{"id":29222,"date":"2015-05-28T22:35:33","date_gmt":"2015-05-29T03:35:33","guid":{"rendered":"http:\/\/prefblog.com\/?p=29222"},"modified":"2015-05-28T22:35:33","modified_gmt":"2015-05-29T03:35:33","slug":"may-28-2015","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=29222","title":{"rendered":"May 28, 2015"},"content":{"rendered":"

There’s more handwringing about liquidity problems<\/a>:<\/p>\n

Matt King, Citigroup\u2019s global head of credit strategy, believes Hotel Californias \u2013 credit investments where underlying liquidity will dry up quickly in the event of a sell-off \u2013 are everywhere in the current market. \u201c… [A]lmost every institutional investor, in almost every market, seems worried about liquidity. Even if it\u2019s here today, they fear it will be gone tomorrow. The growing frequency of \u2018flash crashes\u2019 and [similar but less severe] \u2018air pockets\u2019 \u2013 often without obvious cause \u2013 adds weight to their fears.\u201d<\/p>\n

Mr. King describes a number of reasons for these liquidity-driven bouts of volatility. These include the low trading volume for the underlying holdings of high-yield bond ETFs, regulations that limit market-making activities for major global banks and the huge global growth in open-ended mutual-fund investments. (Open-ended funds guarantee daily liquidity even if the fund holdings are illiquid and hard to sell.)<\/p>\n

Above all, however, Mr. King singles out a familiar target.<\/p>\n

\u201cCentral bank distortions have forced investors into positions they would not have held otherwise, and forced them to be the \u2018same way round\u2019 [similarly positioned in the market with overweights and underweights] to a much greater extent than previously \u2026. Every so often, when they start to doubt their convictions, they find that the clearing price for risk as they try to reverse positions is nowhere near where they\u2019d expected.\u201d<\/p><\/blockquote>\n

There’s a scandal brewing<\/a>:<\/p>\n

Former Speaker of the U.S. House of Representatives Dennis Hastert was indicted by a federal grand jury on charges that he evaded currency-reporting requirements and lied to the FBI as part of a hush-money scheme.<\/p>\n

Hastert, 73, withdrew $952,000 in small increments to avoid a requirement that banks report cash transactions exceeding $10,000, the U.S. Justice Department said Thursday. The withdrawals were part of a plan to give an individual who wasn\u2019t named $3.5 million as a payoff to conceal \u201cprior misconduct,\u201d Chicago U.S. Attorney Zachary Fardon said in a statement.<\/p>\n

Hastert, a Republican from Plano, Illinois, served in the House from 1987 to 2007. He became the chamber\u2019s speaker — second in line of succession to the U.S. presidency — in 1999.<\/p>\n

Starting in July 2012, Hastert began structuring withdrawals in increments of less than $10,000 to evade currency transaction reports, prosecutors said. Later, when questioned by agents of the Federal Bureau of Investigation, he told them he was keeping the cash, they said.<\/p><\/blockquote>\n

So it looks like ridiculously intrusive banking laws (and an FBI investigation of something that does not appear to be a crime!) seems to have caught another stupid person. Perhaps he can talk to Elliot Spitzer about his problems; but if he permitted himself to be blackmailed, there’s something really pathetic going on. But look at the indictment<\/a>! Police snoopery run amok:<\/p>\n

In approximately 2013, the Federal Bureau of Investigation and Internal Revenue Service, agencies within the executive branch of the Government of the United States, began investigating defendant JOHN DENNIS HASTERT\u2019s cash withdrawals as possible structuring of currency transactions to evade the reporting requirements described above.<\/p>\n

As of December 8, 2014, the following matters, among others, were material to the Federal Bureau of Investigation and Internal Revenue Service regarding possible structuring by defendant JOHN DENNIS HASTERT:<\/p>\n