Yesterday I went to the pool to get my swim in for my training. Funny thing- the pool is closed for the week. I was bummed as it threw off my entire schedule for the week. I walked by to see why it was closed, thinking maybe someone left a Baby Ruth there. There was scaffolding over the pool though and it appears they were doing ceiling repair. So I biked 9 miles instead and when I got into the office I re-arranged my entire training schedule for his week and next week.
I read about the 9/11 terror suspects and their plea. I quote: "Our religion is a religion of fear and terror to the enemies of God; the Jews, Christians and pagans." Gee I wonder why people stereotype Muslims or any other religious nut when such statements are made. I am sure abortion clinic bombing Christians use the same vernacular when they describe why they do such things. It makes you wonder how humanity has survived despite organized religion.
Barney Frank really needs to shut his piehole. He was out yesterday saying the up-tick rule will be re-instated within a month. The implication is that the repeal of the uptick rule is what caused our current economic morass. I doubt very much if we had the uptick rule in place that both LEH and BSC would have had different fates. IF we want to go with his line of thinking we should also bring back paper tickets, time stamp clocks, a 10:30 opening, a 3:30 close and Wednesdays no trading to take care of back office and settlement issues. All of those have gone away over the last thirty some odd years so they also would have prevented us from having a huge credit implosion.
He also pontificated about mark to market. I think a simple way to handle that would be if you originated the debt and hold it to maturity you get to use fair value and/or accrual accounting but once you sell or trade it, it falls under mark to market. I think that would cause a lot of people to do some serious risk analysis when originating debt and when deciding whether or not they actually want to trade debt.
The only ones who can change both of those things are the SEC commissioners. Like every political bureaucracy they take a long time and try to reach a consensus before doing anything. Congress cannot make those changes. They can and do control the SEC's funding but they can't tell them what to do.
I slept in late this morning and did my training after work as it was just a short run today.
I read an article today that perked up my cynic radar. It described how bank bonds are getting smoked lately. The reason is everyone is finally realizing what my bond friend told me last week: Certain banks will get nationalized de jure (not just de facto as they are now) and that means only the very top and most senior credits will be allowed to recover any kind of money. Everyone else will get smoked. I know a big trade currently in the street is shorting the common versus the preferreds. The smart kid next to me, I and my boss discussed it and it makes sense as anyone putting that trade on is doing it solely to capture the differential. They don't care if both go to zero because it is an arb trade for them. The suckers are the ones who think the preferreds are safe enough and high enough on the credit ladder that they will make money no matter what. Time will tell.
Last night the husband and I had dinner with JW and JD. They made this amazing lamb dish and awesome green beans- which may explain my semi-gaseous state all day today.
After work I grabbed beers with an old friend from the business who left it a few years ago. I have known this guy for close to twenty years. For fourteen years straight he and I went to the Allman Brothers concert at the Beacon every year they were in the city. The funny part is after the last one we went to we went out for beers after- because you always need more beers at 1 AM on a Thursday after getting stoned by second hand smoke at a concert. At that point I spilled my guts to him and he is an was the first person to whom I admitted I was gay. The rest is history as they say...
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