While You Were Working - February 8

Morons and the market meltdown

Apparently, a “group of morons” is to blame for the market gyrations of the past week – including today’s plunge of 1032.89 points. I don’t think that is the case, but to those of you who might think it is, I pose this question: How stable can the markets possibly be when all it takes is a group of morons to blow them up?

Bernanke, Paulson, Duke and Duke

This piece from The Economist delves into a space not usually associated with insider trading: the revolving door between financial institutions and government agencies. One of the studies highlighted in the article focuses on the financial crisis of 2008-09. The Economist notes:

“The paper examines conduct at 497 financial institutions between 2005 and 2011, paying particular attention to individuals who had previously worked in the federal government, in institutions including the Federal Reserve. In the two years prior to the TARP, these people’s trading gave no evidence of unusual insight. But in the nine months after the TARP was announced, they achieved particularly good results.”

Obviously, part of the reason financial institutions hire some former government employees is because of the expertise they possess and the relationships/access they can leverage. I guess it is just hard to take the common notion of insider trading (see the awesome pic that accompanies the article) and apply it to a high-level meeting between Ben Bernanke, Hank Paulson, Tim Geithner and a bunch of senior banking executives. But I guess if the shoe fits.

Equifax, the Fed and checks and balances

If I didn’t know better, I would think this and this almost, kinda, sorta, maybe, just might represent a wee bit of checks and balances taking place between the legislative branch and the executive branch of the US government. Oh, nevermind … both stories are all about partisan politics.

CME directors retire

I know a couple of people retiring from the board of an exchange operator is not something everyone finds all that newsworthy. But in this case, it is. Leo Melamed and Jack Sandner played a huge role in shaping modern global markets. I have had a chance to chat with Melamed a few times at CME Group’s annual Global Financial Leadership Conference and not only is Leo an exchange legend, he is also just an awesome dude.

WYWW Appetizers