Some longer form reads for your Sunday morning pleasure:
• A Circle of Tech: Collect Payout, Do a Start-Up (NYT)
• Nobody Seems to Understand What Jeff Bezos is Doing. Does He? (Pando Daily)
• Why Can’t Obama Bring Wall Street to Justice? (Daily Beast)
• “Oh My God — We’re In Bed With The Vampire Squid!” (Business Insider)
• Degrees of Debt: A Generation Hobbled by the Soaring Cost of College (NYT)
• Developing Nations: Defeatist mindsets of different camps of worn out oldsters (New Economic Perspective)
• Uncatchable: George Wright, America’s most elusive fugitive, ran for forty years. (GQ)
• Travel: The Many Ways to Catch Shut-Eye in the Sky (WSJ)
• Why fiction is good for you (Boston.com)
• Craig Claiborne: When He Dined, the Stars Came Out (NYT)
What are you reading?
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Stocks Fall More Than 1% as Bank News Stings
Source: Barron’s
Category: Financial Press
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.
http://www.washingtonpost.com/business/2012/05/11/gIQA8scILU_story.html
Loews performance besting Berkshire Hathaway
Coming soon to a state near you?
California’s deficit 50% larger than predicted – 16B v. 9B
http://www.nytimes.com/2012/05/13/us/huge-new-shortfall-predicted-in-california-budget.html
Well Obama and Co. were just handed a Prime Cut piece of red meat to cut through the conflicted grizzle his administration has with the financial oligarchy.
http://dealbook.nytimes.com/2012/05/11/s-e-c-opens-investigation-into-jpmorgans-2-billion-loss/
This is like being told the winning lottery ticket numbers before the draw. Dimon, his apparent buddy, will be served up on a platter to demonstrate his resolve to fight for the 99%. Talk about unintended consequences. The pitchforks will be out in full force on this one.
Jamie Dimon ‘fesses up.
http://www.nytimes.com/2012/05/14/business/dimon-says-jpmorgan-made-an-egregious-mistake.html?_r=1&hp
This kind of Sunday Morning Mea Culpa makes one want to puke!
Re. “Developing Nations = Adult-Sized Children arguing over each other’s “dreams” (hallucinations…)
You damn baby boomers … “L”ucy is * not * in the “S”ky with “D”iamonds.
WakeTFUp
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The Evolution, and Psychological Roots, of Overconsumption
Humans have an innate need for status and for novelty in their lives. Unfortunately, the modern world has adopted very energy- and resource-intensive ways of meeting those needs. Other ways are going to have to be found as part of the move to a more sustainable world.
Status
Novelty
+++ The mesolimbic dopaminergic reward system
The (very important) mechanism of habituation (aka the hippo that camps in your head)
America and addiction
+++ Impulsivity, discount rates and preparing for the future
The fallacy of reversibility A.K.A “The ratchet effect”
Old brain, new choices
Adaptation executors
oh shit. the link
http://fleeingvesuvius.org/2011/05/10/the-psychological-roots-of-resource-overconsumption/
(happy mother’s day all you mothers out there ;)
This was virtually inevitable, yet the board and Thompson somehow seemed to think Yahoo, with enough problems as it is, could weather his fake degree. Maybe the board should go, too.
Yahoo’s Thompson Out; Levinsohn In; Board Settlement With Loeb Nears Completion
http://allthingsd.com/20120513/exclusive-yahoos-thompson-out-levinsohn-in-board-settlement-with-loeb-nears-completion/
Straight shooter re JPM!
‘If you’re wondering why you should care if some idiot trader (who apparently has been making $100 million a year at Chase, a company that has been the recipient of at least $390 billion in emergency Fed loans) loses $2 billion for Jamie Dimon, here’s why: because J.P. Morgan Chase is a federally-insured depository institution that has been and will continue to be the recipient of massive amounts of public assistance. If the bank fails, someone will reach into your pocket to pay for the cleanup. So when they gamble like drunken sailors, it’s everyone’s problem.’ [...]
If J.P. Morgan Chase wants to act like a crazed cowboy hedge fund and make wild exacta bets on the derivatives market, they should be welcome to do so. But they shouldn’t get to do it with cheap cash from the Fed’s discount window, and they shouldn’t get to do it with money from the federally-insured bank accounts of teachers, firemen and other such real people. It’s a simple concept: you either get to be a bank, or you get to be a casino. But you can’t be both.’
http://www.rollingstone.com/politics/blogs/taibblog/jamies-cryin-dimon-j-p-morgan-chase-lose-2-billion-20120511
After a while I’d had enough of economics, technology, science and finance so I have to read something different.
Currently it’s a book about Jorge Luis Borge’s work as a translator (if you’ve never read Boges’ Ficciones or Fictions, they’re remarkable).
Chp 1 of “Invisible Work – Borges and Translation” by Efrain Kristal starts with this first sentence:
“Borges affirmed, in earnest, that an original can be unfaithful to a translation.”
“You know, Americans seemed to be fascinated by their Time of Birth–often alluding to, through their Idioms, whether they were Born ‘during the Day’, or ‘at Night’–though, be assured, Today’s ‘Caines, like Chipmunks, were “Born in the Dark”..” — “Anonymous”
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Public is kept in dark about Pa. education chief’s meeting with Reading School District officials
By Madelyn Pennino, staff writer | 0 comments
Reading School District officials met with Pennsylvania’s top public-education official in Harrisburg on Thursday, May 10, but no one who was there would give details about the discussion or outcome.
There’s no question that the Reading School Board caught the attention of the state Department of Education on April 25, when the board told Acting Superintendent Drue Miles and seven of his cabinet members to cease coming to work unless they were asked.
Members of that administrative team also made headlines when they predicted the district would have a $53 million shortfall in a 2012-2013 budget showing about $247 million in expenditures….”
http://www.bctv.org/special_reports/education/public-is-kept-in-dark-about-pa-education-chief-s/article_e02509e0-9ba0-11e1-b524-001a4bcf887a.html
Sorry, cannot shake off Jamie & Co. this weekend
‘During the party, Mr. Dimon took questions from the crowd, according to an attendee who spoke on condition of anonymity for fear of alienating the bank. One guest asked about the problem of too-big-to-fail banks and the arguments made by Mr. Volcker and Mr. Fisher.
Mr. Dimon responded that he had just two words to describe them: “infantile” and “nonfactual.” He went on to lambaste Mr. Fisher further, according to the attendee. Some in the room were taken aback by the comments.
[..]
‘The hypocrisy is that our nation’s big financial institutions, protected by implied taxpayer guarantees, oppose regulation on the grounds that it would increase their costs and reduce their profit. Such rules are unfair, they contend. But in discussing fairness, they never talk about how fair it is to require taxpayers to bail out reckless institutions when their trades imperil them. That’s a question for another day.’
http://www.nytimes.com/2012/05/13/business/jpmorgan-shooting-itself-in-the-foot-fair-game.html?_r=1&ref=business
I’m really curious of the fact that no one is asking the obvious question regarding JPM: what exactly is their position?
If you take Dimon’s statement as factual, then the CDS position is a hedge. So if it’s a hedge and they are selling CDS (since publications have stated that JPM has been losing money as the CDS price moves up), there can only really be two positions where you would be selling CDS: 1) short credit or 2) cash (or some combination).
Normally a bank holding customer deposits would be long credit. They would be a CDS buyer at appropriately cheap rates or otherwise as necessary, and that would be the hedge. Instead, JPM is selling CDS. So, simplistically, they must be net short credit. They are looking to buy it back at cheaper prices.
Now, why would JPM be net short credit unless they are making a directional bet on interest rates?
The next thing is, if they are short credit, why is the CDS price moving against them without a commensurate valuation adjustment to the underlying bond? Is there some issue with the timing of recognizing the bond valuation and the CDS valuation? Or would the loss be even more outsized without netting the bond price change such that there then would be the “egregious” error? Does this indicate they are sitting more on the cash side of the short credit to cash kaleidoscope?
Those who are making naked bets on CDS may not really care to know any of this, but for the rest – I think it’s key.
The link to the piece of the immortal Craig Claiborne was much appreciated. A man of great influence, who should not be so easily forgotten.