It’s Probably Nothing

Via email,

Good morning Kate-
I don’t think you’re going to see this anywhere else, so here goes….
With no excess margin left in any trader’s account nowadays, the littlest foreign exchange hiccup is blowing up every hedge fund’s and Wall street prop desk’s most favorite trade, the emerging market swap. Lend the Jap 10 year note, and borrow the Thai 10 year note, at the same time, as an example, and pocket the difference in yield., in a corporate margin account, using borrowed US Treasury bills pledge to borrowed Japanese Yen to finance the larger swap trade. Because of the unidicted status of Jon Corzine, any “smart” trader will leave no uninvested cash at any brokerage account, knowing that the brokerage firm may use it for its own purposes with little or no recourse. And certainly no access to your cash, for months on end. The margin call comes in when the borrowed security’s value falls, in this case a Thai 10yr, compounded with a currency move (Thai Baht) against the borrower, who borrowed in Japanese Yen, which also moves against the borrower, and you have a multicase of margin call, which forces the sale of the whole thing. And actual, realized losses.
Hedge funds will be closed today because of these bets. And the banks? Oh, Jack Lew will be “forced” to bail out some of them out. (see def. “reliable donor class”)
Going to get very messy into next week.

Discuss.

The Children Are Our Future

Sean, via email;

Something isn’t adding up…
Small town doctor and parent Nhung Tran-Davies is leading a fight against ‘discovery math system’, a faddish new approach to teaching math that has become the basis of Alberta’s math curriculum. After discovering that the new teaching method had not only rendered her daughter Kenya unable to perform basic mathematical operations, but that she had also come to hate math as a result, Dr. Tran-Davies has taken a stand to restore common sense to Alberta’s math instruction by launching a petition to the province’s education minister, Jeff Johnson. Please take some time to read her story and to sign the petition if you too feel we need to revert to the old way of teaching math.
Article: http://goo.gl/7AIGHJ
Petition: https://www.change.org/petitions/back-to-basics-mastering-the-fundamentals-of-mathematics

We Don’t Need No Stinking Giant Fans

Uh oh, Ontariowe…

In a letter sent from the MPP to Premier Kathleen Wynne, McNaughton says he received word this morning that 60-100 manufacturing jobs will be lost with the closure of the plant. The Wescast plants make iron and steel cast parts for the automotive industry.
On January 7, McNaughton received a letter from Wescast CEO Ed Frackowiak, which says the company is “deeply worried” about the future price of electricity in Ontario. “If electricity rates do not become more affordable, Ontario risks losing important investments from companies like Wescast,” says Frackowiak in the letter.


Related
– “WHEREAS the province’s recently released Long Term Energy Plan anticipates that consumers will face hydro rates that will rise by 42% over the next five (5) years…”

Reader Tips

Tonight’s Tips entertainment, accompanied by some snappy music from the era (or thereabouts), consists of archival footage from the 1920s. Gratuitous pulchritude warning.
It’s the warning that’s gratuitous, btw, not the pulchritude.
The comments are open for your Reader Tips.

This Is Not Your Grandma’s Humane Society

First they came for the carriage horses.

I have been writing and reading about the Central Park Horses ever since I became aware of the massive, well-funded and highly organized effort on the part of people who call themselves animal rights advocates (and who the media call animal rights advocates) and the political and bureaucratic power structures of New York City to ban the Central Park Horses from Central Park and New York City, and exile them to the rumored but so far largely mythical “rescue farms” waiting to take in all 200 of them.
The horses have been in the park since 1858 and are loved all over the world, but it seems there is a pervasive idea in urban New York City that their lives are grim, filled with too much work, abuse and dangerous traffic. That their time is come, the mayor says the discussion “is over,” no point in any more. Apparently, the mayor of New York City has more power than I thought mayors generally have. The Mayor and City Council President and a broad array of activists have made it a major priority of the new administration to get rid of the horses, above just about everything else.
This is evolving into one more well-meaning tragedy visited upon animals by people who believe they know what is best for them. No one who knows anything about horses believes these active and engaged working animals will be alive for very long, this is a campaign to kill and banish animals so that they can be rescued from meaningful work and connection with human beings.

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