• Tim Knight from...
    09/19/2014 - 20:15
    I was originally going to title this post "Jackie DeAngelis Must Die", but I thought she might take it the wrong way.

Enron

Tyler Durden's picture

Blythe Masters' Crowning Achievement: The Credit Default Swap





As reported earlier, JPM's head commodity maven, Blythe Masters (her very rare public appearance can be seen here) suddenly finds herself in hot water for, among other things, allegedly lying under oath, obstructing justice and "engaging in a systematic cover up" to "approve schemes" seeking to defraud the states of California and Michigan in electricity trading (Enron flashbacks are more than welcome). So just who is Blythe? Most people on this site should be very familiar with her work by now (the NYT has a good recap), so instead of reconnecting the dots, we will once again dig up the presentation by one very young Ms. Master, introducing her then quite innovative product: the Credit Default Swap, titled appropriately enough "The J.P.Morgan Guide To Credit Derivatives" (by Blythe Masters). Because it is always best to let one's work speak.

 
Tyler Durden's picture

Will JPMorgan's "Enron" Be The End Of Blythe Masters?





One year after the infamous Jamie Dimon "tempest in a teapot" fiasco, which promptly turned out to be the biggest TBTF prop-trading desk debacle in history, things were going well for JPMorgan. On one hand, the chairman of the TBAC (and thus US Treasury advisor and policy administrator), and former LTCM trader, Matt Zames, was just recently promoted to the sole second in command post at the biggest US bank (and 2nd biggest in the world) by assets, and first in line to take over from Jamie Dimon. On the other hand, one of Mary Jo White's former co-workers, and a JPM defense attorney from Debevoise just became head of the SEC's enforcement division, in theory guaranteeing that the US government would never do more than slap the wrist of JPM in perpetuity. And then, when everything seemed like smooth sailing ahead, the Federal Energy Regulatory Commission (FERC) showed up on March 13, the day before Carl Levin's committee released its latest report on JPM's prop trading blunder, and according to the NYT, alleged that JPM in the past several years, quietly became nothing short than the next Enron. ... But what is worst for JPM, and its brilliant (abovementioned) employee, often times credited with creating the Credit Default Swap product and market (simply an instrument to trade credit with negligible upfront collateral and thus allow equity option-like speculation in the credit realm), is that FERC may be seeking to throw the book at none other than Blythe Masters.

 
Tyler Durden's picture

Frontrunning: April 5





  • George Soros: 'What Japan is doing is actually quite dangerous because" (BBG)
  • North Korea lacks means for nuclear strike on U.S., experts say (Reuters)
  • Yellen latest to hint about slowing of QE3 (FT)
  • Hollande approval rating hits new low (FT)
  • Hollande Dismisses Reshuffle as Crisis Hits Popularity (BBG)
  • Japan Upper house approves full 5 year term for BOJ gov. Kuroda (BBG)
  • US: Plan to Cap Tax Breaks Is Gaining Steam (WSJ)
  • BOE Says Investors May Be Taking ‘Too Rosy’ a View of Stress (BBG)
  • Kiwis Say ‘Ni Hao’ as China Ties Trump Australia Sales (BBG)
  • Obama Avoids Trading Threats With North Korea’s Kim (BBG)
 
Tyler Durden's picture

Eric Holder Gets Busy: Enron's Skilling May Be Released From Prison Over A Decade Early





Former Enron CEO Jeff Skilling may be the latest beneficiary of the culture of pervasive permitted, even at times encouraged, crime. After being sentenced to prison for 24 years in the aftermath of Enron's spectacular 2001 bankruptcy, the former CEO may be released after serving well less than half of his term. As a result his prison term, which scheduled to end in 2028, may be cut by more than half as a result of a new agreement with the Department of Justice. It appears that AG Eric Holder is so busy not prosecuting Wall Street for being Too Big To Prosecute, he has decided it is far wiser to spend his time productively by commuting the sentences of convicted financial felons, because apparently there is nothing more important to do.

 
EconMatters's picture

Physical Delivery Needed in Agriculture & Energy Markets





Market Reform is required for futures market like agriculture and energy to avoid the Hedge Fund and Big Bank Malfeasance. 

 
EconMatters's picture

Netflix & SEC: Not a Fascinating Social Media Story At All





Most people are missing the boat regarding the Netflix/SEC tangle as the more relevant issue is the seemingly “selective disclosure” on Facebook by the Netflix CEO.

 
lemetropole's picture

James McShirley: There is no doubt the past month has been a pre-planned, coordinated attack on gold and silver.





Something BIG surely must be coming to justify the ferocity of the cartel. We will wait and see, and wonder where they are getting the physical to pull this off. Non-physical gold investors may come to better understand the phrase "getting Corzined".

 
Tyler Durden's picture

Frontrunning: November 28





  • Egypt protests continue in crisis over Mursi powers (Reuters)
  • Greece hires Deutsche, Morgan Stanley to run Greek voluntary debt buy back, sources say (Kathimerini)
  • Executives' Good Luck in Trading Own Stock (WSJ)
  • Hollande Presents Mittal Nationalization Among Site Options (Bloomberg)
  • Eurozone states face losses on Greek debt (FT)
  • Spain's rescued banks to shrink, slash jobs (Reuters)
  • EU Approves Spanish Banks' Restructuring Plans (WSJ)
  • At SAC, Portfolio Managers Are Treated Like Stocks (BBG)
  • China considers easing family planning rules (Reuters)
  • European Court to Rule Over ECB’s Secret Greek File (BusinessWeek)
  • And another top tick indicator: Asia Funds Buy London Offices in Bet Volatility Is Past (Bloomberg)
  • Harvard Doctor Turns Felon After Lure of Insider Trading (BBG)
  • Zucker Is Lead Candidate to Head CNN (WSJ) - it's not true until CNN misreports it
  • Iran "will press on with enrichment:" nuclear chief (Reuters)
 
Tyler Durden's picture

Guest Post: Real Danger Of “Obamacare”: Insurance Company Takeover Of Health Care





Now that The Show is over, we are left with the equivalent of a Sunday morning hangover following a binge of promises and lies. After the Supreme Court upheld the PPACA, a spate of mergers rippled through the managed health care realm, to ostensibly cope with smaller profit margins and  ‘compliance costs.’  But really, it’s because each firm wants to corner as much as possible of the market, in as many states as it can, to garner more premiums and control more disbursements and prices at the upcoming insurance ‘exchanges.’ Meanwhile the more hospitals are viewed as profit centers, the more their Chairmen will cut costs to maximize returns, and not care quality. They will seeks ways to sell underperforming assets, programs or services and reduce the number of nonessential employees, burdening those that remain. And if insurance companies can manage doctors directly, they can control not just costs, but treatment – our treatment. It’s not an imaginary government takeover anyone should fear; but a very real, here-and-now insurance company takeover, to which no one in Washington is paying attention.

 
Tyler Durden's picture

Barclays Fined Record Amount For Channelling Enron, Manipulating California's Electricity Market





It just is not Barclays' year. After being exposed (so far the only one) as a ringleader in a massive LIBOR-rigging scandal which cost Bob Diamond his job, yesterday the British bank added insult to injury, after the Federal Energy Regulatory Commission (FERC) fined it $470 million - the largest penalty ever levied by the energy regulator, and even larger than the bank's LIBOR fine - for getting caught doing what Enron got caught doing about a decade ago: manipulating California's electricity markets. Although while the former ended up being the biggest corporate bankruptcy at the time, led to the end of one of the nation's largest auditors and sparked a scandal so great it was all corporate America spoke for about for the next year, this time the news has come and gone, and nobody cares. Perhaps this is to be expected: in a time when none other than the central bank intervenes each and every day in every single market to preserve the "wealth effect", habituation to epic corporate manipulation of every imaginable kind is perfectly normal.

 
Tyler Durden's picture

The Top 15 Economic 'Truth' Documentaries





On a regular basis we are placated by commercials to satisfy our craving to know which bathroom tissue is the most absorbent; debates 'infomercials' assuaging our fears over which vice-presidential candidate has the best dentist; and reality-shows that comfort our 'at least I am not as bad as...' need; there is an inescapable reality occurring right under our propagandized nose (as we noted here). Economic Reason has gathered together the Top 15 'reality' economic documentaries - so turn-on, tune-in, and drop-out of the mainstream for a few hours...

 
George Washington's picture

America – and Western Civilization As a Whole – Was Founded On a Conspiracy Theory





The Constitution, Magna Carta and Democracy Itself Are Based on the Idea that – Without Checks and Balances – Those In Power Will Take Advantage of Us

 
Tyler Durden's picture

On Wall Street Crime Pays - A 350% IRR To Be Exact





Previously we showed that when it comes to Wall Street's returns, the 8% market return benchmark that every first year analyst finds in Ibbotson's is for naive amateurs. With corporate lobbying returning anywhere between 5,900% and 77,500%, the real money is to be made in the buying and selling of politicians. Yet in our day and age, when information propagates rapidly and when political muppets can be exposed for the Wall Street purchased frauds they are, lobbying is getting increasingly more complicated. Which leaves one other high returning "investment", which unlike lobbying is completely riskless when one is a Wall Street firm: crime. But not just any crime, the type of crime where a firm settles "without admitting or denying guilt" and in the process is slapped with a fine that barely covers the government's legal fees. Case in point: U.S. v. Morgan Stanley, U.S. District Court, Southern District of New York Case #11-6875, where MS was punished with the epic disgorgement penalty of $4.8 million. Of course, the fact that Morgan Stanley, who did not admit wrongdoing, generated profits of $21.6 million, is merely a triviality. But a useful one: it allows to calculate that on Wall Street crime does pay, and the IRR is in give or take 350%.

 
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