Countdown To The Collapse

On multiple fronts there appears to have been a resumption of hostilities in the global currency wars. A subtle indication of this is the recently released report, Gold, the Renminbi and the Multi-Currency Reserve System, which I believe is highly significant for two reasons: First, it demonstrates that major global actors [...]


Nobody Knows

“Economists, like royal children, are not punished for their errors.”

James Buchan.

We lost another client last week. This makes a grand total of two clients who have left us over the past year, not because we lost them money, but because apparently we didn’t make them enough. [...]


Out Of The Frying Pan Into The Frying Pan

“The skill of the sports player is not the result of superior knowledge of the future, but of an ability to employ and execute good strategies for making decisions in a complex and changing world. The same qualities are characteristic of the successful executive. Managers who know the future are more [...]


Goons Versus Gold

When, more than 100 years ago, George Gilbert Williams, president of the famously conservative Chemical Bank, was asked for the secret of his success, he replied: “The fear of God.” You can have the fear of God or the socialisation of risk, but you cannot have both at once.


Nassim Taleb on Fragility and Antifragility

Nassim Nicholas Taleb is, as my readers know, my favorite contemporary philosopher. He has come out with a new book, Antifragile: Things That Gain from Disorder. Taleb wrote the book, The Black Swan: The Impact of the Highly Improbable, which was a revolutionary look at risk in the investment world. I [...]


Corzine To Start Hedge Fund (Why?)

FORTUNE — Jon Corzine is “weighing whether to start a hedge fund,” according to a NY Times article that also says the former MF Global boss is unlikely to face criminal charges for his role in the brokerage firm’s collapse. Somewhere, the ghost of P.T. Barnum must be smiling.

This defies explanation. Maybe he’s trying to [...]


Why It is No Longer a Good Idea to Be in The Investment Industry

A spurious tail is the performance of a certain number of operators that is entirely caused by luck, what is  called the “lucky fool” in Taleb (2001). Because of winner-take-all-effects (from globalization), spurious performance increases with time and explodes under fat tails in  alarming proportions. An operator starting today, no matter [...]


The Ecclestone Girls Signal Market Top

There is no better sign of the top of a boom-bust monetary cycle than extravagant spending by those who have benefited the most from the sea of new money floating around the economy. With $2.1 trillion of fiat dollars available to financial players, the hedge funders and investment advisers have been the main beneficiaries of quantitative easing. They have [...]


Dimon Geezer

“JP Morgan Chase last night announced a surprise $2 billion trading loss on credit derivatives trading, which chief executive Jamie Dimon blamed on “errors, sloppiness and bad judgment”, warning it “could get worse”.

- From The Financial Times, Friday 11th May 2012.

“The [...]


Knife Catching, Booms, Busts, And Tops

Everything looks “toppy” to me. Our DoctoRx has called it just right again. The market is overvalued and the signs around us abound. Just this morning we read that hedge fund assets are at an all-time high and IPOs in tech stocks have surged. This is what I refer to now as the “Old Paradigm” [...]


MF Global E-mail: Corzine Authorized Use Of Customer Funds To Cover MFGLQ Overdraft

Jon S. Corzine, MF Global Holding Ltd. (MFGLQ)’s chief executive officer, gave “direct instructions” to transfer $200 million from a customer fund account to meet an overdraft in one of the brokerage’s JPMorgan Chase & Co. (JPM) accounts in London, according to an e-mail sent by a firm executive.

Edith O’Brien, a treasurer for the firm, said in [...]