The lunatics are loose in the asylum

Here are a selection of excerpts in the news over the last 10 days.  Despite the fact that personal greed drove the global economy to the very brink of the precipice, it would seem that the certain sections of society still have no real links to reality and one could argue, why should they because neither society nor the law hold them accountable.

Dexia (Franco-Belgian lender) lent €1.5bn of capital to its two largest institutional shareholders so that they could buy shares in ………….. Dexia.  In a further interesting twist Dexia accepted its own shares as collateral for the loans.  “Byzantine doesn’t even begin to describe this structure” was the reaction of someone briefed on the situation.

Investment banks are using gaps in global pay reforms to persist with some of their most contentious bonus payment practices.

Despite UBS losing $2.3bn, UBS Executives said that it would not force them to rein in this years bonus payments, as it set aside nearly 90 per cent of its investment banking revenues for staff pay.

Olympus, the Japanese camera maker are struggling to explain the $687m payment to a third part ‘advisor’ on their purchase of Gyru.  This fee represented 1/3 of the total deal value.  The consulting company, registered in New York was suddenly de-registered and disappeared shortly after being paid.

High end London properties are increasingly sold off-market by vendors who do not like the thought of selling to a wealthier buyer. ( My god – what is wrong with these people?)

This doesn’t even begin to touch on the US economic & political woes who seem to impact everyone with the exception of the top 1% (by wealth) and the politicians. 

You would like to think that after a million odd years of evolution we may have evolved a little further.

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Only $2bn???

The last few days has provided interesting reading.  Poor Kweku, he has clearly fucked up.  There is debate about whether he lived a flashy lifestyle, there is discussion about what this might mean for UBS, there is discussion about risk management, but no where has there really been any discussion that puts this into context.

Consider this – there are 39 countries whose 2010 annual GDP was less than $2bn (CIA World Fact book).

$2bn would support 66,000 unemployed, uninsured Americans for a year.

or, provide education to 10 million underprivileged children for one year in Africa.

So the question really is, how can everything be so completely fucked up that when we read that poor Kweku has blown $2bn, the world essentially shrugs it shoulders and reacts in a manner that would suggest that Granny lost her purse containing her $100 pension money?  Why have we collectively learnt to tolerate this?

We are living in world that is on a knifes edge of falling of a precipice and will impact our children’s children, solely because of human avarice and greed.  In almost every country and society if a person enters your home and forcibly removes your money and valuables, people react with shock and express the pain they have suffered from having their personal space invaded and of having something forcibly removed from them.  How is it that a single profession has executed the largest theft of value in human history and we shrug our shoulders and run to the local Starbucks for our next coffee (and in the process get scalped again, but that’s a different story)?

If you think that it isn’t really about human greed and that it doesn’t really concern you, spend one minute and think properly about the quote in the FT this morning related to the impact of Kweku’s trading – “The big concern for all my UBS friends now is that they are not going to get their bonuses” 

Well fuck me.

 

“Fabulous Fab”

Earlier in this blog I have vented my spleen about investment bankers and in general hoping against hope that they all rot in hell.  Here is a small collection of  text from the emails of Fabrice Tourre, the Goldman Sachs trader to his girlfriend, Marine Serres.

“Anyway, not feeling too guilty about this, the real purpose of my job is to make capital markets more efficient and ultimately provide the U.S. consumer with more efficient ways to leverage and finance himself, so there is a humble, noble and ethical reason for my job 😉 amazing how good I am in convincing myself !!!” Tourre said in an e-mail to Serres in January 2007.

“standing in the middle of all these complex, highly leveraged, exotic trades he created without necessarily understanding all of the implications of those monstrosities!!!”

“It’s bizarre I have the sensation of coming each day to work and re-living the same agony – a little like a bad dream that repeats itself,” Tourre writes. “In sum, I’m trading a product which a month ago was worth $100 and which today is only worth $93 and which on average is losing 25 cents a day …That doesn’t seem like a lot but when you take into account that we buy and sell these things that have nominal amounts that are worth billions, well it adds up to a lot of money.”

 “When I think that I had some input into the creation of this product (which by the way is a product of pure intellectual masturbation, the type of thing which you invent telling yourself: “Well, what if we created a “thing”, which has no purpose, which is absolutely conceptual and highly theoretical and which nobody knows how to price?”) it sickens the heart to see it shot down in mid-flight… It’s a little like Frankenstein turning against his own investor ;)”

“Just made it to the country of your favorite clients!!! I’m managed (sic) to sell a few abacus bonds to widow and orphans that I ran into at the airport, apparently these Belgians adore synthetic abs cdo2,”

Shock turns to outrage

So says a headline in this Monday’s FT, describing the reaction within Goldman Sachs after digesting the news that the SEC was going to prosecute.  I can actually sympathise.  After spending countless millions in donations to American political parties and individuals, the countless diners endured, the amount of alcohol consumed, the stress of all the ‘hostesses’ who have ‘entertained’, I can understand the righteous disgust and outrage that surfaced.  You can hear it now –

” How dare they do this, don’t they know how much we have paid for this sort of thing not to happen.  This is America for god sake.  Blatant, naked all consuming greed is a god given right” !!

“Lehman file rocks Wall St”

Is the title on the front page of this Saturday’s F.T.  Makes for interesting reading, but few surprises.  Too be honest I think that the only reason that the release of this file sends shivers through Wall Street (and the global financial community) is that there is a collective paranoia that this will enable a further attack on their bonuses.  I truly wish that there is some action or event that completely fucks this bunch of self centered, avaristic, self serving, lying group of scumbags.  If I could wave a magic wand I would ensure that any investment banker that has earned bonuses greater than $250,000 per year over the last 6 years would become instantly destitute.  After 18 months of living in shelters or on the street, their job would be offerred back to them on the basis that they could only earn an income comensurate to the long term tangible value that they could generate for the business and the community,  that could be accounted for in hard cash or solid, physical investments.  Because that will never happen I can only gain a moment of pleasure by thinking to myself,  “fuck you all, may you rot in hell”.

“Tell it like it is” – pure genius!

In a recent article in the F.T. there was the following quote from Andreas Treichl, Chief Executive of Erste, one of Austria’s largest banking groups.  He was commenting on the scandal now emerging in both Germany and Austria about murky dealings of HGAA.  It is a rare example of ‘tell it like it is”.

“It’s a bunch of scumbags – in terms of banking and in terms of politics – from Austria, who have [teamed] up with scumbags from central and eastern Europe and a couple of idiots from further west, and out of this came a huge mess”.

Bloody wonderful.

The charge of the lemmings

I enjoy reading the Financial Times (FT) of late to read about the ‘shock, horror’ of Dubai World essentially being insolvent.  After all they only owe around $40b.   I am not sure if its only me, but personally I think it serves all the greedy fuckers right, who blindly put their money into a massive building bubble and then sit there expressing shock that the whole thing is about to fall apart.  “Confidence evaporates in the desert heat” is the title of one article which then goes onto describe how investors have begun to realise that “the emirate has no clothes” and the potential impact on global stock markets.  Over time, the more that I read concerning how stock markets react to what is collectively described as either ‘positive’or ‘negative’ news, the more I wonder if these people really are as stupid as the herd mentality would seem to suggest.  To date I have not read a lot that would suggest that herd stupidity seems to be the one currency that does not seem to be in short supply.  I cannot wait for another weeks stories of doom, gloom and collective wrist slashing.