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    Quote of the Day

    "You should be more conscious when you are sleeping"

    -Isabella Hatkoff  (June 2010) on the breaking a pinky promise by her dad who was a sleeping


    "You can't solve a problem with the same kind of thinking that created it."
    -Albert Einstein (1879 - 1955)

    "Give a dog a fish, feed him for a day.  Teach a dog to fish, feed him for a lifetime."

    - Walter the Farting Dog

    "Wouldn't it make more sense to read the legislation before approve you it? It's like asking the architect to design the house after it is already built."

    -Paris Hilton


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    Style Confusion: Power Attire in a Flat World

     An Editorial



    Published Irregularly Weather or Not We Feel Like ItAny Damned Time We Please

    Important Dislaimer: In case any reader doesn't quite get it, this is parody protected under the first amendment of the Constitution of United Statements of America. If you don't like the law then feel free to go try and change it. If you are interested in further information on freedom of the press we suggest you start with John Milton's masterful essay "Areopagitica" (1644) http://www.uoregon.edu/~rbear/areopagitica.html

    Gordon Geckko as Style Icon Returns

        Gordon Geckko

    Traffickers in Tragedy:  "Litigation is Good Buddy Boy"


    This gem below from the WSJ brings me back to the not-so-fond memories of early 1990s where financial misery and misgivings reined supreme.  Citibank was broke along with all the other banks. Citi, in desperation, kissed a frog that turned into a Prince from the east whose reputation grew along with his bank account and the price of Citi's stock.  Later, another Prince would become head of the joint who turned out to be a frog-- not of the French variety.  All our fairytales have become twisted and may turn into our worst nightmares.

    So looking back maybe things weren't as bad as they seemed at the time.  Add to the banking mix, the thrift crisis, Charles Keating, empty skyscrapers strewn across the country, half built strip centers all anchored by  a Chinese restaurant, a karate  school and a dry cleaner, the $300 billion junk bond market in disarray. It all seemed pretty gloomy at the time and guys went to jail for misdeeds.

    Now just add three zeroes to the magBut it was a time time when institutions we trusted got the job done. The Resolution Trust, the Fed, FDIC, OCC, SEC, the rating agencies were actually effective.  In hindsight things back then weren't so bad.  But it felt unseemly at the time. One favorite "collection firm"  for the hard core intractable debts was a bunch of former special-forces, Blackwater types who literally wore a shoulder patch bearing the phrase "one shot, one kill".  A bankruptcy judge referred to bankers and their "tools" as "traffickers in tragedy".  Which brings us to the curious case of Bickel & Brewer, the fashionistas of old-school power attire. 

    I read this article and was a bit confused.  Have the Bonfire's Masters of the Universe have been re-invented as Bastards of the Universe  in the form of litigators with double breated suits, yellow ties and shoe shines.  I am going to send them a a gross (12 dozen for those of you who have never been in the retail trade)  of those  patches that say "say one shot one kill". The partners should consider sewing them on to their $160,000 a year newbie associates to remind them of what their job is.  Traffickers in tragedy.  Something tells me the partners at Bickel & Brewer don't need the patches.  Clients will trust these attorneys because they dress to kill and look the part? Shakespeare was right.

    Caviar Emptor,




    Need a Real Sponsor here

    Inside a Bastion of Old-School Power Attire


    Bickel & Brewer Scorned 'Business Casual'; Now, the Firm Looks Prescient as Formality Returns


    At law firm Bickel & Brewer, even the mailroom clerks wear suits and ties. Until recently, that might have been considered extreme. But now, power dressing is coming back in style, and the old-school law firm has a new relevance.

    As law-firm layoffs mount, fear of unemployment appears to be speeding up the resurgence of power clothes, even among the youngest recruits. Legal interns have begun flouting business-casual dress codes and wearing suits instead, says Gretchen Neels, a Boston communications consultant who works with law firms and graduate schools. "In our economic times, you really want to have your game on. You can't be too formal," she says.

    Power clothes are selling well at menswear retailer Paul Fredrick. Those white-collared, colored dress shirts that Gordon Gekko favored in the 1987 movie "Wall Street" have been big sellers in recent months, says Dean White, executive vice president of merchandise. So are yellow power ties, another 1980s dress-for-success accessory.

    The return of old-school power dressing is something of a "duh" moment for Bill Brewer, co-founder and managing partner of the law firm, which has offices in Dallas and New York City. He never really got the appeal of khakis and rubber-soled Gucci loafers at the office. He prides himself on custom three-button suits with a center vent and shirts from Bruce Clark in New York. His voice tightens with disdain when he describes "those square-toed club shoes" that some young recruits wear to the office.

    Litigators Michael Gardner, left, and Bill Brewer, right, are known for their dedication to traditional power dressing.

    Litigators Michael Gardner, left, and Bill Brewer, right, are known for their dedication to traditional power dressing. Litigators Michael Gardner, left, and Bill Brewer, right, are known for their dedication to traditional power dressing.

    "I think people expect high-powered lawyers to look like high-powered lawyers," Mr. Brewer says. "Anything else is sending the wrong signal."

    Even six months ago, that kind of talk might have sounded as outmoded as John Molloy, who penned "Dress For Success," the 1980s bible of corporate style. Casual clothing has long been seen as a sign of a modern attitude and has become an important job perk. In a 2007 column I wrote, a number of young lawyers defended working in Ugg boots, jeans and clingy T-shirts, arguing that they needed to be comfortable at work. They felt entitled.

    But people's sense of job entitlement has evaporated as unemployment figures rise. Ms. Neels suggests that any law graduate with a job should prepare to invest in whatever the firm asks. "If they want you to dress up like Big Bird every day, for $160,000 a year, just do it!" she says, citing the going starting salary for law associates this year.

    Alicia Russell, an executive recruiter for legal jobs with Boyden Global Executive Search, says Bickel & Brewer's all-inclusive power-dress code is unusual. "I can't say that I've ever been in a law firm where every single person is in formal business attire," she says. But she isn't opposed to the concept. In fact, she recommends that lawyers stick with dark, conservative suits. Men should wear ties and women should add an accessory that has "panache" -- such as a piece of jewelry or a sharp-looking purse or briefcase.

    Heard on the Runway

    At Bickel & Brewer, the power code is made clear when recruits are invited to "Call-Back Weekend" in Dallas, which takes place each fall. "When I greet them at 9 a.m. that Saturday, I'm in a suit and tie -- and so are they," says Michael Gardner, the firm's hiring partner.

    In conversation, Mr. Brewer, 57, and Mr. Gardner, 39, manage to sound like the calendar says it's 1985. As they describe the corporate-litigation firm, which employs more than 40 lawyers, they evoke a work-hard-play-hard ethos, tossing around hard-driving football analogies to convey that work comes first. And second. "This is a star system," says Mr. Brewer.

    Mr. Gardner sounds as though he'd like to hold his nose when he discusses business casual. "It's actually a little offensive to my sense of style," he says. Without a suit, he says, "I would feel like a football player who ran out on the field without his shoulder pads."

    Young lawyers who arrive ignorant of the power-suit ensemble get a little tutoring from Mr. Gardner "in a mentoring way," he says. Let's just say that if Mr. Gardner invites you for a quick cup of joe at Starbucks, you might want to reconsider your footwear. Next door to the Starbucks in the lobby is a shoeshine shop. "You know," he tells those with scuffed shoes, "I'm going to get my shoes shined. Why don't you join me?"

    Adam Sanderson, an associate of the "millennial" generation born after 1981, accompanied Mr. Gardner to the shoeshine shop after joining the firm in 2006. Mr. Gardner says Mr. Sanderson's shoes were too trendy. "I was thinking the next best thing would be to get his shoes shined," Mr. Gardner recalls. But he didn't stop there. "I just told him, 'We gotta get rid of those shoes.'"

    Mr. Sanderson says he had been planning to get new shoes anyway -- and he bought the cap-toed Ferragamos that Mr. Gardner suggested. "Shined shoes are a point of pride here," he adds.

    There was a time that even Mr. Brewer's confidence in power attire wavered. In the late 1990s, says Mr. Brewer, "we were doing work for people who were very high-profile in the new space -- high tech. Many of them were business casual, or less than casual." Mr. Brewer asked during a corporate retreat whether the firm should test business-casual for the summer.

    "That's ridiculous," he says his partners countered. "That's not Bickel & Brewer."

    Write to Christina Binkley at christina.binkley@wsj.com

    Printed in The Wall Street Journal, page D8


    Credit Derivative Lyposuction: How to Make $30 Trillion Disappear

    How Do Compression Cycles Make $30 Trillion of Credit Default Swaps "Just Go Away"?

    Meet TriOptima: The Cosmetic Surgeons and Wellness Specialists of Credit Derivatives

    If you really want to poop in your pants just read the following Reuters Article from January 12th, 2009 on a company called TriOptima. Their services sound remarkably like those offerred by Park Avenue Plastic Surgeons but for cellulite-laden portfolios of the biggest derivatives players in the systemically-fragile global financial markets. George Soros' econolypse awaits as the sword of Damocles (his term) hangs overhead. But TriOptima offers a broad range of cosmetic procedures that can be best described, admittedly on the graphic side, as somewhere between a massive group financial enema and downright lyposuction for the formerly-reported $62 trillion credit default swap market.


    Using a web-based technology known as "compression cycle eliminations", one of many derivative-shedding products from TriOpima such as "triReduce" that sounds like a metrocal-based diet for financially obese.Then there is "triResolve" for conflict resolution. Using these products and services TriOptima has helped participating institutions shed some $30 trillion of CDS exposure! I wonder where they put it waste product? Doesn't a compression cycle sound more like a piece of exercise equipment you buy at the Gym Source? No, we're not exactly sure of what it is and can promise you no one voting on an $850 billion stimulus/bailout package in Washington understands what it is either. So let's assume they have cut the reported CDS numbers from $62 trillion (as per the Bank for International Settlements) to $30 trillion, estimates still put CDS activity at $10 of speculation for every $1 dollar in underlying securities.  Earth to regulators.

    Maybe that's why nobody's lending and nobody's spending?


     Check out the TriOptima website:

    A network community for proactive portfolio reconciliation triResolve Eliminate notional outstandings with portfolio compression triReduce Managing counterparty credit exposures in OTC derivatives In the midst of volatile markets, TriOptima's web-based Portfolio Reconciliation and Portfolio Compression services, triResolve and triReduce help you effectively reduce and manage the risk in your OTC derivatives portfolio.


    Click here for the Reuters article in its entirety:


    Reuters Logo


    TriOptima CDS compression cycles eliminate $30.2 trillion in notional principal during 2008

    Mon Jan 12, 2009 9:00am EST 

    NEW YORK--(Business Wire)--
    TriOptima`s portfolio compression service, triReduce, eliminated $30.2 trillion
    in CDS notional principal during 2008. TriOptima offered 50 compression cycles
    in 2008 contributing significantly to industry efforts to reduce the notional
    principal outstandings. Reductions in notional principal continued to accelerate
    throughout 2008, increasing 300% over 2007 levels as indicated in the graph

    "In cooperation with the dealing community, we were able to accommodate the
    demand for additional regular cycles and support the special default cycles that
    were required as market conditions deteriorated," commented Brian Meese, Group
    CEO. "It is important to note that the $30.2 trillion notional eliminated by the
    dealers this year exceeds the year end outstandings of $29.3 trillion reported
    by DTCC. By reducing exposures through regular compression cycles the dealers
    were able to continue providing effective risk mitigation tools while responding
    to regulatory concerns about counterparty exposure and operational challenges."

    TriOptima`s CDS compression cycles include American, European, Emerging Market,
    Asian and Japanese indices; ABX and CMBX indices; American and European
    tranches; US, European, Emerging Market, Japanese, and Asian single name CDS;
    and special cycles for single names and indices affected by credit events like
    Washington Mutual, Fannie Mae, Freddie Mac, Lehman and the Icelandic banks.



    Too Big to Succeed!!!!!!!!!

    Harsh Reality "Too Big To Succeed" Replaces "Too Big To Fail"

    Sacred Doctrine Flipped on Its Head

    Watch Greenspan concede his "ideological flaw"; turning point in capitalism


    The fact is the doctrine of "Too Big to Fail" has failed as a doctrine.  All you have to do is watch Alan Greenspan's tortured testimony about the flaw in his ideology about financial markets.   Citibank, the poster child for the doctrine, has for all intents and purposes failed, AIG has failed, Fannie and Freddie have failed.  Dead banks walking.  The industry consolidation  has left us with four viable national banks (at one time considered money center banks- now an archaic term). Citi, JP Morgan, BofA (now rebranded as  Booba: Bank Officially Owned By America) and Wells Fargo.


    Coming Soon: Alexander Hamilton's Golden Rule


    Steve Forbes Waxes Eloquently on the Gold Standard

    Can the Wisdom of Shooter Hamilton Help Us Calm the Storm?

    Alexander HamiltonAs Rupert Murdoch, Nouriel Roubini and George Soros see the econolypse on the horizon, it is pretty damn clear that you can't run and you can't hide. The degrees of financial interdepence have doomed us to reconsider everything we held sacred about Capitalism. From Adam Smith's Invisible Hand to the radicapitalist Ayn Rand to Gordon "Greed is Good Buddy Boy" Gekko we are being forced to re-evaluate, re-assess and re-imagine, well, virtually everything. We are in a world of post-Newtonian financial physics and new paradigms will emerge not yet considered. I was always astounded by Milton Friedman's opening true parable called "The Island of Stone Money" about the Island of Yap in his book "Money Mischief". (Just read pages 3-7 and you'll get the idea.) 

    So the world financial system is stuck in the netherzone.  Unknown minds and faces will have to fidure this one out simply because all the regular suspects have been thoroughly discredited.  How cool is this going to be? All options are on the table. We will start series of thought experiments about what a capitalistic future might look like. By the time we're done you'll hardly recognize the place.



    Hamilton Got It Right--Why Can't We?

    By Steve Forbes

    In his stirring inaugural address President Barack Obama called for a new era of responsibility. One area in which that admonition is badly needed is the integrity of the dollar. From the days of Alexander Hamilton to the 1960s it was an article of faith that the dollar should be strong and stable; this could be reliably achieved only by anchoring it to gold. Weak, volatile and eventually worthless money has been the bane of countries throughout history. Hamilton and his successors recognized that a firm dollar was an essential foundation for a lawful society and for economic progress. True, Franklin Roosevelt in 1933--34 played with the greenback as if it were a delightful toy. But that short-lived experiment didn't work, and during World War II the dollar's tie to gold was reaffirmed by the Bretton Woods international monetary system.

    In the 1960s the idea took hold that a flexible greenback could help generate perpetual economic growth. Ignored were centuries of experience: Fooling with money invariably has unpleasant, unintended consequences and does more harm than good.

    The Nobel Prize winner Milton Friedman rightly admonished us that inflation was purely a monetary phenomenon: If a central bank prints too much money, you're in trouble; if it doesn't, money retains its value.


    to read article in its entirety:




    Buffet Part II


    Rod Serling Redux: Negative Nominal Interest Rates Part II

    But it's not possible!

    Oh yes it is!!!! (Coming Soon to a Central Bank Near You)

    Negative Nominal Interest Rates: You Get Back Less Than You Invest but by Design Rather Than Surprise


    This introduction to my favorite TV show from the 60's still creeps me out 40 years later:


    Is  Washington starting to run out of ideas?  As every conceivable monetary, fiscal and taxation policy tool has been thrown up against the wall including the kitchen sink,here's one they haven't floated that may be worth a look: Now may be the perfect time to  implement a bold new experiment utilizing a theoretically  heretical policy tool-- Negative Nominal Interest Rates (NNIR). You get back less than you invest but on purpose.  What a welcome relief to investors who have become used to getting back less than they invest as a matter of standard operating procedure. At least they would know what they weren't getting back!  No surprises which as we know: just as nature abhors a vaccuum all investors hate surprises.

    Take a look at our  entry from December 11, 2008 where we initially discussed this  theortical possibility of  negative nominal interest rates. I have been intrigued with this theory for nearly 20 years and see it as a real possible anti-dote to a financially necrotic set of policy tools.  This powerful prescription has little prededent (but some-- check out 1947 in Chicago) and I am pushing it around to radicapitalists and trend setters to take a second serious look. One of the leading ecomomic theorist is Marco Bessetto . Here is his research paper presented to NBER in 2004.  http://www.nber.org/~bassetto/research/negrates/negrates.pdf

    So as a thought experiment imagine a 400 bp yield curve starting at -2% sloping upward to +2%.  Then imaging the discontinuity of using 0% as the rate of discount.  NPV of periodic cash flows would equal the aggregate undiscounted summation through infinity. It's a little bit like the speed of light. Alternating cash flows as fiancial geeks represent multiple internal rates od return.  Kind of like  imaginary numbers in algebra  (very different than the imaginary numbers they use at the rating agencies).  We are approaching a new zone of a post-Newtonian framework where really weird things start to happen.  Stay tuned as you will here a lot more about this unprecedented monetary tool , a secret weapon of sorts, as we move further and deeper into the twilight zone.



    Here is a replay of an EPD article  from nearly six weeks ago written back in 1999

    By Daniel L. Thornton

    January 1999

    Can nominal interest rates be less than zero? Many people would argue not, reasoning that no one would invest $100 today with a promise of receiving only, say, $99 in one year, given the alternative of simply holding the $100 in cash. Yet, rates on short-term Japanese government bills recently were negative, and several foreign-owned banks in Japan have paid negative nominalinterest rates on yen deposits.

    Read Full Article at: http://research.stlouisfed.org/publications/mt/19990101/cover.pdf