Juggling Dynamite

The number of zeros involved in this story are extreme, but the human errors of over-concentration, hubris, failure to understand the mean reverting nature of cycles and a lack of risk management rules are actually very common and offer a teachable moment for everyone.

Brazilian commodity baron Eike Batista lost 99 percent of his personal fortune over the past 2 years, falling from a net worth of $35 billion to an estimated $200 million (so far) today. In this sense, it turns out Fitzgerald was wrong, the rich–even the richest in the world–aren’t that different after all. Here is a direct video link.

Here is another link.

Justice to reckless bankers this cycle has been a painfully slow process. The maniacal practices that they perpetrated on families, companies, cities, states and countries in the credit/securitization bubble caused lasting harm to real people and the global economy. The good news is that with a world now sickened by debt, the incredible profit machine for bankers has come to an end. Layoffs and downsizing in the sector are crucial progress underway in this secular consolidation phase. The vampire squids are in retreat at last. This segment offers some worthwhile discussion. Here is a direct link.

If anyone keeps SAC Capital Advisors founder Steven Cohen up at night, it’s Preet Bharara, the U.S. Attorney for the Southern District of New York. Here is a video report.

Also see DOJ Preet’s news conference on the allegations now indicted against SAC. Here is a video report.