24 April 2020

Oh My God!

This is just unbelievable. For those who remember The Great Recession, also remember that name Blythe Masters
She is widely credited with creating the modern credit default swap [while working for JP Morgan], a derivative used to manage credit exposure to underlying reference entities.

The reason AIG, et al crashed not only itself(s) but the entire global economy was that the CDS was just a gambling scheme: anyone with a few bucks could bet on the failure of Corporation X. Such bettors aren't required to have any 'skin in the game', leaving the seller of CDS with, essentially, infinite exposure. Not only that, but the bettors can buy CDS against Corporation X from anyone willing to sell CDS. That's what took down AIG, et al. The best recap of Blythe's legerdemain is Salmon's.
Li's copula function was used to price hundreds of billions of dollars' worth of CDOs filled with mortgages. And because the copula function used CDS prices to calculate correlation, it was forced to confine itself to looking at the period of time when those credit default swaps had been in existence: less than a decade, a period when house prices soared. Naturally, default correlations were very low in those years. But when the mortgage boom ended abruptly and home values started falling across the country, correlations soared.

OK, so Blythe is the banker from hell more than a decade ago. So imagine my shock to see
The lawsuit also names as a defendant Phunware (PHUN), a data firm that works for President Donald Trump's reelection campaign.

Phunware, which is listed on the Nasdaq, appointed former JPMorgan exec Blythe Masters as its chair on March 30, three days after the PPP program was authorized by Congress. Masters left JPMorgan in 2014 after nearly three decades with the bank.

Phunware received a $2.85 million PPP loan through JPMorgan on April 10, according to an SEC filing. That was just two days after it applied for the loan, the lawsuit said.

Now, she's stealing from Mom and Pop and giving to the Rich. Such a nice girl.

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