Anybody Still Counting? The Pentagon inspector general's chief investigator of procurement fraud and official misconduct, quit his job and pleaded guilty last month to violating U.S. banking laws. It was not related to his job and thus was unofficial misconduct.
Casablanca: Martin Wolf, in the Financial Times, expresses dismay that hedge fund managers make a lot of money even if they don't do a good job. Has this boy been living in a closet? If CEOs get paid extra when they fail, why shouldn't hedge fund managers? All this was explained by Galbraith's little book on fraud.
Pour encourager les autres: The Associated Press president Tom Curley says that the unprecedented 'accidental' deaths, the bombings of news facilities, and the imprisonment of reporters in Iraq is less than happenstance. As he was led away by Homeland Security, He alleged that the US is rounding up journalists in an attempt to control information.
Democracy: Dialog with Dick. During an interview on ABC, Cheney was asked about the surveys that show two-thirds of Americans say Iraq is not worth fighting over. His response, "So?" Asked if cared what the American people think, he replied, "No." A Reuters/Zogby poll finds that 81% of Americans believe the country is headed in the wrong direction.
Club Card: Starbucks is going from "an affordable luxury" to a place to get a cup of coffee. There will be lower prices, free refills, discounts for using prepaid cards, free wireless access and would you like fries with that? Probably the most understandable economic indicator to date.
Seems Like Old Times: JWM Partners' Relative Value Opportunity fixed income hedge fund has lost 24% of its $1 billion investment so far this year. The firm is run by John Meriwether, previously head of Long-Term Capital Management. Too many jokes, too little time.
Thin Crust, Please: Rising wheat prices are pushing up costs. Even pizza is getting more expensive. Only four weeks ago, pizza makers were paying just $16 for a bag of flour. INow it's $37.
Mirror, Mirror: Citi put out a "sell" recomendation on itself and warns investors to "avoid companies and countries that have grown to rely too much on borrowed money." Their list of such companies and countries stretches from A to B.
Where's Waldo? In a world of risk we can generally figure out the probability of various outcomes. In a world of uncertainty, we are lost. Most of Wall Street would like a hint or two as to where in the world the next shoe will drop from.
Double Dating: Joining UPS, FedEX sees "limited earnings growth" in next year or two. Their report ends with the ever encouraging: "We are scrutinizing all expenses to realign them with the current environment." I've been a realigned expense once or twice myself.
Rock, Paper, Scissors: Merrill Lynch bought default protection on some bonds from Security Capital Assurance. The covered bonds defaulted. Then SCA defaulted. Merrill is out $3.1 billion (plus the insurance premium) and is suing the bankrupt insurer to recover the losses from the bankrupt bonds. Who has a chance to make any money out of this except the lawyers?
Viva la Difference! The headline was the whole story: The Difference Between Investment Banks, Hedge Funds, Credit Card Borrowers and Microcredit: "The Poor Always Pay Back" and while you're at it check out Kiva.org.
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