Cale In The Keys » lunatics

This Week’s Sign the Lunatics Are Running The Asylum

Cale — Wed, 12 May 2010 14:32:30 +0000

It’s official. Four big Wall Street banks pitched perfect games last quarter.

The trading departments of Bank of America, Goldman Sachs, JPMorgan Chase and Citigroup each finished the first quarter of this year having made money every single day. According to their SEC filings, their traders did not lose a single penny on a single day the whole quarter. For 61 days in a row. All four of them. Really.

Now I haven’t determined the actual probability of that occurring in a truly free market, but I’m going to guess that it’s indistinguishable from 0.0000. That is, there is zero chance these guys are really that good. (See TARP, 2008.)

But when you’re acting like some kind of emerging market oligopoly, screwing over your own clients and letting computers trade for you, apparently it is just that easy. And as I’ve said before, investors beware. These big banks are lousy businesses. They have no sustainable moats. After all, it wasn’t one bank but four of them that just threw perfect games.

There’s more in this article from the NY Times – although it inexplicably fails to raise the question, “How exactly did this occur?”

This gentleman’s quote pretty much summed it up:

“This is just, as we call it, milking the market and your captive client base.”

Exactly, dear sir. This has nothing to do with talent or being a steward of wealth.

Unbelievable, isn’t it?

This Week’s Sign the Lunatics are Running the Asylum

Cale — Thu, 06 May 2010 22:34:22 +0000

“Citigroup is investigating a rumor that one of its traders entered a trade that helped precipitate a drop of almost 1,000 points in the Dow Jones Industrial Average, a spokesman for the bank said on Thursday.”

Developing story. More here. But I’m afraid I’m just not buying the “dumb trader” excuse. It’s not like he mistakenly added an extra zero before hitting the return key. More likely, if there was indeed an error, the odds seem high that it would be related to high frequency trading.

Ah, Wall Street. Don’t be so afraid to be competent!

And wasn’t there a movie about this sort of thing?

This Week’s Sign the Lunatics Are Running the Asylum

Cale — Sat, 24 Apr 2010 10:29:07 +0000

I suppose this may explain why it took 3 years for the SEC to file its suit against Goldman.

“SEC staffers watched porn as economy crashed.“

This Week’s Sign The Lunatics Are Running the Asylum

Cale — Sat, 13 Feb 2010 14:02:45 +0000

This week the Mortgage Banker’s Association, a group that represents 2,400 real estate finance companies in Washington, DC, was forced into a rather embarrassing situation on its own mortgage.

The MBA sold its headquarters building on a short sale for $41.3 million…a little more than half the $79 million it originally financed in 2007.

I’m not sure how they could even attempt to spin that. Sums up this mortgage crisis pretty well, though, don’t ya think?

This Week’s Sign the lunatics are running the asylum

Cale — Tue, 24 Nov 2009 13:00:57 +0000

An insightful Bloomberg video about the number of Wall Street lobbyists currently swarming over D.C.:

Here are some highlights:

That last one, ICI, is the lobbying arm of the mutual fund industry.

The summary:

H/t Tyler Durden and Shopyield.com.