Repo 105: Creative accounting at Lehman Brothers | 55 comments (55 topical, editorial, 0 hidden)

Re: Repo 105: Creative accounting at Lehman Brothe (4.00 / 3)

Fascinating stuff.

It's interesting, I recall some early discussions where we were trying to work out some of the actual mechanisms involved in the bubble and ensuing crisis overall. A key point that came up was the question of measures of money supply and just how much money was in the system. We concluded (to no great purpose at the time) that some of the transactions must have been dedicated to getting around capital adequacy ratio directives... we could see symptoms, but couldn't see the mechanisms...

by Metatone (metatone [a|t] gmail (dot) com) on Wed Mar 17th, 2010 at 12:51:43 PM EST

Fascinating stuff (4.00 / 3)

There's a certain elegance to the scheme, I'm almost impressed :)

The brainless should not be in banking -- Willem Buiter

by Carrie (migeru at eurotrib dot com) on Wed Mar 17th, 2010 at 12:54:02 PM EST
[ Parent ]

Re: Fascinating stuff (4.00 / 4)

I'm pretty sure it's fair to state that "no US lawyer would sign off on it" means what it says... all the US lawyers thought it was not a true sale under US law...

Linklaters role reminds me that many parts of UK Financial law are expressed mostly in archaic formal English, where multiple interpretations abound...

by Metatone (metatone [a|t] gmail (dot) com) on Wed Mar 17th, 2010 at 12:57:34 PM EST
[ Parent ]

Re: Fascinating stuff (4.00 / 3)

I come off with the impression of law firms as mercenaries who will write a legal opinion in support of the higher bidder's claim, as long as it cal be plausibly construed that way. It reminds me of the way the TV series The Tudors which I have been watching recently depicts the evolving legal and theological arguments concocted by various scholars and advisors to Henry VIII to support his goal of divorcing Catherine of Aragón.

The brainless should not be in banking -- Willem Buiter

by Carrie (migeru at eurotrib dot com) on Wed Mar 17th, 2010 at 01:07:10 PM EST
[ Parent ]

Re: Fascinating stuff (4.00 / 3)

Bang on... commercial lawyers basically earn their best money that way... and it appeals to many of them psychologically - you go into commercial law in particular if a certain kind of systems beating/game theory approach appeals to you and you're a humanities student (if you could do math, many other career options exist...)

by Metatone (metatone [a|t] gmail (dot) com) on Wed Mar 17th, 2010 at 01:09:25 PM EST
[ Parent ]

Re: Fascinating stuff (4.00 / 2)

There are lawyers who seek to learn the law so as to promote justice and there are others who learn the law so as know how to stay just inside it. Guess who make more money.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Mar 17th, 2010 at 01:27:42 PM EST
[ Parent ]

Re: Fascinating stuff (4.00 / 3)

ARGeezer:

Guess who make more money.

Making money in more than one sense at that.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Wed Mar 17th, 2010 at 03:58:41 PM EST
[ Parent ]

Re: Repo 105: Creative accounting at Lehman Brothe (4.00 / 2)

You're likely referring to The M3 money supply: much ado about nothing? (October 7th, 2007) and your comment

The key issue here is that if you sit down with:
a) M1 and M2
b) Interest rate decisions
you will happily conclude that inflation has been low because inflationary pressures are low. This allows you to ignore the "asset bubble." Incidentally, this kind of round robin of measurements probably plays into the "core inflation" debate too.
It's only when you look at M3 that you get an explanation for the "asset bubble."

Repos show up in Cat's comment

Yes, according to Gary North and Mish. I finally got around to reading these posts, and I think you might find them interesting. You all are about to converge at the same conclusion: the real action has been in M2 and FRB repos, the ultimate buy-back scheme. Basically, the discount window has been and will remain a cover for sucking money out of circulation; supply has been flat, after all. (Graphs of YoY data sets)

The brainless should not be in banking -- Willem Buiter

by Carrie (migeru at eurotrib dot com) on Wed Mar 17th, 2010 at 01:27:16 PM EST
[ Parent ]

Repo 105: Creative accounting at Lehman Brothers | 55 comments (55 topical, 0 editorial, 0 hidden)

Top Diaries

No More Equality Under the Law, the End of Isonomy in...

Generating a toxic discourse that's not really about ARINS

Energy (and Other) Events Monthly - May 2025

Recent Diaries

Stop Bloodshed, Invest In Peace

Trump: Sanctions Are Self Defeating

City Agriculture - May 13, 2025

Major Shift Powers in Mena - West Asia

China Trade Deal: Repair 4 Years of Biden Neglect

Trump: Zelensky Should Agree to Direct Talks w Putin

IDF Sniper Murderer of Shireen Abu Akleh Named

Rift Trump w Netanyahu Deepens

MAGA Freaked Out on Election Leo XIV

A Deal of the Century In the Making .. Again

Israel Aims a Political Ban on Dutch Institutions

Nakim Terror: Taking the Holocaust to Palestinians

PMQ House of Commons and Israeli War Crimes

Bill Bradley on Russia and NATO

Friedrich Merz Humiliated In 1st Vote

Rogue States Destroying the United Nations

Last Resort: Trump Slaps Erdogan On His Shoulder

Trump Hard Work Reversing JCPOA Decision

WWII Commemoration and Today's Genocide

VE Day Winston Churchill 1945

Occasional Series