Funds - Weekly Market Comment: The Heart of the Matter - June 11, 2012. June 11, 2012 The Heart of the Matter John P.
The uptick's downside. Rio De Janeiro, Brazil - Since late last year, a series of positive developments has boosted investor confidence and led to a sharp rally in risky assets, starting with global equities and commodities.
Macroeconomic data from the United States improved; blue-chip companies in advanced economies remained highly profitable; China and emerging markets slowed only moderately and the risk of a disorderly default and/or exit by some members of the eurozone declined. Moreover, under its new president, Mario Draghi, the European Central Bank appears willing to do anything necessary to reduce stress on the eurozone's banking system and governments, as well as to lower interest rates. Central banks in both advanced and emerging economies have provided massive injections of liquidity. The Final Countdown. Submitted by Tim Price, Director of Investment, PFP Wealth Management courtesy of Sovereign Man The Final Countdown “Under the circumstances, discussions with Greece and the official sector are paused for reflection on the benefits of a voluntary approach.”
Debt talks “have not produced a constructive response.” Weil: Why Zombie Banks Hate to Write Off Bad Loans. There’s a simple explanation for why the world’s zombie banks remain so reluctant to write off worthless assets and tap the equity markets for fresh capital.
They don’t want to end up like UniCredit SpA. This month has been a nightmare for the Italian bank’s shareholders. Since embarking last week on a 7.5 billion euro ($9.7 billion) stock sale at a steep discount to its Jan. 3 closing price, UniCredit shares have fallen 39 percent to 2.56 euros. The Worldwide Depression/Recession Of 2012. Simon Johnson: 'We Are Looking Straight Into The Face Of A Great Depression' By Mark Harrison, CFA In the opening session of the fourth annual CFA Institute European Investment Conference today in Paris, MIT Sloan School of Management professor Simon Johnson didn’t equivocate on the perils of the current global economic environment.
“We have built a dangerous financial system in the United States and Europe,” said the former chief economist at the International Monetary Fund. “We must step back and reform the system.” Professor Johnson cited alarming parallels with October 1931, when “people thought the worst was behind them, but the smart people were wrong and instead the crisis just broadened.” Johnson began his talk by pointing to the recent failure of MF Global (MF) as good news because it “barely caused a ripple in markets, despite its $40 billion balance sheet.” Johnson says these large institutions get a 50 basis point benefit on their debt costs from the implicit U.S. government guarantee.
Fault Lines... Have We Avoided A Recession? - December 4, 2011. December 4, 2011 Have We Avoided A Recession?
John P. MF Global warning: Financial markets have not been fixed. The October 31 bankruptcy of MF Global Holdings Ltd., a broker-dealer on Fifth Avenue in New York City, is important news for all Americans because it is a warning: The Dodd-Frank Act, which Congress passed 16 months ago to protect Americans from another financial crisis, is not working.
Instead, one thing that does seem to protect Americans is size. The MF Global bankruptcy was triggered by one of the same key Wall Street gambles that rocked Bear Stearns & Co., Lehman Brothers Holdings and others in 2008 and froze credit markets, that brought Long-Term Capital Management hedge fund to its knees in 1998 and Orange County in 1994, and that threaten European banks today: Repurchase (repo) loans. These nuclear weapons are still as dangerous as ever. Yet MF Global’s 2008-style failure – while tragic for its employees (2,894 on September 30), investors, clients, suppliers, and others – is having little impact on Main Street. MF Global and the great Wall St re-hypothecation scandal. Back to Current Awareness Your source for up-to-the-minute insights and analysis that matter to you.
Revisiting Rehypothecation: JP Morgan Markets Its Latest Doomsday Machine (or Why Repo May Blow Up the Financial System Again) Second MF Global Unveiled As Canadian Regulator Accuses Barret Capital Of Commingling Client Funds. When we learned of the MF Global client theft scandal, in the aftermath of its sudden bankruptcy filing, the one thing we predicted would happen (in addition to Jon Corzine never going to prison) was that many more brokers, banks and broadly financial intermediaries would be discovered having dipped in client accounts, or otherwise "commingled" capital in direct violation of the first rule of banking.
Sure enough, a little over two months since, the second notable company to have been alleged to have abused client capital for own purposes has emerged. And it comes to us courtesy of sleep Canada whose "banks are all fine. " Goldman, et. al. Suffer From The Same Malady That Collapsed Lehman and MF Global, Worlds 1st and 8th Largest Bankruptcies! On MF Global, Hyper-Hypothecation That Creates $6b Out $2B And A Central Bank That Couldn't See A Bankruptcy Staring It In The Face. Why The UK Trail Of The MF Global Collapse May Have "Apocalyptic" Consequences For The Eurozone, Canadian Banks, Jefferies And Everyone Else. AC2011 Session 1.2 Come Undone: Kyle Bass redux. Men prefer a false promise to a flat refusal. Squids, Morgans & Counterparty Risk: Blowing Up The World One Tentacle At A Time. Why Central Planning Has Doomed Us All. El-Erian warns - macrobusiness.com.au.