Mark McHugh

Archive for October, 2011|Monthly archive page

Agreeing With Krugnuts

In Open Thread on Monday, October 10, 2011 at 8:33 am

The way to understand all of this is to realize that it’s part of a broader syndrome, in which wealthy Americans who benefit hugely from a system rigged in their favor react with hysteria to anyone who points out just how rigged the system is.

~Paul Krugman, from the article “Panic of the Plutocrats


There are people in this world that I love to hate, and Paul Krugman is one of them (close to tops on my list).  That said, I try to listen to what is being said, not who said them.  Today I found an excellent explanation of the Occupy Wall Street movement, and to my horror it came from none other than my sworn archenemy, Krugnuts:

What’s going on here? The answer, surely, is that Wall Street’s Masters of the Universe realize, deep down, how morally indefensible their position is. They’re not John Galt; they’re not even Steve Jobs. They’re people who got rich by peddling complex financial schemes that, far from delivering clear benefits to the American people, helped push us into a crisis whose aftereffects continue to blight the lives of tens of millions of their fellow citizens.

And there it is; far better than I could ever say it.  I wish those protesters wouldn’t bash capitalism so much because what’s happening ISN”T CAPITALISM!!!!  Capitalism is supposed to kill companies like JP Morgan, Goldman, General Electric, Morgan Stanley etc., etc., etc.  These companies simply shouldn’t exist anymore and everyone associated with them should be in the poorhouse.  Instead they hijacked America.

I think everyone should read this Krugman article.

(You’ll never know how much it hurt to write that)


Another Sad Day For Truth, Justice And The American Way

In Open Thread on Thursday, October 6, 2011 at 11:19 pm

Last week I was able to say with absolute certainty that General Electric has vaporized more than $400B in shareholder wealth since 2000.  I went to the internet archive (aka the Wayback Machine) and sifted through old yahoo finance pages until I found the historic market cap data.  It was easy.  The Wayback Machine has an incredibly robust collection of captures from yahoo finance (one of the web’s oldest and most popular financial sites) , or should I say had?  Tonight I got this:

Unless there has been some kind of mix-up, no historic pages from Yahoo can be  accessed via the wayback machine, so hold on to those memories.   A few weeks back I was looking at the September 12, 2001 Yahoo front page and I thought it would always be there.  As it stands now, that snapshot of American history (along with countless others) is gone forever.

I wonder how many people share my outrage over this.  Certainly no one at the New York Times, CNBC, Fox News or anyplace else where  journalism has degenerated into a sideshow.  Facts are enemies to them anyway.

As 2011 unfolds, we are witnessing the same people tell the same lies they told just three years ago.   It’s insulting.  Jim Cramer’s assertions that “Morgan Stanley is fine…” and “2011 is not 2008!” make him sound like a wifty used car salesman.  Had Cramer understood 2008 was “2008” it might be interesting to hear what he had to say, but he didn’t.   I agree with Cramer however; 2011 is not 2008, it’s Nineteen Eighty-Four.

So say hello to the memory hole.

Note: I’ve contacted the Wayback Machine for an explanation.  I’d at least like to know whose decision it was to remove yahoo from the Wayback.  I’ll let you know what I find out.

Fun fact:  The Wayback Machine is operated by Alexa Internet, a subsidiary of 



The pages are back.  The above screenshot is the only proof I have that they were ever gone.

 I think we should probably do something to insure that those pages never disappear.

Yeah, It’s Definitely Morgan Stanley…

In Open Thread on Wednesday, October 5, 2011 at 8:31 am

Last time, I pointed out the Universe is signaling another Lehman-esque event in the very near future, and I wasn’t sure what that event was.  Now I am.

It’s Morgan Stanley.

CNBC’s repeated denials confirm this (thanks Cramer & other sock puppets!)

I hope to put together more soon (but don’t count on it).



Wall Street’s biggest charity case.

August 22, 2011 – Bloomberg reports that Morgan Stanley received $107B in bailouts from the Fed

Morgan Stanley, facing a crisis of confidence after the fall of Lehman Brothers Holdings Inc., got a $9 billion injection from Japanese bank Mitsubishi UFJ Financial Group Inc. and agreed to take a $10 billion bailout from the U.S. Treasury to shore up capital. As hedge-fund customers pulled funds out of the New York-based firm, it plugged the hole with $107.3 billion of secret loans from the Federal Reserve’s Primary Dealer Credit Facility and Term Securities Lending Facility, set up earlier in the year to supply brokerage firms with emergency financing.

Morgan Stanley was the biggest Fed charity case in 2008 and nobody knew it for three years.  See here and here.


Pursing other interest?

September 15, 2011 –  NYT’s Susanne Craig (remember that name) reports that Morgan Stanley Chairman, John Mack has announced plans to step down.  Unless this is your first week investing, you know that a Chairman stepping down is always a red flag, usually because they’ve trainwrecked the company, or put their dick somewhere they shouldn’t have.  Of course those angles were completely unexplored by Ms. Craig, who chooses instead to focus on Mack’s upcoming book (on, get this, “leaders”) and his role as an economic advisor to a presidential candidate no one’s ever even heard of. 

1.76 Trillion in OTC Forex contracts

September 24, 2011 – In this article, based on the OCC’s quarterly report on derivatives activity Zerohedge observed:

Of particular note is that while virtually every single bank has a preponderance of its derivative exposure in the form of plain vanilla IR swaps (on average accounting for more than 80% of total), Morgan Stanley, and specifically its Utah-based commercial bank Morgan Stanley Bank NA, has almost exclusively all of its exposure tied in with the far riskier FX contracts, or 98.3% of the total $1.793 trillion. For a bank with no deposit buffer, and which has massive exposure to European banks regardless of how hard management and various other banks scramble to defend Morgan Stanley, the fact that it has such an abnormal amount of exposure (but, but, it is “bilaterally netted” we can just hear Dick Bove screaming on Monday) to the ridiculously volatile FX space should perhaps raise some further eyebrows…

Here’s something else noteworthy from the OCC report:

The Morgan Stanley holding company is third in total notional amount derivatives contracts with $56.4T, yet Morgan is sixth in total assets with $830.7B.  Their ratio of derivatives to assets is 68, the highest in the group (Goldman is a distant second at 57).  Hmmmm. 

(more to come…)



G’head.  Here’s what I got this morning:



 Again, unless you just opened your E-trade account yesterday, you should know that large banks are far more interested in quelling  truths than rumors.