Sorry few links to other blogs tonight, I am badly behind, with packing to get out of town AND having to reorganize stuff for painters!
Pandas fly to Taiwan from China BBC
Government buildings emit more CO2 than all of Kenya Guardian
Blood from mosquito traps Finnish suspect AFP
Buffeted “quants” are still in demand Reuters
Foreign Automakers in the U.S. Cut Back New York Times
Regulator Let IndyMac Backdate Capital, Treasury Says Bloomberg (hat tip reader Steve). Which begs the question: who else has gotten a regulatory wink and nod in trying to put lipstick on piggy bank financials?
Insurance Deals Spread Pain of U.S. Defaults World-Wide Wall Street Journal. This story has gotten a little attention in the blogosphere, but perilous little (until now) in the MSM. Key section:
… synthetic-CDO deals are poised to trigger a massive transfer of wealth from investors such as Parkes to hedge funds and the trading units of big U.S. investment banks. By various estimates, the amount of money set to change hands could be anywhere from tens of billions to hundreds of billions of dollars.
What the story does mention that the products were marketed heavily overseas, what it does not mention is that the synthetic CDOs were typically against a large group of names, say 100. Payment was triggered if defaults exceeded a certain level. The lists contained names that sounded solid to foreigners, like Citigroup, GM, but were anything but. Some have alleged that the lists were deliberately seeded with famous names that had reasonable odds of failure.
Madoff investor warned its clients Financial Times. But they still put client money with Madoff and collected fees!
More retailers fighting for survival Indpendent
ZIRP and the exchange rate…and other macro variables Menzie Chinn, Econbrowser
Fool Him Twice: Jerome Fisher Long or Short Capital
Antidote du jour:
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If kawaii has positive natural selection value, a wallaby in a Hello Kitty t-shirt will be the last surviving mammal; otters have too much dignity to pay that kind of price.
Regulator Let IndyMac Backdate Capital, Treasury Says
Is Chuck Schumer likely to get the apology he’s owed -accused of being “responsible” and threatened with an investigation for the downfall of IndyMac?
No fan of Chuck’s but the attempt by officials to gag truth tellers by is intolerable.
What does this say about the secrecy of Paulson/TARP $trillions?
Re: Indy Mac
I believe it was Yves who provided the link, 6 or 7
months ago, to the chilling history of fraud at indy Mac, which goes back to 2001. If you haven’t read,
“My experience at Indy Mac”, you can google it and
learn how the former Chairman, a protege of Bronzillo
looted the place. Plus, it’s an entertaining read.
“the synthetic CDOs were typically against a large group of names, say 100. Payment was triggered if defaults exceeded a certain level. The lists contained names that sounded solid to foreigners, like Citigroup, GM, but were anything but. Some have alleged that the lists were deliberately seeded with famous names that had reasonable odds of failure.”
Hello Yves. This is reminiscent of the early, more simple, days of the derivatives markets. The classic story for introductory rate-swap presentations circa 1985 was that of Pan Am. Pan Am could borrow at much lower rates in places like Switzerland than in the USA, precisely because some people overseas just assumed they were an American national airline (appeared in 2001: Space Odyssey and all that, must be a good company), so Pan Am would issue debt in Swiss Francs and then the friendly bankers would help swap the money back to dollars and a tenor that suited.
Right from the beginning the OTC derivatives markets were geared to arbitrage ignorance. The polite term was “information advantage.”
Merry Christmas! We’ll do better next year.
totally off topic but where is that photo from? [koala]
Phyllis Molchatsky, a 61-year-old retiree from New City, New York, is seeking $1.7 million in damages from the agency. It is believed to be the first attempt by an investor to recover losses from the SEC.
http://uk.reuters.com/article/companyNewsMolt/idUKN2354355520081223?pageNumber=1&virtualBrandChannel=0
Suing the SEC now that would be interesting, failure to act, due diligence, culpable.
skippy
Looks like Bushies religus play pen pals are going to throuw him out of the pen now. Pat Robertson just cucked him under the bus.
Skippy
Rene-Thierry Magon de la Villehuchet, a founder of the hedge fund Access International Advisors, was found dead Tuesday
Yeah, so. Probably did us all a favor. Bernie. Do the right thing. Spill your guts then show some guts.
“graduating from elite financial engineering courses will end up writing computer programs that handle an ever greater share of market trading.”
Gee, let’s see. The investment banks are making 80 % of their nut through proprietary trading.
I wonder if they would steal from me, observing my account, tracking my trading orders, watching my margin vulnerability, using their mutual funds to move the market. No, surely not.
Let’s all invest in equities! Yeah
nakedcapitalism in its current format begs to be updated and refreshed; as it is, it is boring and stale! maybe it’s just XMAS burnout?
Yves,
Thanks for linking to the WSJ article on synthetic CDO’s which I almost missed. I got the same sick feeling reading it as when I realized how Bear Stearns was funding subprime mortgage vehicles through commercial paper being bought by money market funds.
If small Australian towns were unknowingly putting their cash on the wrong side of credit default swaps, and could lose 100% of their principal with default rates as low as 3-6% on pools populated by Lehman and GM, then we are looking at major problems.
I was a banker that helped Orange County, CA entities avoid/emerge from bankruptcy in the mid-90’s and that debacle seems almost quaint in comparison.
That sure is one cute koala.