The Real Great Depression (Panic of 1873)

[stockstradr]

Thanks to the EconProf for remarking about LTCM

http://en.wikipedia.org/wiki/LTCM

..and its connection to:

http://online.wsj.com/article/SB123000810251629677.html

I was obviously aware of the LTCM story, but not aware of how John Meriwether had later set up a hedge fund (to mimic LTCM strategies only with “less leverage”) and how that fund is also now in serious trouble.

If that story alone isn’t sufficient grounds for greater regulation of hedge funds, I don’t know what is!

[Allan from Fallbrook]

EconProf: Excellent book on LTCM out there called “When Genius Failed” by Daniel Lowenstein. It not only chronicles the how and why of LTCM’s implosion, but the ensuing “rescue” attempt by the Fed and several investment banks. That rescue attempt is nearly as interesting as the failure itself.

[Allan from Fallbrook]

EconProf: Excellent book on LTCM out there called “When Genius Failed” by Daniel Lowenstein. It not only chronicles the how and why of LTCM’s implosion, but the ensuing “rescue” attempt by the Fed and several investment banks. That rescue attempt is nearly as interesting as the failure itself.

[Allan from Fallbrook]

EconProf: Excellent book on LTCM out there called “When Genius Failed” by Daniel Lowenstein. It not only chronicles the how and why of LTCM’s implosion, but the ensuing “rescue” attempt by the Fed and several investment banks. That rescue attempt is nearly as interesting as the failure itself.

[Allan from Fallbrook]

EconProf: Excellent book on LTCM out there called “When Genius Failed” by Daniel Lowenstein. It not only chronicles the how and why of LTCM’s implosion, but the ensuing “rescue” attempt by the Fed and several investment banks. That rescue attempt is nearly as interesting as the failure itself.

[Allan from Fallbrook]

EconProf: Excellent book on LTCM out there called “When Genius Failed” by Daniel Lowenstein. It not only chronicles the how and why of LTCM’s implosion, but the ensuing “rescue” attempt by the Fed and several investment banks. That rescue attempt is nearly as interesting as the failure itself.

[carlsbadworker]

Dec 23 (Reuters) – John Meriwether’s JWM Partners LLC hedge fund will lose four of its seven active partners and cut 10 of 35 staff after the weak performance of its flagship fund this year, the Wall Street Journal reported.

The Greenwich, Connecticut firm expects to lose four partners next year, including Lawrence Hilibrand and John Tsai, the paper said, citing a letter sent to investors on December 17.

According to the paper, the letter said Arjun Krishnamachar is expected to leave by March 31 and Chief Financial Officer Andrew Geisert after March 31.

JWM’s flagship fund, the Relative Value Opportunity Portfolio, fell 42.78 percent in the first 11 months of this year, the paper said.

Meriwether’s previous hedge fund, Long-Term Capital Management, had to accept a $3.6 billion bailout by U.S. banks in 1998 after it ran aground with leveraged trading strategies.

JWM could not immediately be reached for comment. (Reporting by Eric Yep in Bangalore; editing by John Stonestreet)

[carlsbadworker]

Dec 23 (Reuters) – John Meriwether’s JWM Partners LLC hedge fund will lose four of its seven active partners and cut 10 of 35 staff after the weak performance of its flagship fund this year, the Wall Street Journal reported.

The Greenwich, Connecticut firm expects to lose four partners next year, including Lawrence Hilibrand and John Tsai, the paper said, citing a letter sent to investors on December 17.

According to the paper, the letter said Arjun Krishnamachar is expected to leave by March 31 and Chief Financial Officer Andrew Geisert after March 31.

JWM’s flagship fund, the Relative Value Opportunity Portfolio, fell 42.78 percent in the first 11 months of this year, the paper said.

Meriwether’s previous hedge fund, Long-Term Capital Management, had to accept a $3.6 billion bailout by U.S. banks in 1998 after it ran aground with leveraged trading strategies.

JWM could not immediately be reached for comment. (Reporting by Eric Yep in Bangalore; editing by John Stonestreet)

[carlsbadworker]

Dec 23 (Reuters) – John Meriwether’s JWM Partners LLC hedge fund will lose four of its seven active partners and cut 10 of 35 staff after the weak performance of its flagship fund this year, the Wall Street Journal reported.

The Greenwich, Connecticut firm expects to lose four partners next year, including Lawrence Hilibrand and John Tsai, the paper said, citing a letter sent to investors on December 17.

According to the paper, the letter said Arjun Krishnamachar is expected to leave by March 31 and Chief Financial Officer Andrew Geisert after March 31.

JWM’s flagship fund, the Relative Value Opportunity Portfolio, fell 42.78 percent in the first 11 months of this year, the paper said.

Meriwether’s previous hedge fund, Long-Term Capital Management, had to accept a $3.6 billion bailout by U.S. banks in 1998 after it ran aground with leveraged trading strategies.

JWM could not immediately be reached for comment. (Reporting by Eric Yep in Bangalore; editing by John Stonestreet)

[carlsbadworker]

Dec 23 (Reuters) – John Meriwether’s JWM Partners LLC hedge fund will lose four of its seven active partners and cut 10 of 35 staff after the weak performance of its flagship fund this year, the Wall Street Journal reported.

The Greenwich, Connecticut firm expects to lose four partners next year, including Lawrence Hilibrand and John Tsai, the paper said, citing a letter sent to investors on December 17.

According to the paper, the letter said Arjun Krishnamachar is expected to leave by March 31 and Chief Financial Officer Andrew Geisert after March 31.

JWM’s flagship fund, the Relative Value Opportunity Portfolio, fell 42.78 percent in the first 11 months of this year, the paper said.

Meriwether’s previous hedge fund, Long-Term Capital Management, had to accept a $3.6 billion bailout by U.S. banks in 1998 after it ran aground with leveraged trading strategies.

JWM could not immediately be reached for comment. (Reporting by Eric Yep in Bangalore; editing by John Stonestreet)

[carlsbadworker]

Dec 23 (Reuters) – John Meriwether’s JWM Partners LLC hedge fund will lose four of its seven active partners and cut 10 of 35 staff after the weak performance of its flagship fund this year, the Wall Street Journal reported.

The Greenwich, Connecticut firm expects to lose four partners next year, including Lawrence Hilibrand and John Tsai, the paper said, citing a letter sent to investors on December 17.

According to the paper, the letter said Arjun Krishnamachar is expected to leave by March 31 and Chief Financial Officer Andrew Geisert after March 31.

JWM’s flagship fund, the Relative Value Opportunity Portfolio, fell 42.78 percent in the first 11 months of this year, the paper said.

Meriwether’s previous hedge fund, Long-Term Capital Management, had to accept a $3.6 billion bailout by U.S. banks in 1998 after it ran aground with leveraged trading strategies.

JWM could not immediately be reached for comment. (Reporting by Eric Yep in Bangalore; editing by John Stonestreet)

[carlsbadworker]

I think it is unfair to criticize the fractional reserve system. The banking industry has turned into a commodity business and it is tough to make money in such kind of industry. As HLS points out recently, “I don’t know of any other business that sells something for $400,000 and only makes $1080 gross”. Without fractional reserve system, the banks will all die because they really have no profit margin at all.
I don’t think there is a solution to that. Risk takers in the banking industry will always get awarded for the short term. The government can regulate the hell out of it but there will always be loopholes.
The same will gradually apply to all businesses that turns into commodity business. They make up their margin by quantity… which is essentially excessive inventory that will kill them in times of economy trouble. The only way is for business and the country to innovate itself out of the poor industries (and let the Asian countries deal with it), but American has become too stupid and lazy to make steady innovations.

[carlsbadworker]

I think it is unfair to criticize the fractional reserve system. The banking industry has turned into a commodity business and it is tough to make money in such kind of industry. As HLS points out recently, “I don’t know of any other business that sells something for $400,000 and only makes $1080 gross”. Without fractional reserve system, the banks will all die because they really have no profit margin at all.
I don’t think there is a solution to that. Risk takers in the banking industry will always get awarded for the short term. The government can regulate the hell out of it but there will always be loopholes.
The same will gradually apply to all businesses that turns into commodity business. They make up their margin by quantity… which is essentially excessive inventory that will kill them in times of economy trouble. The only way is for business and the country to innovate itself out of the poor industries (and let the Asian countries deal with it), but American has become too stupid and lazy to make steady innovations.

[carlsbadworker]

I think it is unfair to criticize the fractional reserve system. The banking industry has turned into a commodity business and it is tough to make money in such kind of industry. As HLS points out recently, “I don’t know of any other business that sells something for $400,000 and only makes $1080 gross”. Without fractional reserve system, the banks will all die because they really have no profit margin at all.
I don’t think there is a solution to that. Risk takers in the banking industry will always get awarded for the short term. The government can regulate the hell out of it but there will always be loopholes.
The same will gradually apply to all businesses that turns into commodity business. They make up their margin by quantity… which is essentially excessive inventory that will kill them in times of economy trouble. The only way is for business and the country to innovate itself out of the poor industries (and let the Asian countries deal with it), but American has become too stupid and lazy to make steady innovations.

[carlsbadworker]

I think it is unfair to criticize the fractional reserve system. The banking industry has turned into a commodity business and it is tough to make money in such kind of industry. As HLS points out recently, “I don’t know of any other business that sells something for $400,000 and only makes $1080 gross”. Without fractional reserve system, the banks will all die because they really have no profit margin at all.
I don’t think there is a solution to that. Risk takers in the banking industry will always get awarded for the short term. The government can regulate the hell out of it but there will always be loopholes.
The same will gradually apply to all businesses that turns into commodity business. They make up their margin by quantity… which is essentially excessive inventory that will kill them in times of economy trouble. The only way is for business and the country to innovate itself out of the poor industries (and let the Asian countries deal with it), but American has become too stupid and lazy to make steady innovations.

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