IMF Working Paper
Monetary and Capital Markets Department
The (sizable) Role of Rehypothecation in the Shadow Banking System
Prepared by Manmohan Singh and James Aitken1
Authorized for distribution by Karl Habermeier
July 2010

~~~

Category: Credit, Derivatives, Think Tank

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

4 Responses to “The (sizable) Role of Rehypothecation In The Shadow Banking System”

  1. Harney says:

    Barry:

    Thank you for posting…wow.

  2. Savage1701 says:

    I’m going to use the “comments” area to say one word – “Yikes”!

  3. rd says:

    Its all ok.

    Customers don’t actually need their money.

  4. bear_in_mind says:

    Well, well, well. Yet another ‘legal’ method to rob trusting citizens of their hard-earned money under the rubric of “investment” by another fraud scheme. No wonder Wall Street was terrified of Elizabeth Warren.

    The U.S. Government figured out in the 1930′s that they could apply tax law to convict Al Capone with tax evasion. They elected not to let challenges overcome justice. However, today it seems if someone in a prosecutorial role has to break a sweat, the case is deemed “too hard” to prosecute and the perps walk away to re-offend… again and again and again.

    Whether consciously or not, the confluence of the following factors (to name a few): the lack of law enforcement; overt gaming of the finance system; routine use of inside information; and over-arching arrogance of the privileged few; all seem to point to a robust (F*CK YOU!) contempt to honest citizens, who still think in the hoary old belief America is still a country based upon laws, not men.

    Yet, pundits suggest the actions by MF Global are morally questionable, but somehow within existing legal bounds. Have we collectively lost our minds, along with all sense of proportion and decency?

    In an enlightening radio interview with research psychologist Daniel Kahneman (see segment @ 39:40 http://www.kqed.org/a/forum/R201111071000), Professor Kahneman spoke about the crucial issue of trustworthiness in a society:

    “Another feature… is the level of trust in strangers. I think trust is an essential element of emotional happiness. We find, for example, when we compare countries, in the Gallup poll, that the level of corruption in a country is predictive of the level of emotional happiness. And clearly, corruption is a sort of proxy for trust in strangers, and trust is critical to well-being because interactions with other people is the key to emotional well-being.”

    Who knows when we will reach a tipping point. But I think it’s entirely predictable that if our government doesn’t protect the rights of citizens vis-a-vis enforcing the laws, it’s regrettably only a matter of time before citizens take matters into their own hands.