Brent Nyitray
Fairlington Blade
Let the mutherfuker burn!
jnc4p
Kevin S. Willis
Michigoose
lmsinca
markinaustin
Arcanaut
novahockey
quarterback
ScottC
yellojktVital Statistics:
| Last | Change | Percent | |
| S&P Futures | 1254.1 | -9.9 | -0.78% |
| Eurostoxx Index | 2331.6 | -13.340 | -0.57% |
| Oil (WTI) | 100.36 | -0.130 | -0.13% |
| US Dollar Index (DXY) | 78.544 | 0.125 | 0.16% |
| 10 Year Govt Bond Yield | 2.05% | 0.02% |
European Central Bank President Mario Draghi has shown the markets his bazooka and they yawned. The ECB cut interest rates by 25 basis points and then further announced they would offer banks 3 year loans and relax collateral requirements. This is an extension from the one year loans currently being offered; the market had expected an extension to 2 years.
Initial Jobless Claims came in lower than expected – 381k vs 295k expected. Continuing Claims were 3.58million vs. 3.7 million expected. This print approaches the post crisis low of 375 set in Feb 2011. Just another sign that the labor market is beginning to thaw.
Jon Corzine will be in front of Congress this morning to address the MF Global fiasco. In his prepared statements, he claims he has no idea where the money was and wasn’t involved in the day-to-day movement of capital at the firm. He doesn’t understand why the accounts haven’t been reconciled yet. The Kenny Lay defense, I guess. I would bet the missing money went to cover margin calls. If so, the money should be recoverable – technically it wasn’t MF Global’s money to give. Find out who made the margin call and you will know who is about to make an earnings pre-announcement.
Bloomberg released some of the findings from its Bloomberg Global Poll this morning. 61% of the respondents (mainly professional investors) believe China will face a banking crisis within the next 5 years. It will be interesting to see how the “world’s best managed economy” behaves once the bubble bursts. I am sure the Thomas Friedmans of the world will not abandon their fixation that the government can fine-tune the economy and manage it intelligently.
Chart: Initial Jobless Claims:
Filed under: Uncategorized |
All Things in Moderation 
" If so, the money should be recoverable – technically it wasn't MF Global's money to give. Find out who made the margin call and you will know who is about to make an earnings pre-announcement."Can you explain further? Suppose Wells Fargo made a margin call on MF and MF paid it with investor money – are you saying Wells Fargo would have to pay it back?Help.
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OT from yesterday: not that this is breaking any ground, but the word from some colleagues more tapped into FDA confirms than me is that the decision on Plan B was purely political. The calculation being that this will appeal to some swing voters that Obama needs to hold — not just religiously motivated ones either. Those pushing for looser restrictions are in the bag already. What are they going to do? stay home? vote GOP? Easy call on this one.
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@Mark, I am guessing that Wells Fargo would have to pay it back. If I was a large customer of MF Global, I would certainly make the argument that MF had no right to take my money to pay Wells and that Wells should have to give it back. I am not a lawyer, and I don't know the precedent here, but it seems to me a reasonable argument.
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"" If so, the money should be recoverable – technically it wasn't MF Global's money to give. Find out who made the margin call and you will know who is about to make an earnings pre-announcement."Can you explain further? Suppose Wells Fargo made a margin call on MF and MF paid it with investor money – are you saying Wells Fargo would have to pay it back?Help. "I believe the fact that they are in bankruptcy gives the bankruptcy court the power to do claw backs (see Bernie Madoff) to ensure that there is no preferential creditor treatment and that things like paying out money held in trust (i.e. client accounts) for the expenses of the debtor was not done.
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Regarding Corzine and the Ken Lay defense:I've met a number of mega-corporation presidents/CEOs. Given the complexity of most billion-dollar-plus corporations, it isn't feasible for them to keep up on top of everything.That said, the ones I've met tend to focus on stuff they understand and trust the stuff they don't to chosen underlings. And they cross their fingers and assume stuff is running normally. Corzine sounds like one of those. But the good ones put measurements in place that allow them to keep tabs on pretty much everything. It's a lot harder than it looks, but necessary.
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Regarding Ken Lay: I really enjoyed Smartest Guys in The Room, the book, and one thing I took from it that Ken Lay had no idea what was going on, except in the broadest sense, but was responsible for the companies total focus on stock price (if I recall correctly, stock tickers displaying Enron's real time stock price were everywhere, including in the elevators). Corzine, unlike Lay, had previously spoken out in very specific terms against exactly the sort of risky management his company was involved in . . . so I'm not sure ignorance is a great defense.
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Brent and jnc, thanx. JNC, yes, a bkcy court will do that – for preferences. But this situation might not fit.Brent, I will try to find some applicable law if I have a chance.
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Kevin, pointing out the flaws of others is boatloads easier than avoiding them oneself.I speak from much experience. 😦
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MsJS: "And I haven't the slightest doubt that many of our politicians, corporate CEOs and police chiefs style themselves as benign dictators. It goes with the ego thing."Indeed! Still, it makes the ignorance defense more difficult because those specific words will be brought up against you, again and again. Not that the Ken Lay defense was ultimately successful for Ken Lay, but I'm suspecting Corzine is going to find it even less successful.
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Oh I agree, Kevin. I am surprised Corzine's even trying the ignorance route. Makes me wonder whether he has any other semi-plausible defense strategy available. It's like Blagojevich's scrape-the-bottom-of-the-barrel pleas for leniency of the past two days. He had nothing of substance to offer the judge and it showed.
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Shocking headline of the day: "Jon Corzine: MF Global's Failure Was Not My Fault" http://www.cnbc.com/id/45597426 Last time he was caught literally in bed with the head of the public workers union. God I hope Gary Gensler proves to have been completely straight!
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Blagojevich should be put in the stocks and the good people of Illinois should throw rotting fruit at him for the next 14 years. or at least a couple hours a day for the next 14 years. public corruption deserves more than simple prison time.
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"Shocking headline of the day:"Jon Corzine: MF Global's Failure Was Not My Fault" "Actually no, the shocking part is:"In his prepared statement, Corzine said that many people in his situation would invoke their Fifth Amendment right to remain silent. However, as a former senator, Corzine said, he recognizes the importance of congressional oversight and believes “it is appropriate that I attempt to respond to your inquiries.”"I actually expected him to take the fifth. I will give him credit for not doing so.
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"public corruption deserves more than simple prison time. "What part of the Illinois state government do you view as not corrupt?
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jnc:I am now being censored out of PL. I suppose this day had to come. Wonder what took it so long. LOL
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John, I expected hoots over there when I wrote "There is nothing at stake whatsoever in extending the 2% tax cut. It is a pander."Surprisingly it got 4 recommendations and no comments. You, JNC, and who else?
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"Regarding Corzine and the Ken Lay defense:I've met a number of mega-corporation presidents/CEOs. Given the complexity of most billion-dollar-plus corporations, it isn't feasible for them to keep up on top of everything.That said, the ones I've met tend to focus on stuff they understand and trust the stuff they don't to chosen underlings. And they cross their fingers and assume stuff is running normally. Corzine sounds like one of those.But the good ones put measurements in place that allow them to keep tabs on pretty much everything. It's a lot harder than it looks, but necessary. "Corizine is worse than that. He specifically set out to change MF Global from a "boring" derivatives broker to something more like Goldman Sachs which he used to run. He took over in March, 2010 and managed to have it in bankruptcy in less than two years."Soon after joining the firm, he moved to transform the sleepy brokerage firm into a full-service investment bank in the mold of his former employer, Goldman. He aggressively bought up European sovereign debt, wagering that the Continent would not let troubled countries default on their loans."Corzine Resigns From MF Global
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"jnc:I am now being censored out of PL. I suppose this day had to come. Wonder what took it so long. LOL "I believe the site is hosed up again today. Never assume malfeasance when incompetence will suffice as an explanation.
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Forgot the linkHanlon's Razor
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"What part of the Illinois state government do you view as not corrupt"Good catch
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jnc:I would agree, excpet that at least one reply was posted to my comment before it disappeared, and the same goes for a very long discussion I had with the three amigos last night. LOL
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Mark:Someone removed their sense of humor.
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jnc:thanks for the attempt at help over there, but they just don't get it.
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You two are pilgrims in a unholy land.
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It's really my fault. I sometimes reach the point where I get too "inside baseball" for the audience. When I post over here, I know people will get what I'm saying, whether or not they agree. That's why I try not to use Bloomberg pieces too much. Their people are a cut above the usual financial journalists, so they write for their peers, not the general audience.I think that is the REAL explanation for the brouhaha over the Fed numbers. Bloomberg was simply too sophisticated for the general public.
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Been watching Corzine live on Bloomberg TV. Using the "I only know what I read in the papers" defense regarding missing funds. He is being treated with surprising respect. Still one of the boys, I guess.
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"I think that is the REAL explanation for the brouhaha over the Fed numbers. Bloomberg was simply too sophisticated for the general public."No, they were getting attention and a headline as well. Bloomberg was precise enough in the details to be accurate, but their presentation was designed to showcase a big number, larger than any previously discussed, to get attention. I'm fine with that as long as they have their facts and details straight, but then I also appreciate a good Matt Taibbi headline as well:Federal Judge Pimp-Slaps the SEC Over Citigroup Settlement
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"He is being treated with surprising respect. Still one of the boys, I guess. "They are so used to everyone pleading the fifth.
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""What part of the Illinois state government do you view as not corrupt"Good catch "I almost took issue with this phrase as well: "the good people of Illinois"If only the "good people" could throw rotting fruit at him, he was pretty safe.I tend to believe that in a democracy/republic, the people get the government they deserve.
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MsJS: The Blagojevich defense: "I didn't think I'd get caught!" Then, the plea for leniency: "I'm really sorry you caught me!"
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PL: Not only do many of the commenters, especially the most critical ones, don't get, but the interface stinks and the tech group there is completely unresponsive. I think it many ways that's the bigger problem.
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kevin:I dunno, it was a big problem last night when I got exasperated enough at Expatriate's constant slams at me to call him a psuedo Marxist pretend rabble rouser who in reality speculates in gold and real estate while also employing house servants.That's was wrong of me, because he has only ever admitted to employing one servant.
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john:Long bond just broke through 3%. 2.995% right now.
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scott:None of this makes sense. The two best fear indicators I use, the VIX and the TED spread, aren't showing anything like the possibility of a dramatic breakdown in Europe that you would expect. The VIX isn't even as high as it was at the end of November, while the TED has been rising steadily, with no panic move. So either this market is going to get hit with a Triangle Shirtwaist Fire moment very soon, within a few days, OR there are iinsiders who know something we don't. Being a consipracy person at heart (and also an invested one) I am hoping for the latter!
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"reality speculates in gold and real estate while also employing house servants"sounds like a libertarian to me. but i do prefer the term valet to servant. now where did I leave my top hat.
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nova:It's laying on the table where Ginger Rogers is sitting.
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Cigarette me, big boy
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sorry, I'm a one percenter. You have to buy them yourself.
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john:Another interesting thing to note…LIBOR did not go up today for the first time in months. Lull before the credit storm arrives, or is it all going to be OK?
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NoVA:Cigarette me, big boyThat does sound like something cao would say.
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scott:This might be the point in "The Perfect Storm" when the sun comes out for a moment and Clooney and Wahlberg share a passionate kiss before the clouds close in again. In this version Bernanke and Geithner
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"in this version Bernanke and Geithner"*barf*
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For those who don't go to the Plum Line anymore you are missing some real gems such as "Healthcare should not be market driven for there is no cost control where PROFIT is the motive."
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jnc4p — I was reading your work over there. I can't bring myself to comment. but i did want to add "Obama/Unmanned Drone '12" to Liam's Committee to Re-Elect the President post. just to throw a turd in the punchbowl.
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"US State Tax Revenues Return to Pre-Recession Levels" http://www.cnbc.com/id/45601632 More good news along with initial jobless claims this morning. If we could just get past the infernal Eurogeddon moment, Obama would be sitting in the catbird seat by spring.Yes, I will vote for him over Newt. what sane person would do otherwise? LOL
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"jnc4p — I was reading your work over there. I can't bring myself to comment."We all know that for profit businesses never try to control costs. It might result in something like increasing their profits.
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Good afternoon, all.My father, whom I occasionally referred to over at WaPo as PaterJS, passed away this afternoon. His wife and he were in the car, she driving, and he slumped over and stopped breathing.He was 87. Except for always maintaining a decent body weight, he avoided every good health maxim known to modern medicine. His happiest years were the most recent. We should all be so fortunate.
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msjs:Condolences from all of us!
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I'm so sorry for your loss msjs. Sounds like he had a great life. I remember when you asked to wait until he passed to share his diary, that was just on Veteran's Day. I wouldn't mind seeing 87 someday. Best wishes from me.
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MsJS – my condolences, too. After the obit is published, would you please link to it?Not right away, of course, but in some time frame that is comfortable to you.
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KEVIN – I added to your unpublished draft for tonight. You can delete what you don't like, of course.
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Thank you all. Truly.Per his request, no obit, no service. He was an intensely private man. I'll take my cues from my stepmom about what to share and when. She is also a private person.
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MsJS, My heartfelt condolences.
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MsJS,Sorry about your loss. Your dad sounds like my grandfather who lived to the same age and started every day with a shot and a beer and smoked since he was 14. When asked about his longevity, he attributed it to luck.
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Sorry to hear this. Best wishes during this time.
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What a lovely, succinct obituary for your father. I'm trying to avoid (pauses to take a sip of a decent Zin) a few of those myself.Somewhat off topic and totally bragging. I bowled my first 600 series in league tonight! 200, 201, 211. My new ball (a Storm Reign) is paying dividends.BB
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That's amazing, FB! Congrats!
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Brent: When asked about his longevity, he attributed it to luck.It's genetics! Eventually, we'll be able to tell why, and who. But there is perhaps as much as 20% of the population that can smoke like chimneys and not worry about cancer or heart disease (though their lungs will still be black when they die–at age 98). However, other than having parents who both smoked like chimneys all their lives to no ill effects, you have no way of knowing–and even that is not a full proof indicator. Same with diet, and even indicators, like high cholesterol. There are plenty of people who can have sky high cholesterol without it meaning anything to their overall health and longevity.My paternal grandfather married twice. My father and two of his brothers were from the 2nd marriage. My dad smoked for 55 years, drank a fair amount when younger, eats what he feels like (but is a grazer, rather than a big meat eater) and hasn't exercised since he left basic training. My uncle Bob has been a health nut since the mid-70s, and a bit of a hypochondriac, constantly going to the doctor and even having pre-emptive heart surgery. My uncle Don is not a health nut, but if he ever smoked he stopped well before my dad. But they are all still in alive, and in apparent good health–and the health nut (uncle Bob) just turned 80 and looks like he's 60. My dad's two oldest brothers, Frank and James, died almost 30 years ago, both from cancer. One had smoked, the other had not, both had otherwise healthy lifestyles. They were children from my paternal grandfather's first marriage. So much is nature–i.e., genetic–and so little is nurture–i.e., extra-genetic.
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We all know that for profit businesses never try to control costs. It might result in something like increasing their profits.I imagine the idea is that there is no effort to control end-user or consumer costs when there is a profit motive. Yet, there clearly is, or DVD players would still be $300 and Blu-Ray players would still be $500 and flatscreen TVs would still be $3000. Most healthcare, however, involves 3rd party payers such as insurance and Medicare, which is then subsidized by employers or the government, making the patient twice or thrice removed from the payment for service. The nature of insurance negotiations for what they will pay for and how much and under what circumstances make sense when one entity pays for hundreds-of-thousands of healthcare claims, but distorts the market by attempting to impose artificial controls on costs, rather than letting the end user pay for normal healthcare, where the healthcare industry would be incentivized to control costs or lose market share, and where controlling costs would be a competitive advantage. Right now, competitive advantage is gained by taking the most kinds of health insurance and being in-network for as many health insurance companies as possible, not controlling costs. There is little incentive to control prices, or otherwise control costs in a way beneficial to the patient, so they don't.
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