talk of a full fledged bail-out if things don't turn around quickly. Earth to Prime Minister: things are not going to turn around, so the riots outside the parliament yesterday? Get used to them, I'm afraid we are going to see more of them.
Another commodity-related firm tanked the other day under strange circumstances and missing a ton of customer funds while the head guy tried to off himself. Didn't do a good job of that either. Remember Gary Gensler the Democratic operative who was placed in charge of the CFTC and who, being such a genius and thoroughly knowledgeable of all things financial was going to preven these sorts of things from happening? Well, he's now O for 2 and his great buddy John Corzine is still walking around scot free. Over a billion dollars stolen and Poo Bair is worried about Libor. Some day I'll figure this all out but not today. I'm too tired.
Friday, March 2, 2012
THE LIKES OF WHAT?
Regular readers may well have formed the impression that I am not a particular fan of The Suit...Timothy Geither, the Secretary of the Treasury of the United States. I'm not, but not even inmy nightmares could I have dreamed up a more self-serving, nonsensical, historically innacurate and completely partisian piece of rubbish that The Suit served up today on the op ed page of the Wall Street Journal. It is a panderinhg piece for the implementation of possibly the worst piece of legislation in the past 25 years, the Dodd/Frank consumer reform and protection act--and that's saying something. If not implemented he warns we will have learned nothing and forgotten everything relating to our most recent financial crisis caused, when you get right down to the bottom line, a lack of adaquate regulation. Perhaps we should explore The Suits unique positioning over the years that allows him to make this claim.
The Leader and his water carriers love to blame most of what occurred on financial deregulation, implying that it was the Republican Party that pushed for it. True, but what is forgotten that the real champion of deregulation was Mr. Clinton's Treasury Secretary, Robert Rubin and the deregulatory act was signed not by Mr. Bush but by Mr. Clinton on 1999. Central to that effort especially in dealing with the Congress was Mr. Rubin and his off-side? Why, none other than The Suit, who was deregulating every step of the way. In the clubbie little world of Goldman Sachs alumni, it was Mr. Rubin who recommended that The Suit became President of the NY Fed to the then Chairman, a sitting Goldman partner, who steared the nomination through the Board and thereby put The Suit in the chair where he was responsible for the most powerful and important financial oversight institution in the world. In this role he failed miserably, not because of lack of resources or authority, but because of lack of interest, knowledge and leadership. Understand this: the Fed needed no legislation; if you were reviewed and under the control of the Fed and told to jump, the only answer was, "how high?" Oh sure, you could drop a dime or two and maybe get cut a bit of slack but in the end you did as you were told. Problem was no one was told to jump. As an aside, the present President, Billy the Dud is also an alumnus of Goldman but that's another story.
In regard to The Suit, even his admirers...and there are many...will admit that his management approach is bottom up; not one to put himself in a position to take the first bullet is our boy. He is a consenus builder and when his Rabbis like the way things are going he's not going to be the one that points out 40x leverage might not be great for the system. Oh no. In the article he points out that he had no authority over the Bear Sterns and Fanny and Freddies of this world which is true in a strict lega; sense but the appalling exposure of Bear and Lehman was well known and debated within the Fed because of the counterparties who WERE regulated by the Fed...and debated, and debated, and debated. Nothing emerged but silence. He blames the derivative market as well which played little or no role in the events leading to the collapse but were a major cause for concern after the fact. And his claim that Dodd/Frank is not complex? He is made to look the fool by the testimony of Bernanke this week who informed the Congress that after a year there is still no firm timetable for implementation.
Have we ever seen the likes of a Secretary of the Treasury like this one? All one can ask is honesty and competence and in this we have neither. This is a political water-carrier rather than the primus inter pares of financial leadership in the western world. One almost wishes that MF Global never happened; in Corzine one had a real leader: of course he almost caused Goldman to go broke in '97 with his Russian bet, destroyed New Jersey and bankrupted MF Global. He was the replacement: just remember I did say "almost."
-----------------------------------------------------------------
Nothing happened in Euroland today...certainly nothing good. Thursday is the day. Have a great weekend.
The Leader and his water carriers love to blame most of what occurred on financial deregulation, implying that it was the Republican Party that pushed for it. True, but what is forgotten that the real champion of deregulation was Mr. Clinton's Treasury Secretary, Robert Rubin and the deregulatory act was signed not by Mr. Bush but by Mr. Clinton on 1999. Central to that effort especially in dealing with the Congress was Mr. Rubin and his off-side? Why, none other than The Suit, who was deregulating every step of the way. In the clubbie little world of Goldman Sachs alumni, it was Mr. Rubin who recommended that The Suit became President of the NY Fed to the then Chairman, a sitting Goldman partner, who steared the nomination through the Board and thereby put The Suit in the chair where he was responsible for the most powerful and important financial oversight institution in the world. In this role he failed miserably, not because of lack of resources or authority, but because of lack of interest, knowledge and leadership. Understand this: the Fed needed no legislation; if you were reviewed and under the control of the Fed and told to jump, the only answer was, "how high?" Oh sure, you could drop a dime or two and maybe get cut a bit of slack but in the end you did as you were told. Problem was no one was told to jump. As an aside, the present President, Billy the Dud is also an alumnus of Goldman but that's another story.
In regard to The Suit, even his admirers...and there are many...will admit that his management approach is bottom up; not one to put himself in a position to take the first bullet is our boy. He is a consenus builder and when his Rabbis like the way things are going he's not going to be the one that points out 40x leverage might not be great for the system. Oh no. In the article he points out that he had no authority over the Bear Sterns and Fanny and Freddies of this world which is true in a strict lega; sense but the appalling exposure of Bear and Lehman was well known and debated within the Fed because of the counterparties who WERE regulated by the Fed...and debated, and debated, and debated. Nothing emerged but silence. He blames the derivative market as well which played little or no role in the events leading to the collapse but were a major cause for concern after the fact. And his claim that Dodd/Frank is not complex? He is made to look the fool by the testimony of Bernanke this week who informed the Congress that after a year there is still no firm timetable for implementation.
Have we ever seen the likes of a Secretary of the Treasury like this one? All one can ask is honesty and competence and in this we have neither. This is a political water-carrier rather than the primus inter pares of financial leadership in the western world. One almost wishes that MF Global never happened; in Corzine one had a real leader: of course he almost caused Goldman to go broke in '97 with his Russian bet, destroyed New Jersey and bankrupted MF Global. He was the replacement: just remember I did say "almost."
-----------------------------------------------------------------
Nothing happened in Euroland today...certainly nothing good. Thursday is the day. Have a great weekend.
Tuesday, December 13, 2011
CABLE!
...which for those of you who have been paying attention is the FX dealer's designation of the Pound Sterling stemming from the fact that the Pound was the first European currency to trade in real time in North America via the first Atlantic cable...the things you learn at this blog spot. Anyway, for a currency belonging to a trapped country it slaughtered the Euro today which traded at one brief point in the late morning in New York below 1.30. Didn't close much better. The more the market sees of what occured last Friday, the more it doesn't like the result. In fact the only people who seem to like it are the German exporters whose efficiency and professionalism are part of the overall problem. That, I don't think, is going to change.
Jon Corzine and a couple of his offsiders, one of whome came to MF Global after a stint as Gov. Corzine's chief of staff where he helped in the near fiscal destruction of the State of New Jersey, testified before Corzine's old buddies on the Senate Agriculture Committee. The result? "Hey, I'm real sorry but I don't know nuttin'." The denials were almost word for word. In the mean time $1.2 billion remains missing. There's another governmental panal that is scheduled to hold hearings in order to repeat the entire charade but hopefully when those are concluded the calls for public hangings will begin. Somebody has to do time for this. Disgraceful.
The Fed had it's last meeting before year end and other than saying that things were a bit better over here and just plain awful over there, said nothing. Receiving nary a hint of further action nor detecting the sound of printing presses beginning to turn, the stock market tanked. I suspect between now and the end of the year things are going to get ugly. There's nothing out there to inspire investors--certainly not me--then again I know nothing about and understand less about the stock market so I will simply shut up. There was, however, and interesting discussion this morning on CNBC regarding the future of Fed forecasting, transparency and targeting about which I suspect we shall here more especially as this is an election year. Suffice to say that part of the discussion boiled down to the position of the ever-pompous Steve Liseman demanding more transparancy and future guidance as to what the Fed was doing and would do and Simon Hobbs who suggested that perhaps opaqueness in regard to monetary policy may not be such a bad thing. Not to take sides at this point but central banks are really rather special institutions with a majesty about them. Sort of like the Supreme Court around which there is a now-rising clamor for televised proceedings (not going to happen). In my mind Salome could have simply walked out starkers and accomplished the same thing in less time but getting there using seven veils assured her place in history in a far different catagory than as a mere bimbo. Boy, if we could have a central banker that looked like Rita Hayworth.............just a thought.
Jon Corzine and a couple of his offsiders, one of whome came to MF Global after a stint as Gov. Corzine's chief of staff where he helped in the near fiscal destruction of the State of New Jersey, testified before Corzine's old buddies on the Senate Agriculture Committee. The result? "Hey, I'm real sorry but I don't know nuttin'." The denials were almost word for word. In the mean time $1.2 billion remains missing. There's another governmental panal that is scheduled to hold hearings in order to repeat the entire charade but hopefully when those are concluded the calls for public hangings will begin. Somebody has to do time for this. Disgraceful.
The Fed had it's last meeting before year end and other than saying that things were a bit better over here and just plain awful over there, said nothing. Receiving nary a hint of further action nor detecting the sound of printing presses beginning to turn, the stock market tanked. I suspect between now and the end of the year things are going to get ugly. There's nothing out there to inspire investors--certainly not me--then again I know nothing about and understand less about the stock market so I will simply shut up. There was, however, and interesting discussion this morning on CNBC regarding the future of Fed forecasting, transparency and targeting about which I suspect we shall here more especially as this is an election year. Suffice to say that part of the discussion boiled down to the position of the ever-pompous Steve Liseman demanding more transparancy and future guidance as to what the Fed was doing and would do and Simon Hobbs who suggested that perhaps opaqueness in regard to monetary policy may not be such a bad thing. Not to take sides at this point but central banks are really rather special institutions with a majesty about them. Sort of like the Supreme Court around which there is a now-rising clamor for televised proceedings (not going to happen). In my mind Salome could have simply walked out starkers and accomplished the same thing in less time but getting there using seven veils assured her place in history in a far different catagory than as a mere bimbo. Boy, if we could have a central banker that looked like Rita Hayworth.............just a thought.
Thursday, December 8, 2011
WRONG AGAIN
Corzine testified. I didn't think there was a chance, but there he was reading from a beautifully legally crafted 22 page statement the crux of which was:
1. I don't know what happened to the $1.2 billion in client funds.
2, I don't know where it is.
3. I had no intention of telling anyone to use the funds.
4. There may have been a misunderstanding when I said, "fix the problem."
5. I knew what the positions were but I never personally checked the numbers.
6. I feel awful.
IMHO all of it was crap but perhaps truth will out...then again, if this guy gets the same kid gloves treatment in the future as he received today in front of this committee it never will and I'm not just talking about comgressional oversight. It helps to be an ex governor and especially an ex-Senator and therefore a member of the club and, it sure doesn't hurt to be the largest donor and raiser of funds for the guy and the party in the White House. I have this terrible feeling that there is going to be a deal done with the rest of the industry that if the industry covers the losses substantially more favorable regulatory treatment will be recommended. Gee, sorry about what happened but everyones been made whole and do we really want to prosecute this fine, public servant? Corzine skates. Let's see if I'm right or wrong again.
Dinner is still going on according to My Man in Brussels. Super Mario disappointed every one today when he said that not only would there not be a howitzer but the bazooka was off the table for now. Markets tanked, but that was never in the cards in the first place. I think my scenario of the past couple of days is still a good one. Rather than just boring you will the same old stuff, let's wait until tomorrow to see if I'm right this time. I can't be wrong two days in a row...can I?
1. I don't know what happened to the $1.2 billion in client funds.
2, I don't know where it is.
3. I had no intention of telling anyone to use the funds.
4. There may have been a misunderstanding when I said, "fix the problem."
5. I knew what the positions were but I never personally checked the numbers.
6. I feel awful.
IMHO all of it was crap but perhaps truth will out...then again, if this guy gets the same kid gloves treatment in the future as he received today in front of this committee it never will and I'm not just talking about comgressional oversight. It helps to be an ex governor and especially an ex-Senator and therefore a member of the club and, it sure doesn't hurt to be the largest donor and raiser of funds for the guy and the party in the White House. I have this terrible feeling that there is going to be a deal done with the rest of the industry that if the industry covers the losses substantially more favorable regulatory treatment will be recommended. Gee, sorry about what happened but everyones been made whole and do we really want to prosecute this fine, public servant? Corzine skates. Let's see if I'm right or wrong again.
Dinner is still going on according to My Man in Brussels. Super Mario disappointed every one today when he said that not only would there not be a howitzer but the bazooka was off the table for now. Markets tanked, but that was never in the cards in the first place. I think my scenario of the past couple of days is still a good one. Rather than just boring you will the same old stuff, let's wait until tomorrow to see if I'm right this time. I can't be wrong two days in a row...can I?
Friday, December 2, 2011
WITH A WHIMPER
Which is the way the week ended except for the remarkable scene in the House of Representatives today where, as predicted, the MF GLOBAL affair took on a whole new dimention. With a large bi-partisian vote, the House Agricultural sub commitee issued a subpoena for Jon Corzine to appear before it on December 8. Now for the non-American readers and for those who are not political junkies--which is about 99% of you--the Congress has not subpoened a sitting or retired U.S. Senator in over 100 years; this is no small thing. When they turn on their own it's big. It is ironic as well that this action took place of the tenth anniversary of the bankruptcy of Enron, which led to Sarbanes-Oxley which was designed specifically to make transparent corporate balance sheets, which was written in part by Gary Gensler, who was the regulator for MF GLOBAL, whose accounting shenagans in the purchase of Euro debt led to its bankruptcy, whose...oh bother. This is going to be fun to watch.
Unfortunately, Corzine is supposed to testify on the same day as the big Euro-leaders pow-wow next which is not great timing for yours truly. I wonder if there's a finance bar in the neighborhood with 10 televisions carrying the important stuff of the day? I'll have to start searching. If there isn't I might start on...probably make a fortune. Anyway, next week is the week to watch beginning with the Nick and Angie show on Monday which should be a real crowd pleaser, moving on to the Group of 27 and concluding with the Corzine pinata on Capitol Hill. I can barely keep still. The betting window is now open on whether Jersey City Johnny takes the Fifth which means he avails himself of his Constitutional right not to testify. THAT would be a show-stopper. And since nothing else of importance went on today I'm going to rest up for next week with a Softly as I Leave You tip of the Fedora to Carter for being more and more creative as we travel along this long, long road.
See you next week.
Unfortunately, Corzine is supposed to testify on the same day as the big Euro-leaders pow-wow next which is not great timing for yours truly. I wonder if there's a finance bar in the neighborhood with 10 televisions carrying the important stuff of the day? I'll have to start searching. If there isn't I might start on...probably make a fortune. Anyway, next week is the week to watch beginning with the Nick and Angie show on Monday which should be a real crowd pleaser, moving on to the Group of 27 and concluding with the Corzine pinata on Capitol Hill. I can barely keep still. The betting window is now open on whether Jersey City Johnny takes the Fifth which means he avails himself of his Constitutional right not to testify. THAT would be a show-stopper. And since nothing else of importance went on today I'm going to rest up for next week with a Softly as I Leave You tip of the Fedora to Carter for being more and more creative as we travel along this long, long road.
See you next week.
Thursday, December 1, 2011
Queen?
Weird dude that Carter. I think he's playing with my head. If he threw a little Sinatra at me that would be fine. I'm cool with Irish poets. But Queen? I don't even know WHAT Queen is. Male? Female? Confused? Anyway, he's right about yesterday's events and for once we are in agreement. Nothing has really changed and Euroland continues to spiral down into an ever-deepening abyss, and yet...
I tried to ring Massimo today at all his usual haunts, ma, non che. The reason was I was listening to Mario Draghi today, speaking in rather good English to some Euro group (which must have enraged the Frenchies), and while I may be a bit too aware of existing, or for that matter non-existing nuances in speeches like this I couldn't help thinking back to what Massimo postulated a few weeks back that after an appropriate period of time and with the right political statements and moves, the ECB would be there for Italy in the end. To me it seemed that that was exactly what he was saying. He wants the Pols to exhaust all of their efforts and then--but only then--will he bend the rules. So I said to myself, "Self, you just may have hit this one right on the head." The Central Banks' move of yesterday can probably keep a lid on the Eurobanks until after the Heads of State meeting in a week or so and probably into next year and if those geniuses say the right things and take what steps they can, in comes Mario on his Chariot of Fire to save the continent. Just like Massimo predicted. Now I wouldn't go long on Euro sovereigns like Johnny Corzine in anticipation of this event occuring, but I think they are trying to design the game plan so it works out that way. Oh sure, the Germans are going to get their pound (or 454g) of fleisch but that's not much to give away as everybody will simply ignore it after they get by this mess. Or so the thinking goes and maybe Frau Merkel holds on to her job and M. Sarkozy gets re-elected...and maybe not. Enough of this for today.
The Senate today held hearings on L'Affair MF Global and the troops came loaded for bear. Problem was the bear decided he wasn't about to participate in the event. Gary Gensler, Head of the Commodities Trading Commission, decided to "recuse" himself from the proceedings and while he dodged and weaved in answering questions there can be little doubt that this Dodd/Frank mini monstrosity participated in a monumental failure of oversight along with the SEC whose boss, Mary Shapiro was at the same hearing. Mr. Gensler's recusal was because of his long association with John Corzine going back to his days at Goldman Sachs--that name AGAIN--and his friendship throughout the years duing which they were heavily involved in Democratic Party politics and hugh fund raisers for the cause. We'll get into the details of what occured at a later date but right now IMHO if one or more of this motley crew doesn't wind up in the slammer we might as well just fold our tents. I have a feeling that this is going to become a major event because of the political associations and the upcoming election as it should, with both sides of the aisle willing to dig very hard as no one will want to be on the wrong side of what more and more appears to be a fraud of major proportions. Unfortunately, MF Global had been granted earlier in the year the status of primary dealer by the New York Fed (that status being revoked as the affair was unfolding) and of course Bill Dudley the Fed's President was a colleague at Goldman Sachs as well. You know what that will mean; it's going to get ugly. So I suppose it's proper to ask: "Carter. Got any music for this one?"
I tried to ring Massimo today at all his usual haunts, ma, non che. The reason was I was listening to Mario Draghi today, speaking in rather good English to some Euro group (which must have enraged the Frenchies), and while I may be a bit too aware of existing, or for that matter non-existing nuances in speeches like this I couldn't help thinking back to what Massimo postulated a few weeks back that after an appropriate period of time and with the right political statements and moves, the ECB would be there for Italy in the end. To me it seemed that that was exactly what he was saying. He wants the Pols to exhaust all of their efforts and then--but only then--will he bend the rules. So I said to myself, "Self, you just may have hit this one right on the head." The Central Banks' move of yesterday can probably keep a lid on the Eurobanks until after the Heads of State meeting in a week or so and probably into next year and if those geniuses say the right things and take what steps they can, in comes Mario on his Chariot of Fire to save the continent. Just like Massimo predicted. Now I wouldn't go long on Euro sovereigns like Johnny Corzine in anticipation of this event occuring, but I think they are trying to design the game plan so it works out that way. Oh sure, the Germans are going to get their pound (or 454g) of fleisch but that's not much to give away as everybody will simply ignore it after they get by this mess. Or so the thinking goes and maybe Frau Merkel holds on to her job and M. Sarkozy gets re-elected...and maybe not. Enough of this for today.
The Senate today held hearings on L'Affair MF Global and the troops came loaded for bear. Problem was the bear decided he wasn't about to participate in the event. Gary Gensler, Head of the Commodities Trading Commission, decided to "recuse" himself from the proceedings and while he dodged and weaved in answering questions there can be little doubt that this Dodd/Frank mini monstrosity participated in a monumental failure of oversight along with the SEC whose boss, Mary Shapiro was at the same hearing. Mr. Gensler's recusal was because of his long association with John Corzine going back to his days at Goldman Sachs--that name AGAIN--and his friendship throughout the years duing which they were heavily involved in Democratic Party politics and hugh fund raisers for the cause. We'll get into the details of what occured at a later date but right now IMHO if one or more of this motley crew doesn't wind up in the slammer we might as well just fold our tents. I have a feeling that this is going to become a major event because of the political associations and the upcoming election as it should, with both sides of the aisle willing to dig very hard as no one will want to be on the wrong side of what more and more appears to be a fraud of major proportions. Unfortunately, MF Global had been granted earlier in the year the status of primary dealer by the New York Fed (that status being revoked as the affair was unfolding) and of course Bill Dudley the Fed's President was a colleague at Goldman Sachs as well. You know what that will mean; it's going to get ugly. So I suppose it's proper to ask: "Carter. Got any music for this one?"
Monday, November 21, 2011
SPANISH STEPS
As anticipated, the Spanish elections threw out the left-of-center government that has been running the country for 7 years and brought back the conservatives but with a greater margin of victory than was expected. What effect this will have on the finances of Euroland is anyone's guess but in the day after markets were down substantially all around the continent and on Wall Street as well. There is simply no good news out there and Europe dominates all markets will the nagging concern that with the short Thankgiving week on this side of the pond we might but caught out from Wednesday's close to next week. And speaking of "over here," the bankruptcy trustee for MF Global suggested that the amount of missing funds may be far greater than initially expected with the figure now considerably above $1.3 billion which surly means that this was no mere accounting mistake but a serious and deliberate fraud whose ramifications could well be immense. Hell of a way to start a week.
Aside from the obvious blame game, I wonder if anything useful can be learned from the disgraceful episode other than a call for more totally useless regulation to prevent a re-do of the already preventable and a public relations nighmare for the administration already in the process of running away from Corzine who, given many reports, was the odds-on favorite to replace The Suit at Treasury and a serious money man for The Leader. That part of it will be fun at least. What should come out of this IMHO is an understanding of what I've been saying all along: banks die on the liability side of their balance sheet. I'm will to bet some serious money--at least 10 bucks--that when the full story is finally know, it will be revealed that the intermingling of client funds was not a long term event but in response to the loss of funding close to the date of the failure of the firm.
You know, banking has been going on for quite a few years now and for the most part it hasn't changed very much. Oh sure, there are new products all the time but all are really variations on a theme and at the end of the day banks are intermediaries in bringing excess funds (deposits) to areas of needed liquidity through the medium of a loan. Whether that liquidity comes in the form of a loan, bond, swap or what have you, or by whom it is delivered is really unimportant. And yet this is the facet of banking that is the subject of practically all the interest--and regulation--be it on a wholesale of retail basis. Not to belabor the point (that's a lie), but we have lost sight of the truly important aspect of this business which is what is the nature and the source of that liquidity with which the bankers act in their disintermediary capacity?
In the good old days, banks would accept demand and time deposits from their liability clients and lend them to their asset clients. That deposit base as it was called was jealously guarded as it represented the life blood of the institution. Handled properly, that base was remarkably stable, often aided in the past by regulation, ostensibly designed to protect the depositor but having another role as well in that through the limiting of competition (interest caps) and protection mechanisms (FDIC insurance) had the effect of insuring the continuity of the deposit relationship. The system worked quite well and the bankers limited their extention of credit to cash flow lending which rarely had a final maturity of more than seven years and that term was a fairly recent development. Then things changed.
My late friend, Stanley, was fond of saying, "Banking is what bankers do." And so banking changed--as for the better is a topic that can be argued forever. Certainly the asset side of the business has changed dramatically especially as to the length and terms of exposures as well as the nature of the instruments in which bankers deal. But more importantly has been the change in the liability side of a bank's balance sheet, not in the nomiclature of what we find and surely there is that, but in the nature of the funding whereas the overall duration of the same has become incredibly short--so short that overnight purchased deposits regularly fund asset exposures of 10 years or more. Our entire system is a time bomb and when one is faced with the lack of confidence and credability such as occured in 2008 and such is occuring today, the bomb explodes either on a systemic or on an individual institutional basis. This is, I believe, is what happened with MF Global. What's the next step?
Aside from the obvious blame game, I wonder if anything useful can be learned from the disgraceful episode other than a call for more totally useless regulation to prevent a re-do of the already preventable and a public relations nighmare for the administration already in the process of running away from Corzine who, given many reports, was the odds-on favorite to replace The Suit at Treasury and a serious money man for The Leader. That part of it will be fun at least. What should come out of this IMHO is an understanding of what I've been saying all along: banks die on the liability side of their balance sheet. I'm will to bet some serious money--at least 10 bucks--that when the full story is finally know, it will be revealed that the intermingling of client funds was not a long term event but in response to the loss of funding close to the date of the failure of the firm.
You know, banking has been going on for quite a few years now and for the most part it hasn't changed very much. Oh sure, there are new products all the time but all are really variations on a theme and at the end of the day banks are intermediaries in bringing excess funds (deposits) to areas of needed liquidity through the medium of a loan. Whether that liquidity comes in the form of a loan, bond, swap or what have you, or by whom it is delivered is really unimportant. And yet this is the facet of banking that is the subject of practically all the interest--and regulation--be it on a wholesale of retail basis. Not to belabor the point (that's a lie), but we have lost sight of the truly important aspect of this business which is what is the nature and the source of that liquidity with which the bankers act in their disintermediary capacity?
In the good old days, banks would accept demand and time deposits from their liability clients and lend them to their asset clients. That deposit base as it was called was jealously guarded as it represented the life blood of the institution. Handled properly, that base was remarkably stable, often aided in the past by regulation, ostensibly designed to protect the depositor but having another role as well in that through the limiting of competition (interest caps) and protection mechanisms (FDIC insurance) had the effect of insuring the continuity of the deposit relationship. The system worked quite well and the bankers limited their extention of credit to cash flow lending which rarely had a final maturity of more than seven years and that term was a fairly recent development. Then things changed.
My late friend, Stanley, was fond of saying, "Banking is what bankers do." And so banking changed--as for the better is a topic that can be argued forever. Certainly the asset side of the business has changed dramatically especially as to the length and terms of exposures as well as the nature of the instruments in which bankers deal. But more importantly has been the change in the liability side of a bank's balance sheet, not in the nomiclature of what we find and surely there is that, but in the nature of the funding whereas the overall duration of the same has become incredibly short--so short that overnight purchased deposits regularly fund asset exposures of 10 years or more. Our entire system is a time bomb and when one is faced with the lack of confidence and credability such as occured in 2008 and such is occuring today, the bomb explodes either on a systemic or on an individual institutional basis. This is, I believe, is what happened with MF Global. What's the next step?
Tuesday, November 1, 2011
TIMING IS EVERYTHING
...and mine stinks. With what is shaping up to be a monumental week, we are off today on a 12 day holiday/grandchild sitting duties journey back east. Just to show you what I mean, take a look at was as occured over the weekend.
MF Global went toes up. Now for certain Jon Corzine is having such a bad run that I wouldn't stand within ten feet of the guy for fear that I catch what he has, but I find it interesting why the public thinks the firm failed. It appears back at the start of the year, ol' Jon, in an attempt to make a sleepy littly clearer look more like Goldie (who fired him, remember?) loaded up on Euro fixed income securities from the PIGS. Well, we all know what has transpired in Euroland and suddenly everybody got the idea all at the same time that fixed income wasn't the place to be and...well, you see the result. BUT, the funny thing is it wasn't a bad trade. MF bought the stuff at a deep discount and there it sits, a couple of points below where it was purchased to be sure but earning a nice tidy yield which was the point of the exercise. So why this reaction? You might remember what Charlie has told you: banks get sick on the asset side by die on the liability side. Confidence was lost in MF, funding disappeared overnight and bankruptcy was the result. It is always as such. Now it appears that there my be a question of misplacement (to be kind) of client funds but this was unknown and played no part in the collapse. What I would like to know is why the NY Fed pulled their Primary Dealership last week? Maybe someone will tell me.
Just to enforce the fact that it aint over til it's over in Europe, the Greek Prime Minister announced last night that he was putting the austerity plan which of course is the basis of the bail out package from the Euros to a referendum. Given that the polls show a 60%+ dissatisfaction with his governance, who knows what the result of this will be. Just goes to show that survival is the first instinct of any politician.
The G-20 is this week and the agenda used to be how much was Japan and China going to kick into the bail-out. Now it may well be is there going to be a Euroland because if the referendum goes the way I expect it to go that will become the question of the day. Of course The Leader will be present and perhaps he can give some advice on how you win a tough a tough vote in a place like Chicago--like adding Ghadafi and Bin Laden to the voter roles perhaps? To make matters worse, somebody came up with the bright idea today to overrule the Basel II rules on soverign debt in regard to capital requirements related to the percentage of asset represented by a single exposure to a sovereign which will certainly impact French banks in re Italy, leaving aside for a moment the Italians who are already hurting. Soc Gen crashed 15% as I started to write and was headed south. Italian fixed rate futures got murdered and like the great football coach everyone is screaming, "What the hell is going on out there?"
Anyway, that's what we are facing. I'm going to break a life-long rule and continue to comment through this period, perhaps not every day, but as much as I can. This is really too goodto let pass. I would hate myself if I did...then again, Trouble and Strife is going to hate me when I do.
Happy Landings
MF Global went toes up. Now for certain Jon Corzine is having such a bad run that I wouldn't stand within ten feet of the guy for fear that I catch what he has, but I find it interesting why the public thinks the firm failed. It appears back at the start of the year, ol' Jon, in an attempt to make a sleepy littly clearer look more like Goldie (who fired him, remember?) loaded up on Euro fixed income securities from the PIGS. Well, we all know what has transpired in Euroland and suddenly everybody got the idea all at the same time that fixed income wasn't the place to be and...well, you see the result. BUT, the funny thing is it wasn't a bad trade. MF bought the stuff at a deep discount and there it sits, a couple of points below where it was purchased to be sure but earning a nice tidy yield which was the point of the exercise. So why this reaction? You might remember what Charlie has told you: banks get sick on the asset side by die on the liability side. Confidence was lost in MF, funding disappeared overnight and bankruptcy was the result. It is always as such. Now it appears that there my be a question of misplacement (to be kind) of client funds but this was unknown and played no part in the collapse. What I would like to know is why the NY Fed pulled their Primary Dealership last week? Maybe someone will tell me.
Just to enforce the fact that it aint over til it's over in Europe, the Greek Prime Minister announced last night that he was putting the austerity plan which of course is the basis of the bail out package from the Euros to a referendum. Given that the polls show a 60%+ dissatisfaction with his governance, who knows what the result of this will be. Just goes to show that survival is the first instinct of any politician.
The G-20 is this week and the agenda used to be how much was Japan and China going to kick into the bail-out. Now it may well be is there going to be a Euroland because if the referendum goes the way I expect it to go that will become the question of the day. Of course The Leader will be present and perhaps he can give some advice on how you win a tough a tough vote in a place like Chicago--like adding Ghadafi and Bin Laden to the voter roles perhaps? To make matters worse, somebody came up with the bright idea today to overrule the Basel II rules on soverign debt in regard to capital requirements related to the percentage of asset represented by a single exposure to a sovereign which will certainly impact French banks in re Italy, leaving aside for a moment the Italians who are already hurting. Soc Gen crashed 15% as I started to write and was headed south. Italian fixed rate futures got murdered and like the great football coach everyone is screaming, "What the hell is going on out there?"
Anyway, that's what we are facing. I'm going to break a life-long rule and continue to comment through this period, perhaps not every day, but as much as I can. This is really too goodto let pass. I would hate myself if I did...then again, Trouble and Strife is going to hate me when I do.
Happy Landings
Thursday, August 4, 2011
SEE EUROPE YET, JAMIE?
Remember when Jamie Dimon said Europe is for the Europeans or something like that? Wonder how that trade is working out for the World's Greatest Banker. Dreadful public statement this morning from the head of the Commission and Jean Claude Trichet (who should know better) started the whole thing off. If you don't have something positive to say, just shut up but these guys haven't learned that yet. Further, Frau Merkel had better start being consistant in her policy statements to her European colleagues and her voters: either she's prepared to tell both that Germany, for the foreseeable future is going to own Europe or she isn't. She has very little time left because this thing is headed south without a clear and unambiguous statement of support. Once again, it's all about confidence and at this stage there is no confidence in European political leadership.
Unfortunately, not much is better over here although with all the talk of the past few weeks concerning the default of the United States, the flow of money into Treasuries today at every maturity was stunning with the short bills actually producing a negative return for a brief period. The Bank of New York actually told major depositors that they were going to start charging for deposits. Can you imagine? A bank that doesn't want money? Sounds positively Swiss to me. Of course the stock market, following the lead of Europe absolutely tanked with the DOW down over 500 at the close. Tomorrow's job number has every chance of being awful again so God knows in what that will result. There is real talk of a double dip, the chance for QE III was put at 75% by one talking head economist today and the realization is finally sinking in that the administration has no strategy, no plan and no clue other than The Leader's re-election.
The one bright note was the increasing jabber about The Suit wanting out (wouldn't you?) but that was immediately followed by the suggestion that Jon Corzine, forner head of Goldie and Destroyer of New Jersey wants the job and if not him then the afor-mentioned Jamie Diamon (I doubt it) or Jeff Emmelt of GE, known among the holders of the stock as Jeff Melt-Down. Erskine Bowles name has popped and I know of a few people whose opinions I respect that have said that the guy is terrific--if so, I ask, why would he want to be part of this administration?
Look, there's really not much I can add to this truly awful situation that you haven't already figured out. There is no confidence out here in the fly-over zone and I suspect that's the same where you live. I'm going to wait for the number tomorrow and see what that brings and then see if anyone has a sense of how and to where we move forward. Remember, it's August. I don't like August.
Unfortunately, not much is better over here although with all the talk of the past few weeks concerning the default of the United States, the flow of money into Treasuries today at every maturity was stunning with the short bills actually producing a negative return for a brief period. The Bank of New York actually told major depositors that they were going to start charging for deposits. Can you imagine? A bank that doesn't want money? Sounds positively Swiss to me. Of course the stock market, following the lead of Europe absolutely tanked with the DOW down over 500 at the close. Tomorrow's job number has every chance of being awful again so God knows in what that will result. There is real talk of a double dip, the chance for QE III was put at 75% by one talking head economist today and the realization is finally sinking in that the administration has no strategy, no plan and no clue other than The Leader's re-election.
The one bright note was the increasing jabber about The Suit wanting out (wouldn't you?) but that was immediately followed by the suggestion that Jon Corzine, forner head of Goldie and Destroyer of New Jersey wants the job and if not him then the afor-mentioned Jamie Diamon (I doubt it) or Jeff Emmelt of GE, known among the holders of the stock as Jeff Melt-Down. Erskine Bowles name has popped and I know of a few people whose opinions I respect that have said that the guy is terrific--if so, I ask, why would he want to be part of this administration?
Look, there's really not much I can add to this truly awful situation that you haven't already figured out. There is no confidence out here in the fly-over zone and I suspect that's the same where you live. I'm going to wait for the number tomorrow and see what that brings and then see if anyone has a sense of how and to where we move forward. Remember, it's August. I don't like August.
Monday, June 29, 2009
A STAND UP GUY AND OTHER MUSINGS
Bernie caught 150 years today. The max. But right to the end Bernie was a stand up guy. He didn't roll over on anybody to the point where some people are beginning to suggest that maybe--just maybe--he pulled this off all by himself. Forgive me if I don't believe that it would have been possible. The saga is of course far from over and it will be fascinating to watch what is revealed and argued in the coming months. Way back in the last century I took the New York State Bar exam. On it there was a essay question (there were 12 in those days) on bankruptcy and the jurisdictional issues posed by the facts in the case as between two Federal Districts. No one with whom I spoke after the exam knew what the hell was going on. Amazingly, they through the entire question out grading only the remaining eleven. That's why I passed; that's why most of my friends passed. This mess has more issues than that question. What goes 'round...but if you think there are regulatory issues involving banking how 'bout the SEC in this one? As the kids would say, "Like, DUH!" Back in the Great Depression, FDR hired Joe Kennedy as the first SEC commissioner. He rational was that it was best to send a crook to catch a crook. Wise. The Leader, who seems to be channeling up FDR at every turn should perhaps take heed.
Missed in all of the deaths and sentencing over the last few days was the restatement of the Chinese position that the world needs a new reserve currency to replace the dollar. With more force and conviction this time SDR's were brought to the fore. Now there are a bunch of really smart guys out there that keep saying don't worry, the Chinese will still hold the Dollar because they have no alternative. Then again, the Chinese have never been a bunch for idle chatter. Most statements by that government are for a purpose although, admittedly, opaque at times. I can't seem to get over this great uneasy feeling that they are telling us something and we are not listening. I don't like it, I really don't
In a few days, we will find out how the banks did in the second quarter. We already know about Goldman; gangbusters. As stated here, if you're a trading institution with a big capital markets business with this kind of a yield curve your organs could be in the midst of being harvested and you could still make money. I don't know how they do it, I really don't. Oh, I don't mean how they make money, that's easy. A few years back, some wag asked Bill Gates who was his greatest competition. His answer? Goldman Sachs. Remember, pay peanuts, you get monkeys. Pay over the top? You get really smart people. That's how they make money. No, what I'm talking about is how do they come up smelling like a rose every time they fall in poo-poo. The got the outrageous bail-out in AIG even when they were prancing about claiming that they were fully hedged and in 1997, who had the opportunity to front-run Long Term Capital Management? Why none other than Goldie again whose then-Chairman John Corzine was the overseer of the wind down of LTCN's positions. Chinese wall? Sure. And I have a bridge for sale. Smell a bit of rot, Horatio? I do.
Finally, no sooner does your humble scribe point out that banks' balance sheets tend to look a bit different in the middle of a reporting period than at the end of one, comes Scott Patterson in last Thursday's WSJ in his "Ahead of the Tape" column pointing out the same thing. His solution? Quoting Lou Crandall, chief Economist of Wrightson ICAP, Scottso thinks that all banks should report a daily average balance ; I assume he wishes to add "sheet" to his idea. I've always felt that one of the best definitions for "mixed emotions" was watching a bus load of economists going over a cliff and realizing that there are three empty seats. Daily reporting? Think about it.
Missed in all of the deaths and sentencing over the last few days was the restatement of the Chinese position that the world needs a new reserve currency to replace the dollar. With more force and conviction this time SDR's were brought to the fore. Now there are a bunch of really smart guys out there that keep saying don't worry, the Chinese will still hold the Dollar because they have no alternative. Then again, the Chinese have never been a bunch for idle chatter. Most statements by that government are for a purpose although, admittedly, opaque at times. I can't seem to get over this great uneasy feeling that they are telling us something and we are not listening. I don't like it, I really don't
In a few days, we will find out how the banks did in the second quarter. We already know about Goldman; gangbusters. As stated here, if you're a trading institution with a big capital markets business with this kind of a yield curve your organs could be in the midst of being harvested and you could still make money. I don't know how they do it, I really don't. Oh, I don't mean how they make money, that's easy. A few years back, some wag asked Bill Gates who was his greatest competition. His answer? Goldman Sachs. Remember, pay peanuts, you get monkeys. Pay over the top? You get really smart people. That's how they make money. No, what I'm talking about is how do they come up smelling like a rose every time they fall in poo-poo. The got the outrageous bail-out in AIG even when they were prancing about claiming that they were fully hedged and in 1997, who had the opportunity to front-run Long Term Capital Management? Why none other than Goldie again whose then-Chairman John Corzine was the overseer of the wind down of LTCN's positions. Chinese wall? Sure. And I have a bridge for sale. Smell a bit of rot, Horatio? I do.
Finally, no sooner does your humble scribe point out that banks' balance sheets tend to look a bit different in the middle of a reporting period than at the end of one, comes Scott Patterson in last Thursday's WSJ in his "Ahead of the Tape" column pointing out the same thing. His solution? Quoting Lou Crandall, chief Economist of Wrightson ICAP, Scottso thinks that all banks should report a daily average balance ; I assume he wishes to add "sheet" to his idea. I've always felt that one of the best definitions for "mixed emotions" was watching a bus load of economists going over a cliff and realizing that there are three empty seats. Daily reporting? Think about it.
Subscribe to:
Posts (Atom)