The days of outrageous Wall Street bonuses may be limited, depending on your definition of outrageous, of course. A recent Bloomberg story reported that Morgan Stanley, the owner of the world’s biggest brokerage, is capping cash bonuses at $125,000 and is deferring more compensation for senior level executives.
As we now are weeks in the debacle following the bankruptcy of MF Global on Oct. 31, the latest casualty has just been announced. Already individual traders, commodity trading advisers and introducing brokers have felt sting, but now charitable foundations are beginning to as well. According to Reuters, CME Group, which has given $22 million to Chicago-area schools and charities over the past five years, has stopped making grants through its main foundation, citing the collapse of MF Global. (more…)
“If this can happen to a highly regulated company like [MF Global], who can we trust in the future? Now speculators have three concerns: 1. The market, 2. Our own poor judgement and 3. To hope the clearing [firm] will not steal the accounts.” Futures reader
It’s time to wipe that smug smile off our face, the “our” meaning the futures industry. The bankruptcy of MF Global revealed a breakdown of an industry that has thrived knowing that customer margin was “safe” because of segregated fund protections. The sacrosanct institution of protecting margin at the exchange clearinghouse level while enforcing a strict segregation at the clearing firm has been tested throughout the years: Refco, Stotler, Lehman, et al. Sometimes it wasn’t as it should be: Volume Investors, Sentinel. But typically the funds were moved over with accounts and positions so clients would not have to worry about where their money was in addition to market risk. (more…)
Robert DeNiro has played a lot of villains and crooks in his time, just think of his performance of Al Capone in “The Untouchables.” Now, he’s ready to add another role to that list, that of Bernie Madoff, in an HBO production that has not received the green-light yet.
One of my favorite movies is “Back to School,” starring Rodney Dangerfield: Successful businessman goes back to school and in the process teaches academia a few lessons.
During the movie, Dangerfield’s character has an argument with his business professor on how to set up a company. When the professor gives a hypothetical example and Dangerfield asks him what product is being made, the professor answers that it doesn’t matter. Dangerfield mumbles to his son: “Doesn’t matter? Tell that to the bank.” When the professor discusses building a factory, Dangerfield asks why build when it’s cheaper to lease? Finally, when the professor outlines additional costs, Dangerfield inserts that he left out a lot, like “greasing” the local politicians, building inspectors and Teamsters. Meanwhile, the students start taking notes on Dangerfield’s comments, forgetting the professor. Comical and perhaps exaggerated, this scene points out a separation — probably not so fictional — between what is taught and what happens in the real world. (more…)
Those #!*+%¤ speculators.
Blame it on the “speculators.” Game of the week in Congress (only because Congress goes on holiday every other). A rational person (but see “holidays” above) would know that most prices rise (falls are “good”) for 25 different reasons. But it is so less strenuous to find one culprit.
Why do the derivatives markets attract these deviates while the stock markets rely on the prudent, cautious, venerable investor? (more…)
A Press Association news article recently showed that scientists had found a new use for gold — as components in heart implants. According to the article, scientists have added tiny “nanowires” to heart tissue and the result has been a higher level of functioning. In the future, some scientists are saying this technology could be used to repair the damage left by heart attacks. (more…)
I usually check my wallet when the word “reform” is used. But I have an idea that just might break the political logjam in the nation’s capitol. It is inspired by this blog and by the fact that communication, including decision making, is dominated today by electronic media. (We have no Macy’s here in northeast Florida, but we continue to buy through the website; this message was delivered by e-mail; we pay our bank and utility bills on-line).
Why must politicians journey to D.C. to conduct business? Is it that they cannot master the laptop? Do they need to use sign language to communicate. (more…)
One of the annoying things about recent public discourse is that it is not so much the public policy impact that determines whether a subject is newsworthy but whether a snappy new title could be placed on it and then discussed with great seriousness by cable TV arbiters.
Hence, instead of the usual prattle about whether a president should be seen vacationing during tough economic times or when major events occur, a new word is created — optics — and we discuss whether his judgment is skewed because he should know how it looks or more accurately how the other side would try and exploit it. (more…)
We are bombarded daily by financial reports inferring a connection between market actions and external events. This happens “as” that occurs, or the markets rise/fall “amid” some other occurrence. Often, the connector is specious while not technically inaccurate.
