Posts Tagged ‘FCIC’

Lehman: Doomed By Short Term Funding

Lehman: Doomed By Short Term Funding

By Barry Ritholtz, The Big Picture 

Amongst the items coming out of the FCIC hearings last week were new docs that revealed exactly how over-reliant LEH was on daily, short term funding to cover their longer terms costs. It was a recipe for disaster, a trailer park in search of a tornado.

Here is the WSJ:

“In looking last week at Lehman’s demise, the Financial Crisis Inquiry Commission produced testimony and documents that suggest the firm’s short-term funding was a serious problem well before its Sept. 15, 2008 crash. The new Lehman material is a brutal reminder of the flightiness of short-term debt. And it begs the question: Why didn’t Dodd-Frank do more to limit banks’ use of things like repo markets, in which banks take out short-term collateralized loans?

It was in the repo market that Lehman experienced stress from early 2008. J.P. Morgan Chase, which plays a central role in the “triparty” repo market, decided to introduce a reform in early 2008 aimed at making the market safer. The firm decided that borrowers would have to start providing collateral that slightly exceeded the intraday amounts it had advanced them. This extra collateral is called margin. When discussing the change, a Lehman executive called it “a problem,” in a February 2008 email contained in FCIC documents.”

via www.ritholtz.com

More here. 


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Arrogance Defined: Goldman Sachs

Here’s Karl Denninger’s thoughts on Goldman Sachs’s data dump on the FCIC.

Arrogance Defined: Goldman Sachs

JAKARTA, INDONESIA - JANUARY 27: Eight-year-old Basir (R), helps his sister Ning (L) to climb the mountain of rubbish where they will collect plastic, at the Bantar Gebang landfill site, one of Jakarta's biggest dump sites, on January 27, 2010 in Jakarta, Indonesia. Children who live and work at the landfill site are schooled by day before going to help their parents scavange and sell their finds after classes are over. Around 6,000 metric tons of garbage are dumped daily at the landfill site, and can contiue to be following the renewal of the site's contract last year for a further 20 years. (Photo by Ulet Ifansasti/Getty Images)

Will someone just break these bastards up – or close them down?

“We did not ask them to pull up a dump truck to our offices and dump a bunch of rubbish,” said Angelides, 56, who previously served as California’s treasurer. “This has been a very deliberate effort over time to run out the clock.”

I wonder if there’s an obstruction charge in here somewhere.

Another source says that Goldman dumped five terabytes of data on the FCIC.  To put this in perspective that’s something on the order of five hundred full-length DVD movies.  That sort of "data dump" is clearly intended to obstruct investigation and is the sort of tactic sometimes employed in civil litigation when one is trying to prevent the actual discernment of something important by burying it under 100 tons of what amount to chatter over whether the janitor was banging one of the secretaries.

This is the sort of arrogance that I find flatly unacceptable – and so should both Congress and others.  It appears the FCIC does, which is a good thing.  It also appears that Goldman badly miscalculated in their belief they could pull this crap and get away with it.

henry paulsonGoldman has a many-year history of simply pissing on people who claim to come to them with regulatory requirements.  Remember, it was Henry Paulson, then their chief, who came to the SEC and "asked" for the leverage limits that formerly bound them to be removed.  When he was told "no" in 2000, he waited a bit and came back in 2004, and this time got what he asked for.

After this he was "rewarded" with the Treasury Secretary position. 

Both Bear Stearns and Lehman Brothers failed with leverage more than double the former legal limits – limits they could not have exceeded but for Henry Paulson’s "request."

Put another way, neither of those firms would have failed but for Paulson’s act.

That puts a bit of a different color on the financial mess, doesn’t it?

Perhaps the FCIC will examine that factor in the lead-up to the explosion in our financial markets that began in 2007…..

Hope springs eternal!

Picture via Jr. Deputy Accoutant 


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Goldman Subpoenaed by FCIC after Sending Billion Pages of “Rubbish” to Panel

Goldman Subpoenaed by FCIC after Sending Billion Pages of "Rubbish" to Panel

Courtesy of Mish

The Financial Crisis Inquiry Commission (FCIC) is annoyed at the prospect of wading through billions of pages of "rubbish" that Goldman sent in response to an inquiry.

Here’s the result: Goldman Subpoenaed by FCIC After Panel Says Firm Hindered Probe

Goldman Sachs Group Inc. was subpoenaed by the Financial Crisis Inquiry Commission after panel members said the most profitable firm in Wall Street history engaged in a document “dump” to hinder a probe.

Goldman Sachs sent more than a billion pages of documents, FCIC Vice Chairman Bill Thomas said on a conference call with reporters today.

“We did not ask them to pull up a dump truck to our offices and dump a bunch of rubbish,” said Angelides, 56, who previously served as California’s treasurer. “This has been a very deliberate effort over time to run out the clock.”

Thomas said the panel’s requests to Goldman Sachs go back “several months.” Information the firm turned over didn’t comply with what was asked for and has put FCIC investigators in the position of “searching through the haystack for the needle,” he said.

“We expect them to provide us with the needle,” he said.

Federal prosecutors in New York are also investigating transactions by Goldman Sachs to determine whether to bring charges, people familiar with the matter said April 29. The company hasn’t been accused of criminal misconduct.

Finra Finds "Widespread Use Of High-Speed Algorithmic Trading" Was Likely Cause For Flash Crash

Zerohedge reports Finra Finds "Widespread Use Of High-Speed Algorithmic Trading" Was Likely Cause For Flash Crash

From Reuters: "Regulators probing the mysterious May 6 "flash crash" in the stock market are unlikely to find a single cause, though the widespread use of high-speed algorithmic trading was in general likely behind it, the head of the Financial Industry Regulatory Authority said on Monday. "We won’t stop until we finish the analysis. But I think the answer is there is unlikely to be a single cause," Finra CEO Rick Ketchum told Reuters on the sidelines of a conference here. "It is much more likely to be a proliferation of algorithmic trading that was all subject to the same triggers and didn’t have the same controls."

Unfortunately I cannot find any external reference to that quote from Reuters or anywhere else. The only


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Oracle Of Omaha Honors Subpoena

Oracle Of Omaha Honors Subpoena

International CEOs Attend Summit At Microsoft Campus

Courtesy of Karl Denninger at The Market Ticker 

So much for "transparency", "fair dealing" and similar.

Warren Buffett was "invited" to testify before the FCIC today.  He declined. 

Now one must understand that when a Congressionally-authorized panel "invites" you to appear, you’re not really being asked.  Right behind said invitation, should you refuse, is nearly-always a subpoena.

Buffett, believing that he has no duty to actually talk about what happened (especially with the ratings agencies of which he has, until fairly recently, held a major stake in via Moody’s), decided to say "nuts" to the invitation.

That in turn led to a subpoena, as expected. 

True to form of a snubbed "King" (remember, there’s kings and there is everyone else – the law applies only to the "everyone else") Buffett has failed to provide any sort of prepared testimony in advance to the FCIC.  That’s a snub too – it is common practice, and considered good form, to provide a written document containing your opening testimony a day or two before you appear so that the panel is prepared to respond to the gist of your comments.

Buffett, of course, deigned to schedule an interview with Tout TV just before going on, it has been announced.  So rather than provide his testimony to the Congress, he will instead give it to CNBS and allow them to spin it into whatever they’d like just before going in the dock.

That’s nice.

The oligarchs are such a sniveling pack of frauds.  If there’s nothing to be disclosed of importance, why not show up at…
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Zero Hedge

The 'Golden Age Of Plastic'? Banks Are Quietly Raising Credit Limits For Freespending Borrowers

Courtesy of ZeroHedge View original post here.

Credit-card lenders are calling it the 'Golden Age of Plastic'. But that's mostly because they're the ones hoarding all the gold.

Gloom-and-doom economists who have portended the imminent collapse of the American consumer (we don't want to name names) might have a reason to put off their calls for a downturn of epic proportions just a little bit longer. Because at a t...



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Phil's Favorites

BOGUS DEFENSE BINGO

 

BOGUS DEFENSE BINGO

Courtesy of Teri Kanefield

(Teri is an author, political commentator and lawyer. Visit her blog for more of her thoughts here.)

If the Trump Defense Trial Brief is any indication, we will be hearing lot of bogus defenses and crazy conspiracy theories.

I wanted a way to get through it without wanting to poke my eyeballs with a fork.

So I came up with an idea: Bogus Defense Bingo. You can get your bingo card here.

...

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The Technical Traders

The Wuhan Wipeout - Could It Happen?

Courtesy of Technical Traders

News is traveling fast about the Corona Virus that originated in Wuhan, China. Two new confirmed cases in the US, one in Europe and hundreds in China. As we learn more about thispotential pandemic outbreak, we are learning that China did very little to contain this problem from the start. Now, quarantining two cities and trying to control the potential
outbreak, may become a futile effort.

In most of Asia, the Chinese New Year is already in full swing.  Hong Kong, China, Singapore, Malaysia, India and a host of other countries are already starting to celebrate the 7 to 10 day long New Year.  Millions of people have already traveled hundreds of thousands of miles to visit family...



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Kimble Charting Solutions

Bad News For Crude Oil Should Come From This Pattern, Says Joe Friday

Courtesy of Chris Kimble

It’s a good idea for investors to be aware of key indicators and inter-market relationships.

Perhaps it’s watching the US Dollar as an indicator for precious metals or emerging markets. Or watching interest rates for the economy. Experience, history, and relationships matter. And it’s good to simply add these to our tool-kit.

Today, we look at another relationship that has signaled numerous stock market tops and bottoms over the years, and especially the past several months, Crude Oil.

When crude oil tops or bottoms, it seems that ...



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Insider Scoop

5 Software-Application Stocks Moving In Thursday's After-Market Session

Courtesy of Benzinga

Gainers

Atlassian Corporation, Inc. (NASDAQ:TEAM) stock surged 9.7% to $145.50 during Thursday's after-market session. According to the most recent rating by Morgan Stanley, on January 13, the current rating is at Overweight.

Diebold Nixdorf, Inc. (NYSE:DBD) shares increased by 8.1% to $11.48. The most recent rating by DA Davidson, on December 13, is at Buy, with a price target of $17.00.

Telaria, Inc. (NYSE:TLRA) stock rose 4...



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Biotech

Snakes could be the original source of the new coronavirus outbreak in China

Reminder: We are available to chat with Members, comments are found below each post.

 

Snakes could be the original source of the new coronavirus outbreak in China

Chinese cobra (Naja atra) with hood spread. Briston/Wikimedia, CC BY-SA

Haitao Guo, University of Pittsburgh; Guangxiang “George” Luo, Univers...



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Chart School

RTT browsing latest..

Courtesy of Read the Ticker

Please review a collection of WWW browsing results. The information here is delayed by a few months, members get the most recent content.



Date Found: Monday, 16 September 2019, 05:22:48 PM

Click for popup. Clear your browser cache if image is not showing.


Comment: This chart says SP500 should go back to 2016 levels (overshoot will occur of course)



Date Found: Tuesday, 17 September 2019, 01:53:30 AM

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Comment: This would be HUGE...got gold!


...

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Members' Corner

The War on All Fact People

 

David Brin shares an excerpt from his new book on the relentless war against democracy and how we can fight back. You can also read the first, second and final chapters of Polemical Judo at David's blog Contrary Brin.

The War on All Fact People 

Excerpted from David Brin's new book, the beginning of chapter 5, Polemical Judo: Memes...



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Lee's Free Thinking

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

 

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

Courtesy of  

The repo market problem isn’t the problem. It’s a sideshow, a diversion, and a joke. It’s a symptom of the problem.

Today, I got a note from Liquidity Trader subscriber David, a professional investor, and it got me to thinking. Here’s what David wrote:

Lee,

The ‘experts’ I hear from keep saying that once 300B more in reserves have ...



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Digital Currencies

Cryptos Have Surged Since Soleimani Death, Bitcoin Tops $8,000

Courtesy of ZeroHedge View original post here.

Bitcoin is up over 15% since the assassination of Iran General Soleimani...

Source: Bloomberg

...topping $8,000 for the first time since before Thanksgiving...

Source: Bloomberg

Testing its key 100-day moving-average for the first time since October...

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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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