Whatever illusion it was that suggested the presence of a common global agreement (or even a semi-regional agreement) on the best way to approach the present crisis faded quickly after the first mutual caresses of the appendages of state resulted in multiple charges of sexual harassment. Doubtless, Gordon Brown, who is facing his own political crisis on top of the economic weight already crushing his skull day in and day out, hoped matters would glide smoothly over the many financial surfaces covered with new found Anglo-American lubricant. Not so fast. That stuff dries out fast.
A rift between Europe and America over the crux of the G20 summit was last night threatening Gordon Brown’s hopes for a deal to rescue the world economy.
The size of the challenge facing the British Government in bringing together world powers was emphasised in a candid admission by Britain’s most senior civil servant that it was proving “unbelievably difficult” to liaise with the Obama Administration to prepare for the meeting.
Sheesh, what’s the problem? Is Larry Summers too busy preparing his keynote for Wellesley (“The Inadequacy and Irrelevancy of Female Scholarship in the Modern age: A Question of Intelligence?”) to pick up the phone or return a text?
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You have to hand it to this guy Dreier. He really managed to scam some sharp folks. Or perhaps we have a very over-inflated view of the collective sharpness of hedge funds with famous names and big AUMs.
Elliott’s losses tied to the fraud accounted for less than 1 percent of the money it oversees, according to a person familiar with the firm.
“Elliott has been deceived more than once over the years, and it is likely to happen again in the future,” the fund said in the letter.
Elliott Hedge Fund Bought Fictitious Securities From Dreier [Bloomberg]
Earlier: Would You Give $50 Million To This Man?
Well, we all knew they blew it, the only question was how long it was going to take them to admit it. And given that the rule was only scheduled to last ten days at first, we might have endured the entire thing without so much as a “woops.”
Of course, I mean the SEC’s reversal on several provisions of their short selling restrictions. The Wall Street Journal reports:
WASHINGTON — The Securities and Exchange Commission said shortly after midnight Monday that it would revise rules to curb short selling that it had issued just three days before.
The SEC’s latest change of direction on short selling caught some market participants off guard and prompted criticism that the agency has miscalculated the impact of its rulemaking.
The SEC, in a release issued at 12:26 a.m. EST Monday, reversed a position it had taken Friday when it said that market makers couldn’t short financial stocks after Friday. The new rules as of Monday: Those engaged in bona fide market making and hedging activity, including in derivative contracts, could continue to short.
I’m utterly fascinated to see what “bona fide market making and hedging activity” is.
This, of course, is the problem with hasty rules squeezed off to quiet the rambunctious third graders quickly. You impose restrictions based on no data at all that they might help the market, but that have a psychological “we’re in control” feel to them. Action is taken. Confidence is restored. That is, unless the rule is so moronic that it causes more problems than it solves. So then what do you do? Backtrack halfway and open some more loopholes? Now you look like the bumbling idiots we always knew you were. The problem is, now everyone knows, and everyone feels more than a little bit molested.
SEC Quickly Revises Short-Selling Rules [Wall Street Journal]
