Recent comments by Mook

Blackhalo wrote:

Yeah, but now, it's more leverage ^X rather than just old run of the mill, leverage.

$1 quadrillion in notional derivatives ain't gonna write themselves, yo!

Blackhalo wrote:

I'm not sure that's representative of the full 30 years, as issuing debt, to a different bank, and using that loan as collateral for borrowing the loaned money back, and then some, to use for the lucrative (for the money managers) proprietary trading, seems to be the thing now. An then you have QE, on top of that, buying up all the loans until they are worth something...

It was at least as far back as c.1985 when banks first started getting away from the pure fractional lending business (e.g. using in-house funds to speculate on underpriced options, which was a key contributor to the Crash of '87). Every additional activity since then - both by them and by the Fed - has been a case of dressing up leveraged OPM in different clothes.

I mean, yeah, in the past decade they've taken its uses to new and creative extremes, but it all comes back to Galbraith's observation that they're all just new ways of disguising leverage.

traderwalt wrote:

use other peoples' money.

The last 30 years of Wall Street, summarized in 4 words.

yuan wrote:

...oops
a succinct summary of us foreign policy for 70 years or so.

I'll admit it - I guffawed.

barfly wrote:

I think the FDIC is funded by the banks themselves
but it's been a while

That's right ... though if it matters I used the word "sponsored" rather than "funded" deliberately.

Finance_Fan wrote:

Finally something I can agree with coming from Mook!

(sniff) I feel like we've made a real breakthrough here, Finance_Fan. Let's pick up where we left off next week, m'k? Smile

josap wrote:

Problem is, the lenders get their ass covered and the rest of us get flushed.

Nobody said late-stage capitalism would be fun!

JP wrote:

I'm sure the banks will be relieved too, since they won't have to pay back all those depositors who think they are owed something.

That's exactly the point of gub'mint-sponsored depositor insurance programs. I think we took a wrong turn somewhere around the point where the gub'mint sponsorship started focusing on bankster protection programs instead.

Lobbyist Ben Dover wrote:

It also may cause the battery to explode which means the battery is not dead.

New Keyboard

But it's a hell of an accurate way to test it out!

Jackdawracy wrote:

You give the Greeks their cherished jubilee, and everybody is gonna want one.

I agree with precious little F_F says, but she's got one thing right:

It's high time the global lending community gets a dose of Darwinism.

Nemo wrote:

Are Greece's interest payments tax deductible?

We're going to have to wait until Deutsche Bank's next quarterly statement to find out.

Rob Dawg wrote:

No doubt that's how the European press will play it.

You can also bet there will be public grandstanding and squabbling among the remaining EU27 that - coincidentally! - delays the timely arrival of any needed humanitarian aid until just before public opinion on the matter threatens to turn nasty.

Because Ill gladly pay you Tuesday for a hamburger today... has stepped out of line, and Eeexelent! must see to it that punishment is inflicted.

Belmont wrote:

CIBC maintains their view that "by September the Fed will have enough evidence to raise rates at that month's meeting."

Very clever phrasing. Yes, they'll have enough evidence to raise rates in September ... but that doesn't mean they will. They'll find whatever rationale they need to, but it ain't gonna happen.

'Let me put it another way,' said the bird. 'You want a lift, a ship arrives and gives you one. The pilot may think he has any one of a million reasons why he has decided to stop and pick you up. The real reason is that I have determined that he will.' Dont Panic!

Rob Dawg wrote:

(Reuters) - The U.S. Mint said on Tuesday it temporarily sold out of its popular 2015 American Eagle silver bullion coins due to a "significant" increase in demand, the latest sign plunging prices have spurred a resurgence of retail buying.

Speaking of predictions from 2010: I still remember your sparring with Slumdog from that era and your concomitant plan to start nibbling on junk silver once it hits single digits.

Been a long, strange trip, but I think it gets there soon. Hi Ho Silver, Away!

Hey, you mean no FFR rate hike again this year? Inconceivable!

Comment by Mook from thread 'How long is an "Extended Period"?'

Mook wrote on Wed, 4/28/2010 - 5:40 pm (in reply to...)

I am firmly convinced that Bernanke will not raise rates until he is forced to do so by external factors (and maybe not even then, though that is not an alternative I care to countenance). That moment might arrive three weeks from now, or three years from now - there's no telling.

Most participants judged that the conditions for policy firming had not yet been achieved; a number of them cautioned against a premature decision.

"What, you think this asset Bubble, Bubble, Toil and Trouble is already epic? Here, hold my Burnt Swill - er - Starbucks Coffee and watch this!"

yuan wrote:

It's both reasonable and frightening to consider that we may only be in the early innings of the asset-stripping game.
does it really make sense to strip assets when the city is burning?

Youre only as good as your last envelope The blaze is still blocks away! Still plenty of time to blow this vault and loot it.

yuan wrote:

and you want the fed to increase interest rates. pure cognitive dissonance.

No more dissonant than it is to support higher taxes while hiring an accountant to keep one's own tax bill down.

ResistanceIsFeudal wrote:

Too inefficient (for the real purpose of wealth transfer to FIRE) versus other available methods.

It's both reasonable and frightening to consider that we may only be in the early innings of the asset-stripping game.

barfly wrote:

how can the Fed raise rates with all the foreign money flowing into the Treasury?

It's not like those foreigners all woke up last week, read poic's newsletter, and starting all buying our bonds at the same time. They were buying them years and years ago, too, with FF rates at 2%, 4%, 6%.

barfly wrote:

the real crime is not using that cheap foreign money to rebuild our crumbling roads and bridges

Eeexelent! Any benefit accruing to the proles from trillions in cheap foreign capital should be purely accidental.

Finance_Fan wrote:

What powerful is he talking about? Buying the entire mkt?

Hu Knows No need to buy if we don't let anyone sell!

Rickkk wrote:

05 Jan 1969 Ariana Afghan Airlines 701 We're finished!
29 Dec 1972 Eastern Air Lines 401 Hey, what's happening here?
25 Sep 1978 Pacific Southwest Airlines 182 Ma I love you.
28 Nov 1979 Air New Zealand 901 Actually, these conditions don't look very good at all, do they?
19Aug 1980 Saudi Arabian Airlines 163 No need for that, we are okay, no problem, no problem.
09 May 1987 LOT Polish Airlines 5055 Goodnight, Goodbye, We Perish!
24 Feb 1989 United Airlines 811 What the hell was that? I don't know.

It's time to play HCN's newest game: "Overheard On a Black Box or on the Floor of the Shanghai Stock Exchange?"

KarmaPolice wrote:

I wonder if people truly understand the mortality rate associated with driving.
Perhaps the younger generation understands.

I've got an engineering background, and even I can't wrap my head around the fact that we can stuff 200 people into fifty-ton metal sheaths, send them hurtling over land and sea at 600mph, and deposit them on narrow strips of asphalt at ninety-second intervals all day every day, all over the world, at one one-thousandth the fatality rate of getting behind the wheel for an equivalent distance. Almost Moore's Law-like in its improvement since the dawn of commercial air travel.

If Google et al. can get road travel even nine-tenths of the way there I'm all for it.

homedad43 wrote:

Long and short, way more financial uncertainty than there were in previous generations so that independent contracting isn't as much as you think

It's almost as if a Congress beholden to big business was tilting the playing field to make small-business entreprenurial work higher-risk for less reward.

But I'm sure that's just an incredible series of legislative coincidences.

Comrade Kristina wrote:

This sucker's going down.

Yet another reason you need to pull up stakes and move to GA: it's obvious that your prolonged exposure to Florida is bringing out the Bush in you. Laughing out loud

Rob Dawg wrote:

Commodities are going to be a total crapshoot for awhile.

Fixed It For Ya

At least with commodities trading you don't have to stand in those pesky lines at the cage for chips!

Oh, and in before Rob Dawg notes that, in this case, "Republican ≠ conservative". Wink

Comrade Kristina wrote:

Taxpayers are handing businesses £93bn a year – a transfer of more than £3,500 from each household in the UK.
The total emerges from the first comprehensive account of what Britons give away to companies in grants, subsidies and tax breaks, published exclusively in the Guardian.

How sad is it that I read this blurb and thought, "Thirty-five hundred quid a year - like $5k? That's it?"

I'd be willing to bet the equivalent figure in the US is at least double that. And that's being conservative (see what I did there?).

josap wrote:

from San Diego to Vegas ... in a drop-top Mustang ... in August.
Major sun burn.

For once in my life, I'd come adequately prepared with sunscreen, ball caps, etc., so it wasn't a major issue for us - my future wife was duly impressed.

She might have been less so if she'd known that I came prepared only because in my earlier Miata-owning days, I drove my strawberry-blonde GF of the time from GA to the Biltmore ... by way of an overnight at an Asheville hospital, where she was admitted with sun poisoning. Tired

Jackdawracy wrote:

I remember the first time I was in Phoenix in the summer, it felt like my mouth was a convection oven with every breath I took in.

Back when my wife and I were still dating, I thought it'd be the coolest thing in the world to extend our West Coast jaunt by a few days and drive from San Diego to Vegas ... in a drop-top Mustang ... in August.

Hey, fellow East Coasters: Didja know the main drag from SD to LV runs through the Mojave No one 17 and under admittedin' Desert? Well, turns out we didn't. It's one thing to stick your head in an oven - quite another to drive through a wind tunnel disguised as one.

I think it was 111° in Baker when we admitted defeat and stopped to put the top up.

adornosghost wrote:

we are back to living in caves, or trees, like Barely.

wait ... Bearly has a treehouse too? You mean not even that part of Belmont's schtick is original? Luuuuuu-Ceeeeee, you got some splainin to do!

Rob Dawg wrote:

Then on the way to visit the "ducks" on the Common I had to explain why Scoally Square wasn't there and why the plaza was so ummmm military.

Nothing says "one of our country's cradles of liberty celebrating the nation's birthday" quite like uniformed, armed-to-the-teeth MPs ostentatiously patrolling the Esplanade. Pardon me, sir, is this Boston or Tel Aviv? Steve

Good news was the fireworks from the Cambridge side were just as nice, and better news was even with two rugrats in tow we were able to catch the second T out of there, passing by a quarter-million of our closest friends at the successive stops.

Rob Dawg wrote:

I remember when the freedom trail was just painted on the bricks.

And I remember when there weren't 50 people stuffing their faces and/or buying worthless trinkets at Quincy Market for every soul wandering the trail. Serves me right for taking the family there on 4th of July weekend.

curious wrote:

Maybe if one more person sells, they'll stop all trading.

Hu Knows And the Central Committee will fix all equity values at their still-high current levels!

Hey, this 'capitalism with Chinese characteristics' thing is a breeze.

Bubblisimo Gerkinov wrote:

Also, I believe mook is referring specifically to computer modelling in which a general model can help one understand something generally, but the law of diminishing returns kicks in and specific modelling isn't going to help much beyond a certain point.
As well, as one attempts to account for more and more factors in a model, certain factors will be too heavily weighted or "unknown unkowns" will not be factored in and the model will go pear shaped.
Mook?

Pretty much. This is why Wall Street's models generally fail, and fail spectacularly ... highly specialized, designed in a vacuum, and generally focused on counting the number of capillaries on a particular leaf on a particular tree with complete disregard to the surrounding forest.

Pigged

vtcodger wrote:

No, you don't. But the less understanding you have, the more likely are to make really bad predictions (probably).

That's true, but only up to a point. Past that point, it's been well-documented that increased understanding leads to less accurate predictions, not more ... even as it generates steadily increasing confidence in one's predictions.

Models work best when they incorporate a healthy respect for "unknown unknowns", fat tails, black swans, what have you. The very best of all incorporate the seeds of their own destruction - the recognition that past a certain point, there's nothing more to be gained from increased use of the model.

Eeexelent! Smithers, that means it's time to expand the H-1B program by a further 5.4 million. Get my lobbyists on the phone!

vtcodger wrote:

No, you don't. But the less understanding you have, the more likely are to make really bad predictions (probably).

That's true, but only up to a point. Past that point, it's been well-documented that increased understanding leads to less accurate predictions, not more ... even as it generates steadily increasing confidence in one's predictions.

Models work best when they incorporate a healthy respect for "unknown unknowns", fat tails, black swans, what have you. The very best of all incorporate the seeds of their own destruction - the recognition that past a certain point, there's nothing more to be gained from increased use of the model.

Lets take a coffee break This is interesting:

Debt Relief Should Be Greece's Parting Gift - Bloomberg View

Looking ahead, a deteriorating economy probably means debt relief will be required, the IMF said:

"If the package of reforms under consideration is weakened further -- in particular, through a further lowering of primary surplus targets and even weaker structural reforms -- haircuts on debt will become necessary."

(gasp) "You s-s-s ... you said ... the "H" word!!!"

JP wrote:

Acropolis now.
Twitter

It might have given me a half-laugh if The Economist hadn't pipped him to the post by ... hold on, let me check ...

five freakin' years.

Pigged

Lobbyist Ben Dover wrote:

Hedge fund drove Bentleys and didn't buy Porsches.

Pulling out of PT not an hour ago I saw a guy who had "hedgie" written all over him. Brand new Beemer M4 with NY plates. Late-20's, suit and tie, $500 sunglasses, blowing down the 2-lane road past me at twice the legal speed limit. As I pulled up to a red light in the middle lane he was in the right-turn lane behind a van, blowing his horn relentlessly despite the prominent overhead presence of a "No Turn on Red" sign.

He bullied the van into turning, pulled out behind him, hit the gas to pass and ... was promptly front-ended by an SUV pulling out from the shopping center across the street.

Proles win this round. Evil

Lobbyist Ben Dover wrote:

Hedge fund drove Bentleys and didn't buy Porsches.

Pulling out of PT not an hour ago I saw a guy who had "hedgie" written all over him. Brand new Beemer M4 with NY plates. Late-20's, suit and tie, $500 sunglasses, blowing down the 2-lane road past me at twice the legal speed limit. As I pulled up to a red light in the middle lane he was in the right-turn lane behind a van, blowing his horn relentlessly despite the prominent overhead presence of a "No Turn on Red" sign.

He bullied the van into turning, pulled out behind him, hit the gas to pass and ... was promptly front-ended by an SUV pulling out from the shopping center across the street.

Proles win this round. Evil

Finance_Fan wrote:

The other difference: my 5 year old will not call himself "the talent" for pulling the trigger on the assets with higher yield.

Self-centered, bordering on solipsistic.
Thinks only of the short term.
Poor to nonexistent impulse control.
Apt to sudden changes in temperament when things don't go his way.
Does not consider the consequences of his actions.
Blames others instead of accepting responsibility.

Yeah, I'm having a hard time coming up with any other points of differentiation.

Finance_Fan wrote:

It's as if they were blindly chasing yield. My 5 year old can do that!

These days the only difference between a typical banker and a typical 5-year-old is that the banker is more likely to No one 17 and under admitted his pants. Brown Pants

arthur_dent wrote:

Greece Given Hours to Save Place in Euro

Party Party Party

Folks, you know what that means! It's time to play ...

"MOVE! THAT! ARROW!" (Ker-chunk!)

After five long years of Kick Me under the auspices of "Greek debt deal near" ... finally, against all odds, and like the yodeling mountain climber hitting "25" on The Price Is Right, we've arrived at the very last line of the game!

3 years
3 quarters
3 months
3 weeks
3 days
3 hours <-- You are here.

Finance_Fan wrote:

that's what risk pricing in fixed income is there for.

New Keyboard

merchants of fear wrote:

Chinese markets, which had risen as much as 110 percent from November to a peak in June, have tumbled more than 20 percent since June 12 in jaw-dropping volatility as money surges in and out of the market.
Shanghai's benchmark share index plunged below 4,000 points for the first time since April on Thursday.

ZOMG this bear market has wiped out twelve entire weeks of gains! Dooooooooooooooom!!!

Personally I only regret that the Chinese market isn't easier to short, so that in addition to crushing all the longs we could have expected the nice snapback interlude towards the old highs to crush all the shorts as well.

ResistanceIsFeudal wrote:

stuffed, then mounted, or is it the reverse? I can never remember...

Those sheep ain't gonna scare themselves, yo!