Posts Tagged ‘Lawrence McDonald’

Geithner Allowed CDS ‘Kiting’ on Wall Street

Geithner Allowed CDS ‘Kiting’ on Wall Street

Courtesy of John Lounsbury

Colorful kite in sky

Definition from Wikipedia:

Check kiting is the illegal act of taking advantage of the float to make use of non-existent funds in a checking or other bank account. It is commonly defined as writing a check from one bank knowingly with non-sufficient funds, then writing a check to another bank, also with non-sufficient funds, in order to cover the absence. The purpose of check kiting is to falsely inflate the balance of a checking account in order to allow checks that have been written that would otherwise bounce to clear.

From July 2004 through September 2008, Lawrence G. McDonald was a Vice President of Distressed Debt and Convertible Securities Trading at Lehman Brothers (LEHMQ.PK). He is now a Managing Director at Pangea Capital Management LP. Lawrence is most famous as author of the best selling book "A Colossal Failure of Common Sense: the Inside Story of the Collapse of Lehman Brothers".

MacDonald, in an article at The Huffington Post entitled "The Geithner Deception", lays major blame for the financial collapse of 2008 at the feet of now Treasury Secretary Timothy Geithner. Geithner was President of the Federal Reserve Bank of New York from 2003 through 2008 as the credit bubble expanded and exploded into crisis.

Unsettled Derivatives Trades

McDonald’s premise is that a major reason for the collapse of Lehman and, very quickly, the world’s financial structure, was unsettled derivative trades. The most notorious of these were known as CDS (credit default swaps) which amounted to guarantees by a seller to make payment to the buyer should there be a credit default by a third party. We’ll come back to discuss CDSs further in the next section.

But first, let’s complete the picture so well laid out by Lawrence McDonald. He compares the operation of CDS trades to those in a regulated market, such as the stock exchanges or regulated derivative markets such as the CBOE (The Chicago Board of Options Exchange). When trades are made in those markets, the buyer must deliver payment by the settlement date or the trade is cancelled. In the case of stocks, settlement is required within three days.

McDonald says the problem became blatantly evident to Geithner in…
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Phil's Favorites

Pop Culture as an edge in business

 

Pop Culture as an edge in business

Courtesy of 

 

 

Josh here – once upon a time it was totally normal to be sitting face to face with a friend and talking across a table, and then they locked down New York City and you know what happened from there. Anyway, my friend Brooke Hammerling was the last person I met with before the shutdown and we taped this conversation about the importance being up on Pop Culture. Lots of business leaders struggle to understand what’s going on from day to day because they’re busy! Brooke’s new newsletter, Pop Culture Mondays, fi...



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Biotech/COVID-19

Trump Vaccine Czar Still Stands to Profit

 

Will there really be several hundred million doses of a COVID-19 vaccine by the end of 2020, which would be record fast vaccine develop, or is this just wishful thinking? Moncef Slaoui, former executive at GlaxoSmithKline and board member of Moderna (till recently) and newly appointed Trump official, says the vaccine will be ready. Either way, Moderna (MRNA) has received nearly half a billion dollars from the government, and its stock price has soared. Amee Vanderpool tells more of the story: 

 

Trump Vaccine Czar Still Stands to Profit

Courtesy of Amee Vanderpool, SHERO 

The Trump administration has announced an ambitious plan to develop and produce millions of doses of a new COVID-19 vaccine by t...



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ValueWalk

New home sales smashed expectations during economic crisis

By Gorilla Trades. Originally published at ValueWalk.

The major indices are all sporting considerable gains at midday, with the S&P 500, the Dow, and the Nasdaq all hitting new multi-month highs in early trading. The continued COVID-related optimism remains the main catalyst behind the rally in stocks and global risk assets and investors shrugged off the diplomatic standoff between the U.S. and China despite the protests in Hong Kong over the weekend. On another note, small-caps have been leading the way higher this morning, together with the key cyclical sectors and that bodes well for the rest of the week, especially as the main overseas indices have also been pushing higher this week.

[reit]

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Zero Hedge

"This Ship Is Sinking" - The Economy Is Holed Below The Waterline

Courtesy of ZeroHedge View original post here.

Authored by Bill Blain via MorningPorridge.com,

“Until then men felt they had found the answer to a steady, orderly, civilized life. For 100 years the Western world had been at peace. For 100 years technology had steadily improved. For 100 years the benefits of peace and industry seemed to be filtering satisfactorily through society. Life was all right. The Titanic woke them up.”

...



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Kimble Charting Solutions

King Dollar Could Double Topping; Commodities Would Benefit If It Does!

Courtesy of Chris Kimble

The U.S. Dollar has been a pillar of strength for the past 12-years, at it created higher lows starting in 2008, near the 70 level. Since these lows, it has rallied nearly 50%.

The 102 level was resistance for nearly 13-years (1987 to 2000) until an upside breakout took place.

The rally over the past 12-years took it up to test the 61% retracement level of its 2001 highs and 2008 lows and the 102 level again at (1), where it created back to back monthly bearish reversal patterns in 2017.

The rally over the past 2-years has King$ testing its 61% retracement...



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The Technical Traders

Chuck Jaffe Talks Technical Analysis on Money Life - Indexes & Metals

Courtesy of Technical Traders

Chuck Jaffe, the host of Money Life, is a veteran financial journalist and nationally syndicated financial columnist whose work appears in newspapers from coast to coast. Today he talks with Chris Vermeulen.

Chuck has been named to MutualFundWire’s list of the 40 Most Influential People in Fund Distribution and was the first journalist to make the list. Over the course of his career, he has won numerous awards for business and personal finance journalism.

...

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Lee's Free Thinking

US Southern States COVID19 Cases - Let's Give Credit Where Due

 

US Southern States COVID19 Cases – Let’s Give Credit Where Due

Courtesy of  

The number of new COVID 19 cases has been falling in the Northeast, but the South is not having the same experience. The number of new cases per day in each Southern state has been rangebound for the past month.

And that’s assuming that the numbers haven’t been manipulated. We know that in Georgia’s case at least, they have been. And there are suspicions about Florida as well, as the State now engages in a smear campaign against the fired employee who built its much praised COVID19 database and dashboar...



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Chart School

Is this your local response to COVID 19

Courtesy of Read the Ticker

This is off topic, but a bit of fun!


This is the standard reaction from the control freaks.








This is the song for post lock down!







What should be made mandatory? Vaccines, hell NO! This should be mandatory: Every one taking their tops off in the sun, they do in Africa!

Guess which family gets more Vitamin D and eats less sugary carbs, TV Show



...



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Digital Currencies

Blockchains can trace foods from farm to plate, but the industry is still behind the curve

 

Blockchains can trace foods from farm to plate, but the industry is still behind the curve

App-etising? LDprod

Courtesy of Michael Rogerson, University of Bath and Glenn Parry, University of Surrey

Food supply chains were vulnerable long before the coronavirus pandemic. Recent scandals have ranged from modern slavery ...



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Members' Corner

Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking

 

Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking

No matter the details of the plot, conspiracy theories follow common patterns of thought. Ranta Images/iStock/Getty Images Plus

Courtesy of John Cook, George Mason University; Sander van der Linden, University of Cambridge; Stephan Lewandowsky...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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Promotions

Free, Live Webinar on Stocks, Options and Trading Strategies

TODAY's LIVE webinar on stocks, options and trading strategy is open to all!

Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

This week, we also have a special presentation from Mike Anton of TradeExchange.com. It's a new service that we're excited to be a part of! 

Mike will show off the TradeExchange's new platform which you can try for free.  

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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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