Ron Paul Ends Presidential Bid

Ron Paul is ending his forward momentum (if he had any) by vowing not to campaign in anymore states.

From Politico

“Moving forward, however, we will no longer spend resources campaigning in primaries in states that have not yet voted,” Paul said in a statement released by the campaign Monday afternoon. “Doing so with any hope of success would take many tens of millions of dollars we simply do not have.
The move comes two weeks before Paul’s home state of Texas — which awards 155 delegates — is scheduled to vote in its GOP primary. Paul had been airing television ads in the Lone Star state.
Other big states left on the calendar include California and New Jersey on June 8; the final presidential primary will be Utah’s on June 26.

Obama and Romney Fight Battle of the Bain

It's Dueling Videos today and all about the Steelworkers. The Obama campaign released a video called "Steel" about Bain Capital's negative effect on a company named GST. As a counter-punch, the Romney folks released a vid called American Dream about a company called Steel Dynamics which was created with Bain start-up money.

Happy Mother's Day!!!

New Yorkers on the street thanking Mom for everything.




This makes me so verklempt and I wish I could hug my own late mother once again, and tell her that she taught me it's okay have your own interests beyond making cookies (but please make the cookies first because hungry kids won't let you do anything), to laugh and shrug when everything is going wrong and you want to run screaming into the street, and that it's okay to get up from dinner to look up a word in the dictionary because you just have to know the Latinate root and whether the accent is on the second syllable. Excuse me now while I go hug my children.

Economics Round-Up ~ The London Whale

Forbes: How JP Morgan Lost $17.5 million

According to the May 12th New York Times, JPMorgan decided to make a bet on a very obscure corner of the derivatives market. And due to the scale of JPMorgan’s trading, hedge funds figured out its identity and placed bets against the bank that are continuing to make profits for them at JPMorgan’s expense.

NPR Interview with Wall Street Journal's Zuckerman: Bruno Iskil Bears Some Blame for Morgan's Fall

GREGORY ZUCKERMAN:His name is Bruno Iksil. He's an interesting guy. He lives in Paris, but he commutes to London. Wears a lot of black. Informal dresser. He comes home, (unintelligible) from his home in Paris on Fridays, the rest of the week is in London. And he is one of a group - it's a group called the CIO group, and frankly, when I started reporting on this, analysts and investors didn't really know much about this group. And the more I uncovered it the more fascinating it became. They're a group that ostensibly hedges the positions of the banks. So the bank does all these loans and other kinds of things, and the group is charged with protecting and hedging the bank by doing various trades. But it also is charged with making money. So it does things that can potentially be risky at the same time.

New Statesman: JP Morgan Hedge-Bet Unbelievably Ineffective

The bank JPMorgan announced last night that it had lost $2bn in trading on credit derivitives, through what chief executive Jamie Dimon called "errors, sloppiness, and bad judgment" and a "bad strategy, badly executed and poorly monitored".
The loss was made by the bank's chief investment office, which is under the aegis of Bruno Iskil, who earned the nickname "London Whale" earlier this year following accusations that his oversized bets on credit derivatives, one said to be as large as $100bn, were skewing the market.

Guardian UK: London Whale Blows Hole in Bank's Value

A graduate in engineering from the École Centrale in Paris 20 years ago, Iksil had become so well known in the opaque $10tn market for credit default swaps – a complex type of insurance product – that he was nicknamed the "London Whale" and also known as Voldemort, after Harry Potter's nemesis.
Iksil is thought to be one of the highest-paid bankers in London and his New York-based boss, Ina Drew, whose pay has to be published, received $14m last year.
. . . Reports of Iksil's risky transactions surfaced in the US a month ago, but were dismissed by Dimon as "a complete tempest in a teapot". But in a hastily arranged conference call to investors on Thursday night he said: "The portfolio has proved to be riskier, more volatile and less effective as an economic hedge than we thought. There were many errors, sloppiness and bad judgment."

The Hill: Senator Corker (R-TN) Calls for Hearings on JP Morgan Chase

"I believe that we need to know the answers to the following questions: 1. Are we confident that taxpayers are fully protected from losses at major financial institutions?," Corker continues in the letter. "Were these bona fide hedging transactions, or were these poorly managed proprietary trades? And what, precisely, is the distinction?"

AP: World Stocks Lower on JP Morgan Loss

"This has permeated to the wider market as investors assess the possible systemic risk, adding another layer of caution to the fragile trading environment," said Jordan Lambert, a trader at Spreadex.
"When such shocks occur, it is wise to err on the side of caution and consider whether it is a possible 'tip of the iceberg' scenario, especially when one contemplates the interconnectedness of the banking system," he said.