There was a twist: as most regulars here know, the key topic of the past week, of December, and potentially of 2011, is the limitless "fractional Prime Broker lending" of assets-cum-liabilities
You have to take zerohedge for what it is, after the fact entertainment. "limitless prime broker lending"? This is an absurd extrapolation and has nothing to do with MFGlobal. Earlier I wrote about the old way of securities segregation but I left out many critical details, and how that could be abused. I said that MFG's execs were embezzling funds. What does it matter how they did it? Your bank can steal your dough, at least, for awhile. Indeed, a bank deposit is a kind of loan with a "guaranteed" trust. If the bank shuts its doors, you can't get the deposit.
(and when it comes to the realization that one's gold itself may be rehypothecated, via GLD, it is no surprise why paper gold is plunging, with the expected delayed effect of slow comprehension) in an infinite loop of daisy chained counterparty exposure, also known as rehypothecation.
If you don't trust abstractions, and you do so every day implicitly, then you need to buy gold coins and secretly bury them.
Which is precisely what what Bass touches on 9 minutes 30 seconds into the interview when the discussion shifts to "shortening collateral chains."
I heard Bass. It was predictable.I'd call it, "conventional". Later, I'll bring over a post I made earlier on the monkey board. See if it's a more usable. |
