July 2009

A very good piece from The Globe and Mail, it’s an old interview with Niall Fergusen (from April) where he isn’t too optimistic about the length of the economic crisis.

The global crisis is far from over, has only just begun, and Canada is no exception, Mr. Ferguson said in an interview…

Policy makers and forecasters who see a recovery next year are probably lying to boost public confidence, he said. And the crisis will eventually provoke political conflict, albeit not on the scale of a world war, but violent all the same.

There will be blood, in the sense that a crisis of this magnitude is bound to increase political as well as economic [conflict]. It is bound to destabilize some countries.

And he concludes with this bit…

We just don’t have an improvement of standard of living of the sort we’re grown used to. And indeed if you have a more equitable redistribution through the tax system, which Obama is committed to, it might actually be no discernible downside for middle America and lower-class Americans. So many of the benefits of the boom went to the elites. If you have a lost decade plus redistribution, it may not be that dramatic a change for many, many people. People just have to get over the fact that their wealth wasn’t worth what they thought it was in 2006. Whether it’s their stock market portfolio or their housing. If we simply go back to where we were, in 2005, that’s surely not the worst thing that could happen to us.?

Also noteworthy is his comments about how much political power has been ceded back to congress from the executive branch. I guess that’s what happens when a legislator is elected to the presidency… he still has his legislative mentality.


Hilarious! From The King Report via Ritholtz (emphasis mine):

We are stunned ? no, we?re shocked, shocked over the following admission from an Assistant US Attorney about the theft of Goldman?s proprietary trading codes.

BN: At a court appearance July 4 in Manhattan, Assistant U.S. Attorney Joseph Facciponti told a federal judge that Aleynikov?s alleged theft poses a risk to U.S. markets. Aleynikov transferred the code, which is worth millions of dollars, to a computer server in Germany, and others may have had access to it, Facciponti said, adding that New York-based Goldman Sachs may be harmed if the software is disseminated.

?The bank has raised the possibility that there is a danger that somebody who knew how to use this program could use it to manipulate markets in unfair ways,? Facciponti said, according to a recording of the hearing made public today. [The prosecutor apparently does not understand the implications of his statement but most of The Street and much of the public do.] http://www.bloomberg.com/apps/news?pid=20601087&sid=ajIMch.ErnD4

Karl Denniger: Did Assistant US Attorney Facciponti make an erroneous statement, or did he just lay a nuclear egg on the table, step back, and set it off – on accident – admitting in open court that the software in question ?can be used to manipulate markets?? http://market-ticker.denninger.net/authors/2-Karl-Denninger

Zero Hedge: At least it is refreshing that none other than Goldman?s own de facto attorney admits that the firm has created a piece of code that permits ?market manipulation.?

Nice animated, graphical work over at Tip Strategies to cover unemployment across the US over the last few years…

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Nicholas Nassim Taleb catches flack from time to time for being a perma-bear. One of my friends even complains that he doesn’t think Taleb is worth listening to because we don’t know if he has made money off his views and predictions, specifically with the hedge fund where he is a principal.

I watched the video below, and it’s obvious to me that Taleb is not a trader, nor does he claim to be. What is he then? A philosopher of sorts, it is very clear he is interested most in being epistemologically honest.

In the video Taleb does make an interesting comment… if someone points to a house and says it is structurally unsound, does it matter if it falls down a minute later, or 10 years later? The house was unsafe.

He obviously takes the same idea with the economy or the markets — if it is unsafe, it doesn’t really matter if the market goes up at times… even for years at a time. That’s an idea that is antithetical to most traders, but traders don’t focus on the same things that philosophers do.

It’s also fun to watch the CNBC talking heads completely flummoxed and unsure how to even ask him questions.

Video via Ritholtz.

Just found this, thought I’d share… Interactive Brokers (IB) has some free widgets (for both windows and mac) that gives you easy access to simple option tools. They basically help with the basics / fundamentals, but that is still pretty cool.

Download them for free here.

They would be cooler if the options calculator would automatically fill with option prices, but you have to have an IB account to have access to that stuff (it is available within IB’s trading platform).

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