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- Currencies Try to Rebound Today
- 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
Frontline On MF Global’s Six Billion Dollar Bet
While the sur-realities of just what Corzine and the rest of the MF Global ‘traders’ did has been extensively discussed here and elsewhere, PBS’ Frontline provides the most succinct (and relatively in-depth) documentary on just what occurred from how the corrupt CEO lobbied regulators who had the power to stop his risky bets to the endgame realization of the missing customer money. A narrative, not just of “a bet that went bad”, but “a Wall Street morality tale“. Must watch!
The story of Jon Corzine, the former head of Goldman Sachs and political power broker, who took over MF Global in the spring of 2010 with oversize ambition and a passion for risk. But after a massive bet on European debt turned sour, the firm lay in ruins, with more than a billion dollars of customer funds missing.
Watch Six Billion Dollar Bet on PBS. See more from FRONTLINE.
Watch Six Billion Dollar Bet on PBS. See more from FRONTLINE.
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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An Infographic Of The Online Retail Warehouse Temp Job
Brought to you by: Business Insurance Guide
One of the biggest surprise stories of the past several months, in addition to economic activity skewing record warm weather, and the New Normal seasonal adjustments (which as Albert Edwards noted earlier are giving data an upward bias for each of the past three years), is the consistently “better than expected” jobs numbers. There is one problem: as discussed previously, the rising jobs are purely a quantity over quality trade off, as every month more and more temp jobs take the place of permanent ones, especially those of former professionals from the FIRE sector. In fact, in January temp jobs soared by the most on record, and the total number of temp workers was just shy of all time highs. Ironically, as this happened, discretionary online retail companies have seen their stock price soar to record highs. One of the primary drivers for this has been the increased “efficiency” at these companies’ hubs – their warehouses. Which just happen to be staffed with temp workers. The following infographic presents the reality behind these American “sweatshops” – because this is the “quality” of job that is rising rapidly in the current economy (at… Continue reading
Quants: The Alchemists of Wall Street
Quants are the math wizards and computer programmers in the engine room of our global financial system who designed the financial products that almost crashed Wall st.
The credit crunch has shown how the global financial system has become increasingly dependent on mathematical models trying to quantify human (economic) behavior.
Now the quants are at the heart of yet another technological revolution in finance: trading at the speed of light.
What are the risks of treating the economy and its markets as a complex machine? Will we be able to keep control of this model-based financial system, or have we created a monster?
A story about greed, fear and randomness from the insides of Wall Street.
CDC says Gardasil shots should be ‘routine’ for boys
Every male between the ages of 11 and 21 should get a Gardasil vaccine for cervical cancer, and those between the ages of 13 and 21 should also get “catch-up” shots later down the road. This is only the opinion of the U.S. Centers for Disease Control and Prevention’s (CDC) Advisory Committee on Immunization Practices (ACIP), of course, which recently announced its final recommendations for the controversial vaccine.
CBS News reports that, as a followup to its earlier, but incomplete, recommendation back in the fall that boys be given HPV (human papillomavirus) vaccines in addition to girls, the CDC has now formalized its position in the journal Annals of Internal Medicine, as well as in the Morbidity and Mortality Weekly Report. The agency is basically now recommending that all young men and women get the Gardasil vaccine.
The CDC announcement comes just days after Canadian health officials made a similar announcement recommending that all boys between the ages of nine and 26 in that country be jabbed with Gardasil. Together, the two announcements could potentially double profits for the vaccine, that is if enough members of the public are foolish enough to actually comply with these new recommendations.
ACIP heavily influenced by Big Pharma
Many of ACIP’s members are nominated directly by the drug industry, and often have significant financial ties to vaccine manufacturers. So it is really no surprise that ACIP has made such egregious recommendations without considering the fact that Gardasil has been shown to be medically useless for its stated purpose, and a significant threat to health in many cases.
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Gold vs Gold Stocks – Goldman Releases “2012: A Gold Odyssey? The Year Ahead…”
As one can glean from the title, in this comprehensive report by Goldman’s Paul Hissey, the appropriately named firm deconstructs the divergence between gold stocks and spot gold in recent years, a topic covered previously yet one which still generates much confusion among investor ranks. As Goldman, which continues to be bullish on gold, says, “There is little doubt that gold stocks in general have suffered a derating; initially with the introduction of gold ETFs (free from operational risk), and more recently with the onset of global market insecurity through the second half of 2011. However, gold remains high in the top tier of our preferred commodities for 2012, simply because of the extremely uncertain macroeconomic outlook currently faced in many parts of the world. The official sector also turned net buyer of gold in 2010 for the first time since 1988, and has expanded its net purchases in 2011.” And so on. Yet the irony is, as pointed out before, that synthetic paper CDO, continue to be the target of significant capital flows, despite repeated warnings that when push comes to shove, investors would be left with nothing to show for their capital (aside from interim price moves of course), as opposed to holding actual physical (which however has additional implied costs making it prohibitive for most to invest). Naturally, this is also harming gold stocks. Goldman explains. And for all those who have been requesting the global gold cash cost curve, here it is…
- We feel there are some obvious solutions to the flight to physical gold ETFs. In order to entice investors away from the gold ETFs, producers
must- Reduce perceived operational risk
- Deliver to market expectations (which includes managing those expectations)
- Demonstrate volume- (not just price-) driven EPS growth
- Return cash to shareholders
- Continue to replenish resources and reserves
- It is also likely that some of the derating we have seen recently has been as a result of changing sentiment towards sovereign risk. With a skittish view toward equities in general, and a decreasing willingness to pay for future earnings, it appears as though the market is less inclined to favour exposure to companies in locations where the perceived risk is higher – rightly or wrongly (West Africa, Philippines, etc.).
