OTC

Tyler Durden's picture

Guest Post: Enron Redux – Have We Learned Anything?





Greed; corporate arrogance; lobbying influence; excessive leverage; accounting tricks to hide debt; lack of transparency; off balance sheet obligations; mark to market accounting; short-term focus on profit to drive compensation; failure of corporate governance; as well as auditors, analysts, rating agencies and regulators who were either lax, ignorant or complicit. This laundry list of causes has often been used to describe what went wrong in the credit crunch crisis of 2008-2010. Actually these terms were equally used to describe what went wrong with Enron more than twenty years ago. Both crises resulted in what at the time was the biggest bankruptcy in U.S. history — Enron in December 2001 and Lehman Brothers in September 2008. Naturally, this leads to the question that despite all the righteous indignation in the wake of Enron's failure did we really learn or change anything?

 


Tyler Durden's picture

Gold And The Endgame: Inflationary Deflation





Excessive monetary stimulus and low interest rates create financial bubbles. This is the biggest debt bubble in history. It is a potent deflationary force and central banks are forced into deploying increasingly aggressive (offsetting) inflationary forces. The avoidance of a typical deflationary resolution to this economic long (Kondratieff) wave is pushing the existing monetary system beyond the point of no return. The purchasing power of the developed world’s currencies will have to bear the brunt of the “adjustment”. Preparations for this by the BRICS nations, led by China, are advancing rapidly. The end game is an inflationary/currency crisis, dislocation across credit and derivative markets, and the transition to a new monetary system. A new “basket” currency is likely to replace the dollar as the world’s reserve currency. The “Inflationary Deflation” paradox refers to the coming rise in the price of almost everything in conventional money and simultaneous fall in terms of gold.

 


Tyler Durden's picture

10 Reasons Why Sharknado Is Coming To The Global Economy





Have you ever seen a disaster movie that is so bad that it is actually good? Unfortunately, we are witnessing something just as ridiculous in the real world right now.  In the United States, the mainstream media is breathlessly proclaiming that the U.S. economy is in great shape because job growth is "accelerating" (even though we actually lost 240,000 full-time jobs last month) and because the U.S. stock market set new all-time highs this week.  The mainstream media seems to be absolutely oblivious to all of the financial storm clouds that are gathering on the horizon.  The conditions for a "perfect storm" are rapidly developing, and by the time this is all over we may be wishing that flying sharks were all that we had to deal with.

 


Capitalist Exploits's picture

Take Me Public!





Company founders routinely get shafted by "promoters" and get sold on taking their pride and joy public. Watch out for them!

 


CalibratedConfidence's picture

Moral Hazards And Dangers To Market Stability





Now, after the Fed's generosity caused by "a decoupling of the 'real' economy from the financial economy with its lavish creation of fictitious wealth...

 


Pivotfarm's picture

Move Over Marx, Here Comes Obama





Ronald Reagan would be turning in his grave, wouldn’t he? In what became known as the most anti-communist speech of all time given by Reagan in 1987 on the 70th anniversary of the Bolshevik Revolution (1917), the former President of the United States of America said that the Soviet Union was the ‘evil empire’.

 


Tyler Durden's picture

G-20 Releases Statement On Japanese Devaluation (But Nobody Mention The Yen)





Two days in Washington D.C. kept caterers busy but produced a 2,126 word communique long on slogans and short on anything actionable. The G-20 statement (below) can be boiled down simply, as we tweeted,

And just to add one more embarrassing detail for them, while section 4 discusses "Japan's recent policy actions," not only does Canada's finance minister James Flaherty believe they "didn't discuss the Japanese Yen," but Japan's Kuroda believes, comments on 'misalignments', "were not meant for the BoJ."

 


Reggie Middleton's picture

Oh No! Is It Possible? A 3rd Irish Bank With Hidden Charges Not Revealed In Its Annual Reports?





How many important (or worse yet, systemically important) banks can fail to disclose pertinent debt info before it becomes evident that the tax payer/depositor/regulators/stress tester realizes they don't know the Irish banking system's true condition? 

 


Tyler Durden's picture

"Too Big To Regulate" JP Morgan "Lied" And "Deceived" Regulators, Investors And Public, Senate Finds





Moments ago, ahead of tomorrow's 9:30 am Senate hearing on JP Morgan's 2012 attempt to corner the IG9 market through its London-based CIO office using depositor cash which as everyone now knows went horribly wrong, titled "JPMorgan Chase Whale Trades: A Case History of Derivatives Risks and Abuses,” the Permanent Subcommittee on Investigations has released its comprehensive 300 pages review of the London Whale fiasco. The report, in a nutshell, finds that both Jamie Dimon and JP Morgan lied and misled investors, regulators and Congress, that it forced its traders to hide growing losses, that it hid trades banned by the Volcker rule (just as we first said in April 2012 in "Why JPM's "Chief Investment Office" Is The World's Largest Prop Trading Desk: Fact And Fiction") and that JP Morgan may, by extension, be "too big to manage" or "too big to regulate" as Carl "Shitty Deal" Levin summarized.

 


Tyler Durden's picture

Overnight Futures Levitation Returns





If the last three days were spared an overnight ramp in US futures, today this has not been the case as the new carry pairs of choice, the USDJPY and EURJPY, have seen constant gradual levitation overnight, pushing the correlated US OTC markets higher and setting the stage for the tenth consecutive, and perfectly artificial, Dow Jones increase. It is notable just how broken the old direct EURUSD-ES correlation is in times when correlation desks can offset selling pressure by shorting Yen and obtain local funding. That said, even the USDJPY appears to have stalled out in the low/mid 96 range - it is unclear what the catalyst pushing the Yen much lower will be, as virtually all rhetorical ammunition used by the BOJ and its affiliates, has by now been well and truly used up, and the daily talkdown sessions are merely a regurgitation of previous talking points.

 


rcwhalen's picture

CCAR | Stress Test Follies & Zombie Banks





As Morpheus said to Neo in the film The Matrix:  You still think that is air you are breathing?

 


Tyler Durden's picture

How VIX ETFs Help To Crush Vol And Ramp Risk Every Day





There are underlying options on the S&P 500 that trade on exchange or OTC (depending on size and strike and margin package - arb or outright). On top of that set of options lies a world of futures and options on a 'created' VIX (that are predicated on the implied vols of the underlying S&P options). And to top it all off - the wonderful world of Exchange Traded Products (ETPs) overlays various levered and unlevered short and long products for retail (and professionals) to speculate on (and some have their own compound options). As you can tell - there is a large amount of 'flow' impacting up and down the chain in this vol landscape.

 


rcwhalen's picture

But Do We Really Want Smaller Zombie Banks?





The problem with “too-big-to-fail” is first and foremost the behavior of our beloved political leaders in Washington

 


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