Counterparties

By Felix Salmon
June 10, 2011
ATL

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Fantastic post by Elie Mystal on living with bad credit — ATL

Anil Dash on why he favorites/likes so many things — Dashes

South Africa to Trevor Manuel to be head of the IMF — EM

The phone number: “a false technological prison built of nothing but laziness and hostility to consumers” — TIMN

Matthew Latkiewicz’s rather handy taxonomy of wine labels — NYM

Emerging vs developed equity volatility — Reuters

How capitalism makes health care worse and more expensive — Economist

New York media salary datapoint of the day — TBI

4 comments

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אורי פרייס, משרד עורכי דין
Uri Praiss, Law Offices
רחוב אחוזה 17, רעננה 43208 טל’ 050-5573697, 054-7569760 פקס למייל
17 AHUZA ST. RA’ANANA43208 TEL (972)-54-7569760, 50-5573697 FAX-MAIL
praiss.uri@gmail.coml; praisuri@netvision.net.i E- mail:

June 8, 2011 U r g e n t!!

Dear Opinion / ED- OP Editors,

I am honored to file my Updated full version as follows:

Re: How Should Bernanke Answer JPM’s Dimon

Author: Uri Praiss, Attorney at law (Israel, since 1990)
Law & Economics lecturer

Dear Jamie, first I want to suggest “L.D.L.” “What?” L.D.L. – Let’s Discuss Live. Everybody knows. Better for you. During the S.E.C.’s investigation we first met this secret “Investment” banking code.

When Fabrice Tourre defined (by e-mail) those mortgage “investments” (“bombs”) as “a way to distribute junk that nobody was dumb enough to take first time around”, to his team-mate, one Jonathan Egol, Before the manipulative criminal “Big Short”, coordinated with Rating companies’ downgrade, he was answered at once: “LDL.”(“Shut Up!!” in French). Your security rules are stricter than an Iranian Nuclear Station.

Second, I appreciate your creative and brilliant defense speech, but legally I am not sure that I’m allowed to answer, while N.Y. A.G., Eric Schneiderman, as well as Cyrus Vance Jr., Manhattan District Attorney, have just started to subpoena and interrogate you, your dear friend Mr. Blankfein and many others concerning Manipulations (remember the “Big Short” and many little shorts?) Insider Trade (I know, Rajaratnam wasn’t an insider either) Fraud, and so.

“What for, It’s over” You’ve already said in Davos last year.
Today I’ve heard you might find some calculation and spelling mistakes at Levin’s Committee report.

Well, at least for manufacturing, “distributing” and pushing these “mortgage-loans-bombs-”securities”, that caused millions of jobless, homeless and hopeless miserable families, at least for few more years.

Third, yesterday I’ve seen on T.V. former S.E.C. Chairman, Arthur Levitt, now as a “policy adviser for Goldman”(!!) discusses the reports Goldman Sachs Group Inc. has been subpoenaed by the Manhattan District Attorney’s office, opening a fresh front legal, after recently subpoenaed also by N.Y. A.G. Levitt Said “These Subpoenas Mean nothing for Goldman.” I wonder if that’s legal, and how much Levitt’s wage and bonuses are.

Forth, you know S.E.C. was founded as one of the most important lessons of The Great Depression .We forgot the other most important lesson – Total Separation between Banks, Trade so called “Investment”, Advisors, Underwriters, IPOs, etc. I know you preffer 5 Dodd – Franks. You know, even basic New York Martin Act, 1921 was almost forgotten.

The S.E.C. was created, as a rearmed special force, to defend us against the Robber Barons, or Huns, after they caused, stretched for 6 years and used that horrible national disaster, caused by another greed financial crisis (and Manipulative panic / pessimist Short Selling, though not advanced as your nowadays’ Algorithmic “Nuclear” HFTs.
But sooner than later they’ve found you and the other handsome Huns’ generous attitude (like the wolf after swallowing Red Riding Hood’s Granny) as Mr. Levitt, not to mention the Exchanges, orthodox and modern biased scholars, “experts”, bankers, conservative politicians and officials, research budgets, presentations, conservative parties and rich contributors.

So the Exchanges and S.E.C. went to sleep many years before 2007, allowing the Huns to create and traffic those bombs or drugs “securities”, “Big Short”, “Regular daily shorts”, you name it. Look the other way. Tell the S.E.C. and Exchanges “Liquidity, bigger trade volume, market diversification”, count the fees, etc.

For the record, you know S.E.C.’s Investigations focus mostly on “Fishing under the Lamppost”, that gossipy piping Insider Trade Offences, by big billionare Rajaratnam or even this miserable Nelson Obus, hunted for 10 years (and 2 obsessive appeals) because of that “Investi-Mad-Dog”.
By the way, you surely know that “Insider Trading” offences were pushed and demonized by Wall Street’s Traders and Analysts’ Lobbyist Cartels? That is not even theft. Just populist over -reacting. There is no victim except some righteous vague envy.
In most civilized Securities (Non U.S.) Laws, Manipulations, Fraud, Attempt of Affecting Rates by Short and /or concerted / HFT “Selling Efforts” are much “heavier” offences than famous and juicy “Insider Trade”. The Anti – social and economic damages as well as risks (!!) are much heavier. So is the “Mens Rea” and the punishment is more severe.

Meanwhile, S.E.C. and Exchanges try, maybe they can’t refuse, to rescue JPM and Goldman Trading “Bank”, by $ 550 Million’s S.E.C. selective “plea – bargain” fine. That appears Ex – Post as a gift – their “Gold Mine Windfall” – approximately 1 day’s total income, and let’s pretend It’s over. Nothing happened.
GS and you report $100 Million daily net trade profits easily (how exactly?!) Now you buy Tokyo’s Exchange and threat to fire employees, so i’ve read. You were just tickled to laugh by those twisted illegal secret highly – organized, 15 or so, $1 Million State – fines. “Partial-but-final rehabilitation-immunity-bargains’” ridiculous fines (as lately urged in New Jersey and Massachusetts) which N.Y.A.G. Schneiderman refused to accept, as was reported here.

S.E.C., JPM and GS would help also Moody’s and S&P.”One for all and all for one” Musketeers and Robin Hood’s Lady Gaga’s Charity Tax Deductable evening. Till N.Y.A.G. and N.Y.D.A. shall come between you.
Remember classic “Prisoners’ Dilemma”, maybe most popular Economics’ Game Theory? Let’s invent 500 pages of new Rating Rules’ wasteful cover up, so maybe they won’t face Criminal and Civil Fraud and Conspiracy charges plus (Gross) Negligence huge law suits.

But you won’t guess what really worries me the most. The very bad news and the unhappy end (for now) is neither S.E.C. nor Robber Barons haven’t learned anything yet.

Vice Versa, the Huns have already found, use (on a daily basis) and develop their new “nuclear” arms, at least a year. Almost all financial and real markets, firms and households suffer daily doldrums, stagnation, waste and loss of potential growth and employment.

These are caused mainly by manipulative advanced Hi-Tech and Algorithmic HFT daily trade (by whatever “machines”?!), including Short selling, combined with endless fearful, false and as if professional daily negative economic excuses (Greece’s Debts? Portugal?) Not to mention serial scary “Flash Crashes” S.E.C. and Exchanges don’t want to see.

Yesterday I’ve read about your amazing Ms. “Commodities” Masters’ profits. What a waste. I wonder what is the economic loss all of you cause, and on whose account. Many a $ Trillions. Today I’ve seen OPEC’s resolution and the $ hundreds of millions net profit your HFT speedy algorithmic traders did today.

Tell me, Jamie, the stocks are dead for that, right? Stagnation and Degeneration by daily illegal obssesive greedy HFT. I’e watchedyou from last years “Sell on May, stupid and fade away”. Sound like Broadway. What about Greece, Portugal, Deficit, Friday 13th ? You really name it.

Last question – you know I’ve made for decades a deep research on The Great Depression, but only these days I’ve understood that those manipulative short traders, over years of fears and greed, caused these long time Depressions and Recessions. Do you get it, Mr. President, Secretary, Politicians, Economists, Hard working and unemployed citizens?!
Now please excuse me, I need to file some urgent formal complaints

Sincerely yours,

Uri Praiss, Attorney at law
Law & Economics Lecturer

Posted by Anonymous | Report as abusive

The EM/DM volatility chart is mislabeled. The bottom chart shows the opposite relationship it purports to. Genius. Even our marketing chicks can get that right.

Posted by BRM_3 | Report as abusive

post-script: not to be a jerk (ok, perhaps to be a jerk) analyzing R12M volatility is statistically pretty meaningless. At least extend it out to 15, but doing a 2-year or 3-year window would actually amount to something more credible.

Posted by BRM_3 | Report as abusive

Please never use the word “fantastic” in the same sentence as “Elie Mystal” ever again. K, thanks.

Posted by BasilSeal | Report as abusive