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The Daily WTF

Posted on June 18th, 2009 at 19:19 by John Sinteur in category: Funny!


“Someone must have imported the sizing chart from an overeager Excel worksheet,” writes Justin N.. “My girlfriend always considered herself a size ‘May’.”


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Robot 2

Posted on June 18th, 2009 at 13:38 by John Sinteur in category: Funny!


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More Financial Innovation

Posted on June 18th, 2009 at 12:51 by John Sinteur in category: Robber Barons


Felix Salmon discusses reverse convertibles, inspired by a Larry Light article in the Wall Street Journal.

In a reverse convertible, you give $100 to a bank for some period, like a year; it pays you a relatively high rate of interest, say 10%. The $100 is virtually invested (no one actually has to buy the stock) in some underlying stock, like Apple. If at the end of the period the stock is above a threshold, like $80, you get your $100 back; if it is below the threshold, you get the stock instead. (The terms can depend on whether the stock ever went below the threshold and where it is at the end of the period, which makes the deal worse for the investor, but that’s the basic idea.)


What the hell is the point of this product?

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  1. Well, actually, reverse convertibles are the solution to a problem. Hence the high interest. Though many are currency based. It’s a stable form of a put-option. Normally it works like this: If you give me $1, your can sell me your Apple share for $80. This allows the person holding the Apple share to limit their loss. Usually, some law makes them do that. Like a pension fund should do this, to protect the money they invest. Basically it’s an insurance. However. The $80 is not payed until it is needed. If the person pocketing the $1 (premium) goes bankrupt before that, the pension fund lost the $1 and $80 minus what ever the going rate is when they sell the Apple share to someone else (for $70 or whatever). So that is where a reverse convertible comes in. Now, the bank holds the money, and there is no payment upfront. Note that the 10% end of period “interest” is higher than the $1 upfront premium, but that has to do with 1. the interest on the $100, and the fact that you pay $100 for a sub $80, or put an other way $20 more. But other than that, it’s basically a guarantee with a trusted party holding the money. In some countries there is also a fiscal aspect, because the $10 is called 10% interest on $100, it is taxed differently. Currently Banks are using the reverse convertible, cover part of the 10% with options on the same stock, just so they can get to hold your money. It hard for banks to get cash, and this way they can offer high interest rates, at the price of a small chance of a steep (but not total) loss. Some people are attracted to this because they think the interest on their normal savings account is to low, but they don’t want to buy stock, and they don’t believe Apple will trade below $80 if it’s currently in the money (at $100). Now most people object to this contraption because they feel people underestimate the risk. But buying a reverse convertibles is actually safer (to the financial system, not the parties involved) than writing a put option. So if you outlaw the one, you should outlaw the whole class. However, trade very heavily depends on futures, options, and even reverse convertibles. So maybe you should outlaw the selling to people in the street, or outlaw these products for amounts below $100.000, but getting rid of them will not work. In fact, people would just go back to bilateral contracts, and trade would be terrible stiffened. Big banks just should not make these contraptions consumer goods. But how can you stop a class of financial products, there are millions of ways to combine financial transactions in contracts, you would need full regulation, like for drugs. That would stifle the financial marked too. So I am afraid that the realistic view is that we are stuck with these things. Maybe education will help. And I applaud John for putting these things up. But other than that, I am a bit pessimistic. If you show people a deal that is to good to be true, still a lot of them will take it. It’s human nature, overestimate the good and underestimate the bad.


Posted on June 18th, 2009 at 10:23 by John Sinteur in category: Funny!, If you're in marketing, kill yourself, Pastafarian News


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Healthcare CEOs Shoot Themselves in the Foot

Posted on June 18th, 2009 at 9:51 by John Sinteur in category: News


The sister of an Illinois man who died of lymphoma said his policy was rescinded for the failure to report a possible aneurysm and gallstones that his physician noted in his chart but did not discuss with him.

….Late in the hearing, [Bart] Stupak, the committee chairman, put the executives on the spot. Stupak asked each of them whether he would at least commit his company to immediately stop rescissions except where they could show “intentional fraud.”

The answer from all three executives: “No.”

Rep. John Dingell (D-Mich.) said that a public insurance plan should be a part of any overhaul because it would force private companies to treat consumers fairly or risk losing them. “This is precisely why we need a public option,” Dingell said.

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Suitcase With $134 Billion Puts Dollar on Edge

Posted on June 18th, 2009 at 9:39 by John Sinteur in category: News


Two Japanese men are detained in Italy after allegedly attempting to take $134 billion worth of U.S. bonds over the border into Switzerland. Details are maddeningly sketchy, so naturally the global rumor mill is kicking into high gear.

Are these would-be smugglers agents of Kim Jong Il stashing North Korea’s cash in a Swiss vault? Bagmen for Nigerian Internet scammers? Was the money meant for terrorists looking to buy nuclear warheads? Is Japan dumping its dollars secretly? Are the bonds real or counterfeit?

The implications of the securities being legitimate would be bigger than investors may realize. At a minimum, it would suggest that the U.S. risks losing control over its monetary supply on a massive scale.


Counterfeit $100 bills are one thing; two guys with undeclared bonds including 249 certificates worth $500 million and 10 “Kennedy bonds” of $1 billion each is quite another.

The bust could be a boon for Italy. If the securities are found to be genuine, the smugglers could be fined 40 percent of the total value for attempting to take them out of the country. Not a bad payday for a government grappling with a widening budget deficit and rebuilding the town of L’Aquila, which was destroyed by an earthquake in April.

It would be terrible news for the White House. Other than the U.S., China or Japan, no other nation could theoretically move those amounts. In the absence of clear explanations coming from the Treasury, conspiracy theories are filling the void.

On his blog, the Market Ticker, Karl Denninger wonders if the Treasury “has been surreptitiously issuing bonds to, say, Japan, as a means of financing deficits that someone didn’t want reported over the last, oh, say 10 or 20 years.” Adds Denninger: “Let’s hope we get those answers, and this isn’t one of those ‘funny things’ that just disappears into the night.”

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  1. I expect we’ll get to the bottom of this about as soon as we get to the bootom of the $1 trillion Rumsfeld reported unaccounted for at the Pentagon on 9/10/01 or the $12 billion in palleted, shrink wrapped $100 bills misplaced in Iraq or … well, you get my drift.


Posted on June 18th, 2009 at 9:32 by John Sinteur in category: Cartoon


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Ten Grand is Buried Here

Posted on June 18th, 2009 at 9:28 by John Sinteur in category: Microsoft

Somehow I think this spells desparation.

Ah, I see some FireFox fan has an answer:


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  1. Let’s not forget that MS stopped making Internet Exploder for the Mac platform years ago, so they’re actually discriminating against people who don’t use Windows.

  2. You couldn’t pay me enough to move back to Windows or use any Microsoft product. Life is too short!

I bet he’s a great shoe-dodger as well!

Posted on June 18th, 2009 at 8:20 by John Sinteur in category: Funny!

And the group that rather puts down cats and dogs than find a home for them has this to say:


Friedrich says PETA supports “brushing flies away rather than killing them” and was disappointed that the President had gone ahead and squashed the pesky fly.

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