Of Greek Haircuts and Corzine Decline

One of my basic grievances that would get me a free lunch at any Occupy Wall Street kitchen, is that there has for too long been a whole lotta shaking going on on Wall Street, and not the sexy kind, the arbitrage, gambling and speculation kind. Well, that can be sexy too if you win.

Jon Corzine and his decline sort of makes me happy. Sorry, nothing personal Jon, I just think Michael Moore has a better idea-let’s make things, rather than speculate.

Yep, as NY Times Columnist Friedman once said, “Just because George Bush said it does not make it wrong”.

Friedman regretted saying that and spent a lot of time rationalizing it and eventually backed away from it as best he could, ignoring it and not bringing it up anymore even when events would justify it. Seemed like his best medicine for that liberal felony.

The story of Corzine is one of keep on gambling, especially when underwater, as it is the only way to breathe again. This time, he did not have enough of other people’s money to stay afloat. Gee and he has already been rejected at the polls in his home state.

Maybe he will just have to write books and go on the friendly news network tour. He was a big man at Goldman, it’s chairman even after large losses and as one term governor, he knows where Snooki lives and his bread is buttered, no worries for Jon.

Which brings me to a couple of my hot buttons.

Democrat Clinton and his banker buddies along with a ton of Republicans replaced the Glass Steagal Act with a banking supermarket idea, crossing all historical lines and allowing big money types to blend banking/mortgages/insurance/merchant banking/trading with your or my own capital, something for everybody building new giant institutions that could partake also in any of their own product offerings.

That occurred especially with instruments meant to hedge natural risk, but later turned on it’s head by banking compatriots called hedge funds. They borrowed from banks to leverage bets that initiated risk for profit, not for hedging the natural risk of planting and growing corn or protecting the value of a pipeline of mortgages in various stages before being sold to Fnma or Freddie in a GSE dance with Wall Street.

It did make banks too big to fail. As we saw 2008.

That problem was supposed to be solved by big legislation but soon was only further heightened by the overnight conversion of Goldman and other market makers and speculators into modern banks. That facilitated the government protecting you and I from the bad bets the biggies make with our deposits via that government insurance. And today we are giving them more money than they almost know what to do with it. Oh, but the bonuses generally take care of that.

Too big to fail was further institutionalized with legislation named for individual politicians with a direct role in politically motivated bad decisions, encouraging Democratic heads of Fnma and Fhlmc to ignore the advice of their risk managers in 2004 and agreeing to buy unlimited no doc loans so as to serve the under served without limit, for votes. That was the year Barney Frank agrued in public with the Bush administrations who wanted to require more capital with those GSEs. Barney killed the ideas saying they were in great shape.

The ultimate big legislation intended to save us, called Dodd-Frank did many things, most that will cost you money and make banks still to big to fail and describes how the next bailout fund will work, single handedly speeding up the next disaster.

We are all too big to fail, except that the biggest is failing and there is no one to really bail us out, other than to keep us addicted to foreign borrowings. Too bad we did not just stop with our oil addiction.

Corzine started gambling on Greek and other weak sovereign debt and now he is also going to get a Greek Haircut and will fire sale the only part of his MF Global company worth anything.

No doubt he will sell it to you the taxpayer, with a check written by and from Goldman Sachs and he will likely become another Goldman associate, again, with a two or three word title.

Back to Michael Moore, now he really makes something. Hypocrisy and narcissism are his major products encased in movies and books and speeches, but at least he makes money and wants to sell hangman’s nooses. Much of what he says here is true on the surface. That is his gift. Try getting below his directed surface with him. He will eat you up and spit you out.

Ask Wolf Blitzer and others who dare not put him in a corner. Watch this YouTube Video first with the sound off.