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- Superior Biotechnology Leads to Superior Drugs
- The Delusion of Regulating Risk
- Talk of a Greek Exit Gets Louder
- Doug Casey on Taxes and Freedom, Part II
- Is Facebook the Rusty Hinge of the Stock Market?
- Fitch Downgrades Japan
- Doug Casey on Taxes and Freedom
- Greeks Run on Banks as Euro-Confidence Wanes
- To the Class of 2012
The “Corzine-Dimon Syndrome”
On its best days, the American judicial process is a blindfolded Lady Justice — prosecuting the truly guilty and exonerating the truly innocent. On its worst days, it is a Water Wiggle — whirling around unpredictably, without any apparent connection to guilt, innocence, Constitutionality or the proportionality of alleged crimes to one another.
On good days, guilty parties go to prison; innocent parties do not. On very good days, innocent parties do not even have to go to the trouble of hiring a lawyer and showing up in court. Law enforcement agencies correctly decide to spare them the burden (and potential agony) of proving their innocence before a judge or jury.
On bad days, the exact opposite occurs. Innocent parties go to prison, while guilty parties do not. On very bad days, guilty parties do not even have to go to the trouble of hiring a lawyer and showing up in court. Law enforcement agencies incorrectly decide to withhold charges and spare guilty parties the burden (and potential agony) of defending their guilt before a judge or jury.
Once you string enough bad days together, you get a Water Wiggle — a “system” of law enforcement that investigates and prosecutes alleged crimes capriciously, unfairly and disproportionately. You get a system, for example, that:
1) Prosecutes Hall of Fame pitcher, Roger Clemens, for injecting performance-enhancing drugs into his own body, but does not prosecute a single investment banking executive for fraudulently injecting mortgage-backed securities into the US financial system.
2) Tasers-to-death a Mexican national for sneaking into the US to find work, but provides billion-dollar bailouts to finance company executives whose extreme incompetence causes thousands of individuals to lose their jobs. (Bring us your tired, huddled masses so that we can beat them to death).
3) Threatens to shut down porn film studios for failure to comply with “condom laws,” but turns a blind eye to Wall Street’s serial financial rape of the US taxpayer.
4) Fires a 5-year employee of Wells Fargo for shoplifting when she was a teenager, but does not bother to prosecute M.F. Global’s former CEO, Jon Corzine, for allowing (or causing) $1.6 billion of client funds to disappear from the firm he controlled.
In other words, once you string enough bad days together, you get a “system” that punishes minor crimes and rewards major crimes…consistently. You get a system that punishes entrepreneurial initiative by rewarding cronyism.
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Taxpayers Still In Hole $133 Bil From Gov’t Bailouts
The bailouts of the last three years were a rousing success, Democrats like to say, a shining example of how government activism can save the economy. Really? A new government report suggests otherwise.
In 2010, the newspapers were full of reports of companies “paying back” loans under the $700 billion Troubled Asset Relief Program (TARP).
Over and over, Democratic politicians and left-leaning pundits suggested the money would not only be paid back, but that taxpayers might even profit from it. And even if the money could not be recovered, they said, a depression has been averted.
Well, here’s some news for them, courtesy of the Associated Press: “U.S. taxpayers are still owed $132.9 billion that companies haven’t repaid from the financial bailout, and some of that will never be recovered.”
It may be even worse than that gloomy prognosis delivered to Congress on Thursday. The federal government has already written off $12 billion, and it may take years — if ever — to get the rest of the money owed by the 458 companies it “invested” in.
Take General Motors. The government break-even on its GM investment is $54 a share. GM closed Thursday at $24.72 a share. But in… Continue reading
Corzine: ‘I Simply Do Not Know Where The Money Is’
Read: STATEMENT OF JON S. CORZINE BEFORE THE UNITED STATES HOUSE OF REPRESENTATIVES
A contrite Jon S. Corzine will express both sorrow and a firm defense of his actions Thursday in his first public appearance since the collapse of MF Global Holdings Ltd. in late October.
“Recognizing the enormous impact on many peoples’ lives resulting from the events surrounding the MF Global bankruptcy, I appear at today’s hearings with great sadness,” Mr. Corzine plans to say in testimony prepared for a hearing by the House Agriculture Committee, which subpoenaed the former MF Global chief executive Friday. A copy of the testimony was released early Thursday on the panel’s website.
The testimony Thursday is sure to be contentious. Mr. Corzine, who resigned as chairman and CEO of MF Global after its Oct. 31 bankruptcy filing, is a Democrat and former U.S. senator and governor of New Jersey.
He will face an intense grilling by the Republican-led committee, creating an atmosphere fraught with political drama. Mr. Corzine, 64 years old, received President Barack Obama’s support in 2009 for his unsuccessful campaign for re-election as governor, and more recently held a fund-raising dinner for Mr. Obama.
$1B in MF Global Funds MIA
FBNs Charlie Gasparino on the amount missing from MF Global growing to more than $1 billion and former CEO Jon Corzine hiding out since he left the firm.
Corzine subpoenaed by House committee on MF Global collapse
Jon Corzine is in demand in Washington, with one committee subpoenaing him to testify, another getting ready to vote to do that, and a third negotiating with his lawyers about appearing.
The House Agriculture Committee voted Friday to subpoena Corzine, compelling the former governor U.S. senator to appear next week to discuss the financial collapse of his former firm, MF Global.
Corzine’s spokesman declined to comment Friday on the subpoena or the invitations from the two other congressional committees.
MF Global was a futures broker that filed for bankruptcy after Corzine bet $11.5 billion on European sovereign debt in his bid to rebuild profits. The Agriculture Committee is involved because farmers rely on futures contracts to hedge their risks, and the Commodity Futures Trading Commission is part of the committee’s jurisdiction.
The subpoena was supported by both Republicans and Democrats on the House Agriculture Committee, and chairman Frank Lucas, R-Okla., ranking member Collin Peterson, D-Minn., sent out a joint statement.
“The circumstances surrounding… Continue reading
US Debt Eclipses Economic Output
The United States has joined the rogues gallery of nations whose debt has exceeded its annual economic output, or gross domestic product (GDP).
The U.S. national debt has broken $15.033 trillion, higher than the $15.032 trillion gross domestic product, meaning as of now, the country’s debts are higher than its annual output, according to usdebtclock.org, citing government data.
Five Banks Account For 96% Of The $250 Trillion In Outstanding US Derivative Exposure
Is Morgan Stanley Sitting On An FX Derivative Time Bomb?
The latest quarterly report from the Office Of the Currency Comptroller is out and as usual it presents in a crisp, clear and very much glaring format the fact that the top 4 banks in the US now account for a massively disproportionate amount of the derivative risk in the financial system. Specifically, of the $250 trillion in gross notional amount of derivative contracts outstanding (consisting of Interest Rate, FX, Equity Contracts, Commodity and CDS) among the Top 25 commercial banks (a number that swells to $333 trillion when looking at the Top 25 Bank Holding Companies), a mere 5 banks (and really 4) account for 95.9% of all derivative exposure (HSBC replaced Wells as the Top 5th bank, which at $3.9 trillion in derivative exposure is a distant place from #4 Goldman with $47.7 trillion). The top 4 banks: JPM with $78.1 trillion in exposure, Citi with $56 trillion, Bank of America with $53 trillion and Goldman with $48 trillion, account for 94.4% of total exposure. As historically has been the case, the bulk of consolidated exposure is in Interest Rate swaps ($204.6 trillion), followed by FX ($26.5TR), CDS ($15.2 trillion), and Equity and Commodity with $1.6 and $1.4 trillion, respectively. And that’s your definition of Too Big To Fail right there: the biggest banks are not only getting bigger, but their risk exposure is now at a new all time high and up $5.3 trillion from Q1 as they have to risk ever more in the derivatives market to generate that incremental penny of return.
