Bonus Bananas November 11, 2011

My apologies for the lateness of this post today, gentlemen. I was at a Marine Corps birthday bash last night, and needless to say I'm a little, ahem, under the weather today. And yes, that's a picture of your old Uncle Eddie in his dress blues at 18. Happy Veterans Day. On to the bananas:

1) Lehman Brothers' first share fetches small fortune (BBC News) - The first share of Lehman Brothers stock sold when the firm went public in 1994 used to hang in Dick Fuld's office. The certificate (numbered LB 001) sold at auction this week for $33,000 to a collector who considers it the "ultimate document" of the financial crisis.

2) Finally, a Judge Stands up to Wall Street (Rolling Stone) - I'm gonna give you fair warning here: Citigroup is gonna have a rough week on Bonus Bananas. And it's well deserved for America's premier zombie bank. This piece is Taibbi's latest and it tells the story of how the SEC's most recent slap on the wrist for Citi was thrown out of court for not being nearly severe enough.

3) Outspoken analyst's new book blasts Wall Street (Fosters) - Mike Mayo's new book Exile on Wall Street is a great read, and there's no love lost between Mayo and Citigroup. He's rough on the entire banking sector, but he devotes two complete chapters to the disaster that is Citigroup, and he outlines the pattern of reckless disregard for risk management that has been Citigroup's hallmark since its founding.

4) MF Global Customers Can’t Get Cash or Answers (Bloomberg) - MF customers are screwed blue and tattooed. What money is left is frozen, and the SIPC is leaning towards not covering funds in futures accounts. To give you an idea of how bad this is: it's like putting your prized Rolex in a safe deposit box and then having the bank go out of business. No big deal, right? Just let me go in and get my watch. No can do. Not only won't we let you in to get your watch, we're not even sure it's still there.

5) MF Signs Death Warrant for Short-Term Funding (Businessweek) - Former Lazard banker and JP Morgan Chase MD William D. Cohan explains how the demise of MF Global may be the end of overnight lending, and if it isn't, it should be. He also brings of Jefferies' recent brush with death and the hand that overnight lending had in that. Pretty scary stuff, actually.

6) Jefferies Basically Slashed Its PIIGS Exposure By Half (Business Insider) - Speaking of Jefferies, the firm slashed it's European exposure in half this week in response to the crisis at the bank. This really makes you think that Cohan has a point: investment banks are far too dependent upon overnight lending when the threat of losing it forces a major move like this.

7) Want a rally? Start rooting for banks (MSN Money) - That we can't have a lasting recovery, or even an economy period, without the banks is a no brainer. But for things to function as they should, banks need to operate like utility companies and quit trying knock it out of the park quarter after quarter. There's a reason Bank of America and Citigroup are down 90% in the past three years. Outsized growth means outsized risk, and in banking the results of outsized risk are entirely predictable.

8) US wealth gap between young and old is widest ever (Associated Press) - Hat tip to UFOInsider for this one. If this doesn't piss you off as young workers, I don't know what will. More wealth is concentrated in the hands of the elderly now than ever before in our nation's history. And here's a newsflash for you: the old people in this country aren't doing you any favors.

9) Penn State Scandal: Jerry Sandusky Rumored To Have 'Pimped' Boys To Donors (Huffington Post) - The whole Penn State thing is shocking and disgusting, to the point of being almost unbelievable. But if it's proven that children were being pimped out to rich Penn State donors, the entire school should be shut down. It is becoming increasingly difficult to believe that everyone at the top didn't at least know about Sandusky, and for that they should all be fired, and if possible, prosecuted.

10) Detroiters Launch Petition Against Nickelback Halftime Show, Thousands Sign (CBS News) - Okay, this one just cracked me up. How bad does it suck to be Nickelback? Apparently not as bad as it sucks to listen to Nickelback. The city of Detroit has banded together to bar Nickelback from playing during their Thanksgiving Day halftime show. Best comment: "Hasn't Detroit suffered enough?" Hilarious.

The Video of the Week this week will probably appeal to all the hockey fans on WSO. It's the Red Band trailer for the new movie Goon, though I'm afraid it's going to be a weak attempt at re-making the classic Slap Shot. Still, it looks funny so I'll probably see it. Enjoy:

And for those who haven't seen Slap Shot, please, for the love of God, do so immediately:

As always guys, have a great weekend and let me know what you think about this week's bananas in the comments.

 
Edmundo Braverman:
JamesHetfield:
No way that is you. Can not be.

LOL. The years have not been kind.

This about sums it all up.

You're born, you take shit. You get out in the world, you take more shit. You climb a little higher, you take less shit. Till one day you're up in the rarefied atmosphere and you've forgotten what shit even looks like. Welcome to the layer cake, son.
 

The MF global thing is going to be a tough time for retail brokers. Every day, I log in to check my Fidelity account. My stocks make and lose money, but they're all there. It's a cash account and my assumption is that I have a set of stock certificates that get deposited in Fidelity's vault.

I am honestly wondering if it's safer to just take delivery of the certificates.

 

Eddie, I'm pretty deep into Mike Mayo's book, per your suggestion, and it's great. His chapters on Citi are pretty eye opening and left me with a foul taste in my mouth. It's a decently quick read with some interesting suggestions on how to fix the problems of the banking sector. Good stuff.

 
Best Response

Nice digs on the movie, looks a little unbelieveable (letting two guys out of the box to duke it out???) but I'm going to see it anyway.

7 makes me wonder if, as a civilization, we want a rally. Consumer debt to savings ratios are climbing, frivolous spending is decreasing, and it looks like we may actually make headway on fully restructuring the overall system so that it's sustainable. Based on the last decade, it seems that red-lining all systems all the time just creates a mess for the next generation to clean up; kinda like my gripe with article 8. "I got mine, now fuck you" is a pretty shitty governing principle. Now if only I can kill my concience I'd be a billionaire...and figuratively speaking the little fucker just won't die no matter what I do to it.

It seems there are two distinct lines of reasoning in finance A) motherfucking smash and grab baby and B) build wealth over a lifetime.

Get busy living
 
In The Flesh:
8. So much for the aging baby boomers of the "me" generation putting themselves first. By doing that, they're messing the rest of us up. Truly despicable.

How do you propose to solve said problem?

I only bring it up because that is the ideal that many Americans believe in (personal liberty, Locke model society, capitalism, etc.) as well as most of the monkeys on this site.

"History doesn't repeat itself, but it does rhyme."
 

8. They're often called the "greatest generation" but they might eventually go down in history books as the generation that bankrupted western civilization.

Yes they paid some mighty painful dues but they set themselves up for a pretty sweet deal in the end. Pensions, social security, medicare, real estate appreciation - all theirs. Bullshit fiat currency, runaway devaluation of the dollar, staggering income tax rates - done on their watch. Plus, why do you think your health insurance is so damn expensive? You go to the doctor once every two years. It's because you're subsidizing the 60 year old dude in your company that is on 10 different meds and has to go to the doctor every fucking week.

Eventually we're going to have to figure out that all the systems our predecessors built are complete scams. We haven't been building wealth in the aggregate for a very long time. We've just been relying on ripping off the next guy in line and that shit isn't going to fly much longer.

 
labanker:
#8. They're often called the "greatest generation" but they might eventually go down in history books as the generation that bankrupted western civilization.

Yes they paid some mighty painful dues but they set themselves up for a pretty sweet deal in the end. Pensions, social security, medicare, real estate appreciation - all theirs. Bullshit fiat currency, runaway devaluation of the dollar, staggering income tax rates - done on their watch. Plus, why do you think your health insurance is so damn expensive? You go to the doctor once every two years. It's because you're subsidizing the 60 year old dude in your company that is on 10 different meds and has to go to the doctor every fucking week.

Eventually we're going to have to figure out that all the systems our predecessors built are complete scams. We haven't been building wealth in the aggregate for a very long time. We've just been relying on ripping off the next guy in line and that shit isn't going to fly much longer.

I think taxes have been continually going down over the decades.

But great comment on the other stuff.

"History doesn't repeat itself, but it does rhyme."
 

Eddie... I will save the Penn State commentary for my own thread (and trust me, it is the hardest thing for me, as an Alum to write about... moreso than anything else I ever talked about) but I want to refer all the hockey fans in the room to something amazing.

http://www.youtube.com/embed/0PokDj9u09A

 

Eddie, I'm waiting for Hit Somebody and then I'll make the decision as to whether I think the Jay Baruchel penned, Sean William Scott/Liev Schriber led Goon is a worthy successor to Slap Shot. I'm expecting big things from Kevin Smith with Hit Somebody since he's a Hockey Fan, but that's not the only thing. I've got high hopes since it's named after such a great Hockey Song too. I mean the last time a Zevon song was take for a film title, it was turned into a low flying crime drama staring Andy Garcia, Bill Forsythe, Christopher Lloyd, Bill Nunn, Christopher Walken, Fauriza Balk, Gabrielle Anwar, Treat Williams, Steve Buscemi, Don Cheadle and Willie Garson that was far better than the critics gave it credit for.

 

Omnis sequi tempore occaecati ut laudantium saepe. Ut sed quae aperiam illo.

 

Necessitatibus neque illum maiores qui qui eos tenetur. Est natus cupiditate doloribus quis accusamus sunt ut optio. Et reiciendis blanditiis vitae. Et excepturi veritatis ut aut expedita.

Minus non dolores pariatur officiis reprehenderit. Eos praesentium rerum voluptatibus autem sint rerum odit. Consectetur autem quos atque quia eum accusantium. Deserunt veniam ab voluptas ut incidunt pariatur autem. Tempora cum alias vel deserunt non unde enim.

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