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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: carranza2 who wrote (48101)	4/2/2009 8:16:02 PM
From: basserdan	Respond to of 218705

Hi Carranza2, I thought you might be interested in Denninger's followup piece.... Ticking Financial Nukes (OTC Derivatives) Posted by Karl Denninger at 12:53 Thursday, April 2. 2009 Oh, this is not good. Go read the latest AIG Ticker again. Specifically, this paragraph: As with the phony reinsurance contracts that AIG and other insurers wrote for decades, when AIG wrote hundreds of billions of dollars in CDS contracts, neither AIG nor the counterparties believed that the CDS would ever be paid. Indeed, one source with personal knowledge of the matter suggests that there may be emails and actual side letters between AIG and its counterparties that could prove conclusively that AIG never intended to pay out on any of its CDS contracts. Now consider this. There is some gross "notional" (or face) value of $683.7 trillion dollars outstanding as of the end of June 08 (last data available.) The lions share of those are not "CDS" on individual names or CDOs like what is going on here with AIG. They are instead interest-rate and/or FX products of one sort or another; $458 trillion worth. If even a couple of percent of those swaps are in fact "private lettered" out in the fashion that AIG is alleged to have done with their CDS..... (Hint: This is how "notional" amounts end up becoming realized losses!) Our Congress had better dig into this hornets nest right damn now because if in fact there is any material amount of this crap going on in the OTC derivative market the $170+ billion blown on AIG trying to cover it up will be a mosquito on an elephant's ass in comparison to what's about to happen to the world's economy and banking system. If, in fact, it cannot be proved that this is not the case, given the extraordinary lengths that both government and private parties have gone to in order to cover up what IRA alleges AIG was actually up to, we must ring-fence and cut off any part of the financial system impacted by a potential detonation of that market right now, including the US Federal Government, as such a detonation will, if it occurs, destroy any part of the financial system it infests at the time the unwind occurs. No I'm not kidding. This really is that serious and the extreme measures taken to attempt to hide this, assuming the IRA article is correct, implies strongly that there is a lot more of this going on that we're simply unaware of. Yet. market-ticker.org

To: carranza2 who wrote (48101)	4/3/2009 8:26:30 AM
From: elmatador	Read Replies (3) \| Respond to of 218705

With the Downturn, It’s Time to Rethink the Legal Profession By ADAM COHEN Published: April 1, 2009 The economic downturn is hitting the legal world hard. American Lawyer is calling it “the fire this time” and warning that big firms may be hurtling toward “a paradigm-shifting, blood-in-the-suites” future. The Law Shucks blog has a “layoff tracker,” and it is grim reading. Top firms are rapidly thinning their ranks, and several — including Heller Ehrman, a venerable 500-plus-lawyer firm founded in 1890 — have closed. The employment pains of the legal elite may not elicit a lot of sympathy in the broader context of the recession, but a lot of hard-working lawyers have been blindsided, including young associates who are suddenly finding themselves with six-figure student-loan debts and no source of income. Leading firms have historically avoided mass layoffs, concerned that their reputations would take a hit. But some have been putting those inhibitions aside, perhaps calculating that the stigma of pushing out their colleagues has faded. Law firm managers and bar associations should be looking for more creative ways to deal with the hard times — like reducing pay for both partners and associates to save jobs, as a few firms have begun doing. The silver lining, if there is one, is that the legal world may be inspired to draw blueprints for the 21st century. The changes are likely to begin with compensation. Years ago, law firm starting salaries were not that different from government or public-interest jobs. But the gap has become a chasm. First-year salaries at top firms are around $160,000, compared with $48,000 to start for state and local prosecutors and $40,000 for legal-services lawyers. New associates often earn more than the judges they appear before. The downturn will probably rein in salaries at the high end. Top firms are already under pressure to lower the $160,000 starting salary; one industry-watcher says it could fall as low as $100,000. And fewer firms will feel the need to pay the top salary. Lower pay should mean that associates will not need to work the grueling hours many have been forced to. And it will mean less pressure to go into private practice for law graduates who would rather do something else. Clients are also likely to benefit — and consumers, since legal fees are built into the cost of almost everything. Even before the downturn, big-firm clients, led by the Association of Corporate Counsel, were pushing to phase out the billable hour — which can go as high as $1,000. Tight corporate budgets will give clients more leverage to push to pay by the project or for successful outcomes. For years, law school tuition rose along with big-firm salaries. Between 1990 and 2003, the cost of private law schools rose at nearly three times the rate of consumer prices. The average graduate now leaves with more than $80,000 in debt. In one survey, 66 percent of students said debt prevented them from considering government or public-interest jobs. If the downturn is prolonged, law schools will need to keep tuition and other costs in check so students do not graduate with unmanageable debt. More schools may follow the lead of Northwestern, the first top-tier law school to offer a two-year program. Law schools may also become more serious about curriculum reform. The Carnegie Foundation for the Advancement of Teaching released an influential report that, among other things, urged law schools to make better use of the sometimes-aimless second and third years. If law jobs are scarce, there will be more pressure on schools to make the changes Carnegie suggested, including more focus on practical skills. They may also need to pay more attention to preparing students for nonlegal careers. Law graduates have always ended up in business, government, journalism and other fields. Law schools could do more to build these subjects into their coursework. The past few decades of prosperity made a lot of lawyers wealthy, but they were not always good for the profession. Law school deans, bar association leaders and firm managers should follow Rahm Emanuel’s advice about never allowing a crisis to go to waste and start planning for what comes next.