Misery Economic Theater 2011

[wblipp]

Originally Posted by Fusion_power

Anyone want to speculate who will be next?
Who's on first?
no, Whats on first. Who's on second.

I don't know.

[schickel]

Originally Posted by wblipp

I don't know.

Third base!

[Christenson]

Originally Posted by cheesehead

Either of these?

http://www.investmentmoats.com/stock...near-to-burst/

http://arabnews.com/saudiarabia/article508532.ece

For the first, close -- the "housemaid indicator"
For the second, definitely not: This is the market for housemaids proper in arabia!

[wblipp]

Originally Posted by schickel

Third base!

Shheesh.

Look - the batter hits a grounder, the shortstop picks it up and throws to first base. What's the name of the guy that catches the ball?

[schickel]

Originally Posted by wblipp

Shheesh.

Look - the batter hits a grounder, the shortstop picks it up and throws to first base. What's the name of the guy that catches the ball?

Who.

[wblipp]

Originally Posted by schickel

Who.

BUZZZZ. Wrong Answer.

[R.D. Silverman]

Originally Posted by Fusion_power

We have a first today.
http://www.bbc.co.uk/news/15519124



Draw your own conclusions about the cause and effect involved here. You can bet they were leveraged to the hilt and that a ton of their "assets" stink to high heaven because they were chasing high rates of return.

Anyone want to speculate who will be next?


DarJones

MF was the first domino....

Here is the second:

http://www.cnn.com/2011/11/01/world/...html?hpt=hp_t1


I am betting that Greece defaults.

[R.D. Silverman]

Originally Posted by R.D. Silverman

MF was the first domino....

Here is the second:

http://www.cnn.com/2011/11/01/world/...html?hpt=hp_t1


I am betting that Greece defaults.

And the next domino: Sneaky accounting at MF:

http://money.cnn.com/2011/11/01/news...ptcy/index.htm

Who skimmed off the money?

[R.D. Silverman]

Originally Posted by R.D. Silverman

And the next domino: Sneaky accounting at MF:

http://money.cnn.com/2011/11/01/news...ptcy/index.htm

Who skimmed off the money?

More fallout:

http://money.cnn.com/2011/10/28/news...obal/index.htm


"A lot of firms are going to incur pain as a result of the European debt crisis," said Sean Egan, managing
director of Egan-Jones, the independent rating agency. "The problem is the transparency is far from acceptable."


And here, in a nutshell is what the OWS protests are about:

A quote from the cited article:

"But Egan said he wouldn't be surprised if buyers just tried to hire MF's talent rather than buying its troubled assets."


The senior managers after thoroughly fucking up still get to keep their high
paying jobs. At another company, of course, but they still keep their jobs.

[imwithid]

... or they get a Golden Parachute for poor decisions/losing shareholder value. Call it pay for perfunctory performance.

[ewmayer]

Mish has a nice news roundup on the fallout from MF Global, including the utter failure (again) of the NYFed to do its job at regulating the firm's risk taking:

Regulators Investigate MF Global for Missing Customer Money; MF Global Goes Bankrupt Before Making 1st Interest Payment; Corzine's Achievement Sheet

Jon Corzine’s risk appetite helped destroy his firm. It also provided an object lesson for Paul Volcker’s campaign against proprietary trading on Wall Street.

Nineteen months after former New Jersey Governor Corzine became chairman and chief executive officer, MF Global Holdings Ltd. (MF) yesterday filed for bankruptcy. Corzine’s decision to boost risk-taking, including a $6.3 billion wager with the firm’s own money on European government debt, triggered the collapse.

“In the wake of 2008, when we all should have learned a lesson, Jon Corzine told me himself that it was a relatively staid, not risk-oriented firm and he needed to ratchet up the risk,” William Cohan, author of “Money and Power: How Goldman Sachs Came to Rule the World,” said on Bloomberg Television. “Well, he does that and it blows up in his face and for the first time he can’t unwind the trade. Honestly I’m still shocked and it should not have happened.”

Corzine, 64, learned the strategy of making big trading bets during his 24 years at New York-based Goldman Sachs, which he ran from 1994 to 1999 before being forced out.

Regarding Mr. Cohan's quote: Why would anyone still be surprised? Did the supposed regulators learn anything from the 1987 computer-trading-gone-amok market crash? From the LTCM blowup? From the Japanese housing bubble and bust? From the DotCom implosion? Why would one believe they finally learned something from the 2008 financial crisis, when all they've done as a result is put taxpayers on the hook for the bailouts and losses and allowed risk to concentrate even more in the surviving firms? Heck, just a few weeks ago the (alleged) regulators, in this case the FDIC, allowed Bank of America to transfer some unknown (but likely huge) amount of derivatives from its Merrill Lynch unit (where they were not FDIC guaranteed) onto the book of its retail-banking operation, where the taxpayer is on the hook for losses if any of those bets blow up.

As Denninger notes, in this case the regulatory nonfeasance is especially glaring because MF was added to the fed's primary dealer list just last year. So here we have yet another big financial firm enjoying all the perks of primary-dealer status, but being run as a hugely overleveraged hedge fund, recklessly (and illegally) using client money to help fund its proprietary-trading gambling habit, and none of the regulators knew anything. The close ties of Corzine to Obama are also going to provide for some fun (this is froma July story linked n KD's post):

President Obama is desperately putting his Wall Street stock in an unlikely old buddy.

The beleaguered president has recruited former Goldman Sachs head honcho Jon Corzine to shore up re-election funds from the banking industry, which is furious over Obama's financial regulations.

Corzine, the former governor of New Jersey who was blasted out of office by Republican Chris Christie in 2009, has attended secret meetings with the president and has been working on Obama's 2012 campaign for months, The Post has learned.

The Democrat, who now leads Manhattan-based brokerage MF Global, has been tasked with scraping up the very little banking-industry support Obama can still get.