Embezzlement is a Crime Mr. Corzine

A nice explanation of what may have occured at MF Global can be found here.

Prosecutors need to be reminded of the 100′s that went to jail over the S&L crises. Also of interest may be former exchange president Richard Whitney who went to jail for, like Corzine, the crime named embezzlement. Responsible citizens need to ask why these crimes are being selectively (if at all) prosecuted and demand action.
If John Doe steals a hundred dollars from a bank, he goes straight to jail.
If John Corzine embezzles up to $1.2 billion, he resigns and says “my bad.”

Embezzlement is the act of dishonestly appropriating or secreting assets by one or more individuals to whom such assets have been entrusted


The Commodities Exchange Act, 7 U.S.C. § 13(a)(1), makes it a crime punishable by up to 10 years imprisonment for anyone associated with a commodities dealer
to embezzle, steal, purloin, or with criminal intent convert to such person’s use or to the use of another, any money, securities, or property having a value in excess of $100, which was received by such person or any employee or agent thereof to margin, guarantee, or secure the trades or contracts of any customer or accruing to such customer as a result of such trades or contracts or which otherwise was received from any customer, client, or pool participant in connection with the business of such person.

The Case For Barnes & Noble: Amazon

The performance of Barnes & Noble (BKS) shares compared to Amazon (AMZN) can be seen from this Google chart:

For many reasons Amazon is doing well and Barnes & Noble is under pressure and without a change may go the way of Borders, bankrupt.

Most people have heard the story or been the subject themselves of browsing in a Barnes & Noble brick and mortar to find and review a product and then, having compared costs, ordered the product using Amazon.
Or have you witnessed the "customers" that enjoy casually sitting and reading in the B&N store rather than purchasing the product and reading it elsewhere.

As stated, there are many reasons for the bifurcation in these companies performances.

There are many reasons to think B&N will have trouble surviving without a change. However, one reason to consider investing in BKS is ironically the company that is pressuring its sales, Amazon.

Amazon is under pressure from cash strapped states to implement a sales tax.

One could reasonably suspect that this sales tax drive will eventually take place. At that point, I think Amazon would seriously weigh the pros and cons of establishing a physical presence, brick & mortars. Barnes and Noble would be an attractive way of establishing this physical presence; Amazon may buy B&N.

Amazon has established customers across a broad range of products and is becoming more entwined with its customers daily lives. What better way to promote itself, provide superior customer interaction, and be a resource to the community as a social gathering spot than by a physical store presence?

In addition, Stifel Nicolaus & Co. analyst David Schick says a Barnes and Noble purchase would bring Amazon B&N's "competitive advantage... in its relationship with publishers and heavy readers, ... relationships...strengthened with Borders going out of business."

Amazon's focus on online media could gain tremendous boost utilizing B&N's existing college presence.

AMZN may buy BKS and figuring out when and at what price may be worth thinking about.

Random Thought

The wisdom of various attempts to stimulate the economy is best described by paraphrasing Edison's aphorism: I haven't failed to stimulate the economy, I've found dozen of ways that don't work

Questions not being asked: Boeing vs NLRB

Poor management is the real reason why Boeing is building in South Carolina. Management is establishing a track record of poor forecasting, inefficient and wasteful production, poor product quality oversight, creating an uninspiring working environment, and waste in general.


Boeing executive Jim Albaugh telling a reporter why they decided to move the 787 Dreamliner assembly line to South Carolina:

The overriding factor was not the business climate. And it was not the wages we are paying today. It was that we can't afford to have a work stoppage every three years.

Each element of his answer should be examined.

Why are there frequent work stoppages?

Why are wages an issue?

Why might there be a poor business climate?

I have visited Boeing facilities in Washington, Kansas, and its HQ in Chicago.

Wasteful bureaucracy at each one.

There are two ways for management to increase profits, increase revenue or decrease expenses thus improving margins.

Instead of cutting all the bloat resulting from poor management, Boeing continually feuds with its workforce.

So maybe the workers will not strike and create stoppages in South Carolina. Will this make the company any more productive. I doubt it.

The 787 program has been a disaster. Every investor and customer was excited about the 787's prospects and the ambitious time line. Delay, delay, delay, lack of this, failure of that; is there any excuse that we didn't hear?

Stop blaming others and take some responsibility Boeing management.

-------------------------------------------------------------------------------------------
Boeing has been around for nearly 100 years and has a market cap over $40 billion. Its main competitor is EADS.

Boeing is essentially a GSE- government sponsored entity. Nearly half of their revenue came from Boeing's Defense, Space & Security divisions. The majority of paperwork at the export-import bank has Boeing's title on it. Subsidies and sweetheart deals at the local level are undeniable.

Some days you just can't get rid of a bomb

The current state of the European economy:




Eventually the bomb will go off. When will the European leaders stop ignoring the problem?  Who is Batman and will they do the right thing?

Boom! Here comes the Boom! Ready or not, How you like me now?

The falcon cannot hear the falconer;
Things fall apart; the centre cannot hold;
-- The Second Coming; Yeats

The next few days will be tough for the markets.  Investors have been circling the pundits and leaders, slowly widening the gyre, until the falconer is actually ignoring the falcon, as in Europe, or is yelling at it to go away, as in the United States. 

Der Spiegel has the latest on Germany's response to the Greeks ouzo sipping ways. Meanwhile, Bloomberg LP reports Italy is looking for a China bailout. This will initially give some relief and a bounce, but I remember learning that the last money in before an economic bust is often of foreign origin. Prince Walid

I wrote about Greece default, by choice or by riot, and the resulting threat to the Euro structure in June elsewhere (Real Time Economics and others were also early to the game). The spotlight is finally being shown on the situation, but the Europeans are delaying and refusing to deal with their mess. Euro-zone chiefs fiddle while countries burn

In the US, President Obama presented his jobs bill.  Whatever you made of his proposals, many analyses are available, the tax proposals suggested to pay/off-set the proposed spending are coming into full view. 

The bill will restrict some tax exemptions of interest from municipal bonds. The municipal bond market will get killed; "It would be dramatic for municipal bond demand,” said Matt Fabian
It makes no sense to funnel money to the States and local government, as part of the proposed job bill, and at the same time raise their borrowing costs.
Other proposals to offset spending that will discourage risk investment are being found.

Regulations and a yield curve that helicopter-Ben is helping destroy is reshaping the banking industry (BAC layoffs) and most likely moving the financial centers to Asia.

The devaluation of the dollar and essentially negative real returns offered to government debt investors and money market/cd participants is pick-pocketing Americans.  The intentions are well thought out, encourage riskier investments like stocks or real estate, but the reality is that the moral hazard created by the bailouts, the lack of transparency by financial companies, and the lack of certainty in fiscal, monetary, and regulatory policy have created a warning to the investment community; don't trust the guys and gals with the rose colored glasses.


Competitive devaluation further distorts markets and money flow. Lets all buy some Krone!

I think we are at a bifurcation point, hope and wants versus reality.
The reality is Europe's leaders don't want to confront its failed systems. The United States' leaders don't understand simple economics. The falcons, the investors and citizen stakeholders, are no longer willing to dance to their promises and calls.

Things fall apart; the centre cannot hold.

Be careful these next few days.

Fed's Richard Fisher Confuses His Age For Wisdom

This morning on Bloomberg, Federal Reserve Bank of Dallas,@DallasFed, President Richard Fisher made snarky comments in response to Betty Liu, @BettyInTheLoop , and diminished the value of his interviewer, Sara Eisen, @saraeisenFX.
About 4 minutes in, Fisher says that the media is hyping the dissent from the most recent Fed meeting. Liu challenges him saying that the markets may have increased volatility due to the dissent. 

The lack of clarity in policy, monetary and fiscal, has been a key reason why investors have been cautious and unwilling to accept risk.

Fisher goes on to buffer his initial response by stating the obvious, he is much older than either of his two hosts. 

Richard Fisher's credentials are very impressive. However, he should be above diminishing others opinions due to his greater experience.

Who is to say his many years make him any more right than a five year old. For many economic questions, you would do just as well flipping a coin as you would listening to the experts. Actually, listening to the experts may be a good strategy, as long as you take the contrarion view.

"Wisdom doesn't automatically come with old age. Nothing does - except wrinkles. It's true, some wines improve with age. But only if the grapes were good in the first place"   Abigal Van Buren

"The surprising thing about young fools is how many survive to become old fools."  Doug Larson

Sorry BAC, you can keep your "Book Value"

Bank of America Corp has an ugly chart.  Buffett and Berkshire cut their deal with BAC and Moynihan is crying out all clear. 

Bove says book value is this or that and that the stock should move from 7s to 10s. 

I have a feeling that BAC's own analyst, Guy Moszkowski, may agree with Bove.  I remember when Moszkowski maintained a "buy" rating on Bear Sterns @ 140 in June 2007. The price to book value was "1.3", significantly lower than peers like Lehman and Merrill that were at 2.2 and 2 respectively.  Bear, he wrote, is even a "manageable takeover candidate."

I also remember Bove riding down both BAC and Citigroup. 
Why don't the journalist preface any of his appearances with his track record? They used to display how the analysts picks have performed since the last time they spoke.  His track record has been horrible, sorry to say.

Bottom Line:

Why trust the analysts or the banks when it comes to book value?
The banks don't even trust each other?

People are having trouble finding jobs; either they can't find one or they found one but can't sell their house to move to the opportunity.

The unemployment rate and stagnant real-estate market continues to depress home prices and increase delinquency rates.

Bank of America is highly linked to the real estate market going forward and is highly linked to the real estate market of the last few year (lawsuits galore).

What is the "real" book value of BAC?  I doubt even the company itself really knows.  But even more, I bet noone in the company would want you to even begin to calculate it because it is certainly much lower than the on-book current evaluation.

Bloomberg detailed writeup
Moynihan Tries to Keep Bank of America Intact as Mortgage Loans Fall Apart

Yahoo Inside Trade On Bartz Firing?

At 4:58 PM EST on September 6th, eighteen-million shares of Yahoo! were moved at a net price of $ 12.90 per share- that is just over $232 million dollars.

According to a source, the e-mail sent by Bartz to Yahoo! employees was sent at 6PM EST.

Chart via Google:

Who leaked?