Meltdown

"As Nobel-prize winning physicist Richard Feynman observed, to call these numbers
“astronomical” would be to do astronomy a disservice: there are only hundreds of billions of
stars in the galaxy. “Economical” might be a better description. It is clear that banks would not have deep enough pockets to foot this bill. Assuming that a crisis
occurs every 20 years, the systemic levy needed to recoup these crisis costs would be in excess of
$1.5 trillion per year. The total market capitalisation of the largest global banks is currently only
around $1.2 trillion. Fully internalising the output costs of financial crises would risk putting
banks on the same trajectory as the dinosaurs, with the levy playing the role of the meteorite." Andrew Haldane, Executive Director Bank of England

Bait and switch ...

Since Congress, the Senate and the president are all powerless to prevent the looting of the middle-class, it is only fitting that Jon Stewart will give it a try. When common sense, logic and reasoning all fail to make a dent in the status quo of immaculate corruption, maybe at least humor will have some success.

Most relevantly, Jon asks the $64k question: "Are our banks made of balsa wood held together by baby tears."

…wait until you see what’s in the cards for commercial real estate. That’s right, the next train wreck will be in commercial real estate. Couldn’t be worse than last year’s residential market crash? That remains to be seen. But it’s coming soon, probably as early as the second quarter of next year, and there’s nothing that can prevent it. The government will intervene, trying desperately to delay the day of reckoning, and may even succeed. For a while. But make no mistake about it, that train is going off the tracks no matter what.

One of the foremost experts on structured finance and derivatives presents a holistic overview of not only the current economic fiasco, and in 10 brief minutes with Max Keiser she provides more succinct, unbiased and relevant information that most pundits are able to convey in years on and off TV, but also highlights the bigger problem of how the administration keeps treating the US public as a bunch of stupid infants, throwing paper blankets over raging systematic fires that are anything but doused. And yet, the administration's ploy so far is successful, unfortunately speaking volumes about the intellectual rigor of the average American.

Phil Angelides has a mission, and $5 million- to head a congressionally appointed panel and deliver a "no-holds barred" investigation into last year's economic collapse, including whether financial firms and government regulators were guilty of criminal misconduct.

"Lime's familiarity with high speed trading allows us to benchmark some of the fastest computer traders on the planet, and we have seen CDT (Computerized Day Trading) order placement rates easily exceed 1,000 orders per second. Should a CDT algorithm go awry, where a large amount of orders are placed erroneously or where the orders should not have passed order validation, the Sponsor will incur a substantial timelag in addressing the issue. From the moment the Sponsor’s representative detects the problem until the time the problematic orders can be addressed by the Sponsor, at least two mintues will have passed. The Sponsor’s only tools to control Sponsored Access flow are to log into the Trading Center’s website (if available), place a phone call to the Trading Center, or call the Sponsee to disable trading and cancel these erroneous orders – all sub-optimal processes which require human intervention. With a two minute delay to cancel these erroneous orders, 120,000 orders could have gone into the market and been executed, even though an order validation problem was detected previously. At 1,000 shares per order and an average price of $20 per share, $2.4 billion of improper trades could be executed in this short timeframe. The sheer volume of activity in a concentrated period of time is extremely disruptive to the process of maintaining a “fair and orderly” market. This shortcoming needs to be addressed if the practice of Naked Access is going to be permitted to continue; otherwise, the next “Long Term Capital” meltdown will happen in a five-minute time period."

Highly informative C-Span interview with Janet Tavakoli to go with the morning coffee.

The man who had lent Bill Clinton his chopper, was found dead on Monday in an apparent suicide. Patrick Rocca, 41, died from a single gunshot to his head in his home in Holmeleigh, an exclusive residential enclave on the edge of Dublin's Castleknock Golf and Country Club.

The man who had lent Bill Clinton his chopper, was found dead on Monday in an apparent suicide. Patrick Rocca, 41, died from a single gunshot to his head in his home in Holmeleigh, an exclusive residential enclave on the edge of Dublin's Castleknock Golf and Country Club.

Financials all over the world received the Friend-O treatment today....repeatedly. XLF financial index hits all time low.

Financials all over the world received the Friend-O treatment today....repeatedly. XLF financial index hits all time low.