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Jim Grant was in top form in the above piece. But I’m also impressed with Kelly Evans. First time I came across Evans she was challenging JPM’s chief economist in an online interview for the WSJ, and doing a fine job. I suspected she might be headed for something big. A few years later, and she’s a CNBC talking head, chatting with Jim Grant. Congrats. Keep it up, that unique anti-establishment bug you have.
h/t ZH
Really good interview! This should be “required” viewing!
Do they think we are stupid?
Sometimes you wonder if we're living in an alternate universe.
Recent news reports that cite un-named sources and indicate the MF Global criminal case has “gone cold” are curious. In fact, these news reports are even more bizarre than previous reports claiming MF Global client funds have simply “vaporized.”
A pattern of behavior and reporting appears to be emerging that supports one overall goal: push the MF Global story under the radar, avoiding serious investigation and keep the inner workings and questionable circumstances surrounding a historic event out of public view and understanding. This, in turn, paves the way for MF Global creditors to legally swoop in on what rightfully belongs to the customers.
http://www.opalesque.com/641018/Do_they_think_we_are101.html
Propaganda Wars: Our Version "“ Balance sheet instabilities
So far in Propaganda Wars we have looked at the Bank's version of reality in which the banks were blameless victims of unscrupulous and fiendishly clever paupers who "?took' loans from the banks against the bankers better judgelment and will. In the next part we began to turn the tables and attack the banks where they feel they are strongest "“ in how they manage risk. We began with "Netting Out", where Liabilities and Assets are supposed to cancel each other out leaving the bank, no matter how huge its balance sheet, no matter how seemingly exposed to losses, just this side solvent at all times. I suggested this sort of cancelling out is fine on paper but in reality is more akin to people trying to swap sides in a rowing boat. I further suggested that this was why, despite the lovely graphs showing how it would all "Net Out", in the event, nearly all the major banks went bust and had to be bailed out.
In the Liabilities graph to right take a look at the aptly coloured "?thin blue line' of Equity. This is the money investors have put into the bank. It is the bulk of the bank's capital. As you can see it was never big, but as the bank has grown it has become smaller and smaller relative to everything else. Relative to the size of the bank's total liabilities (money the bank owes to others) on the one hand, and its total Assets (money it is owed "“ which means money it has lent OUT Mortgages etc. ie Money at risk) on the other, the equity base of the bank has become vanishingly small. Which is a problem because that equity is the base upon which the security of the bank rests; It is money the bank would need to call on if "“ in the most unlikely event "“ some of the loans it had made didn't work out. Unlikely I know but bear with me.
But dramatic and stupid as this sounds, and is, it falls far short of describing the real predicament, because these figures are based only on what appears "?on-balance-sheet' and does not count the bank's "?off-balance sheet' assets and liabilies. When these are counted as well leverage at the peak of the bubble was on average 50 times the equity base! And some insitutions (think Fannie and Freddie and AIG to name a but a few) were even higher.
http://www.golemxiv.co.uk/2012/03/propaganda-wars-our-version-balance-sheet-instabilities/
NYT's David Brooks in 2003, on why we should ignore objections to Colin Powell's WMD speech & just kick Iraq's ass.
Iran: Oh No, Not Again
Predator drone used in arrest of ND family. Crime: Stealing 6 cows
Rockefeller, Morgan, and War
Must-read takedown of Thomas Friedman
Peter Schiff on QE3, Macro Outlook
Rogue Government Traders
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