LIBOR Schmibor

4 September 2007: DJIA 13,448; LIBOR 6.7975pct; Brent Crude 70.57The Brits are busting my chops. I come back from vacation, nicely rested and with a fat new portfolio of contacts I met at some of the bars down in the Keys (including a headhunter who is a good friend of John Paulson, no less), to find that interbank trading in London has gone belly up. Basically, no one trusts anyone any more. Long gone are the days when the Brits wandered round in top hats and talked in Latin to each other Dictum Meum Pactum and all that. Standards are slipping, and this is the result.Its a bad place to be, but Im now very heavily reliant on the intelligent intervention of central bankers a plain oxymoron. I need Beardy Ben to come up with a bone-crunching rate cut, and I need other central banks to start pumping cash into the system to override the liquidity crunch. If they dont open the floodgates soon, there are going to be some casualties - and Im probably invested in some of them.The problem is that no one knows who is going to go bust next. BofA has bailed out Countrywide, and Bear looks like it is a dead man walking, but there are rumors everywhere about firms that are going to the wall.Even worse, two of the banks that I have a long position in are getting some bad press with the bloggers. Personally I dont pay much attention to the sad losers who write blogs mainly people too stupid to be real journalists or analysts but there are one or two worth a look. Obviously, I am still a great follower of Jeremy Siegel, the Wizard of Wharton, who has been right on the money so far. He is almost as bullish as I am. But others are starting to worry about both Merrill and Citi, and I dont like the rumble too much. Is it too late to write some long strangles and try and salvage something from the volatility? If I did, they would have to go through a set of books that I keep in the bottom drawer I have a special mechanism for processing extra-mural activities.Theres also no point dragging down the performance of my main fund, so Im seriously thinking of transferring my C and MER positions to a different fund that some guys would probably think of as a side pocket. I dump a lot of positions into this fund when they look a little sick, hold off on regular valuations (for reasons of illiquidity, of course) and hope for divine intervention before anyone notices. If all else fails, I will just assign the losses (net of sec lending fees, which I will throw in as a bonus) across all our clients over a few quarters. Even our hotshot compliance team wont be able to track that one down.But the news not all bad. A new sales lady has started work, and shes the one I went for during the interviews. Shes called Tersha Wills, and she is HOT! She gives me the strong impression that she likes to have a good time, and so do I. I reckon shed be a fair substitute for Charlize on the speedboat. A good body on her, and she is eager to please. Shes come to us from some consulting firm thats taken millions of dollars out of us over the years so she knows the company well. Im going to take my time and play the long game. I might just leave a few reprints lying around outside her office of that HFR article about my home run performance last year, complete with a rather good photo of me in my favorite Brioni suit.Which reminds me that, whilst in the Keys, Eva gave me her latest list of demands. This is part of the price I pay for independence. We bought a townhouse in Manhattan, on East 11 St, and Eva has never stopped refurbishing it. Every time I think we are close to having the place finished, something else needs fixing. It could be that she has something going with the guy overseeing the project, or maybe shes just bored, but I could have had the Brooklyn Bridge repainted for less. The list is on my BlackBerry, as are several messages from Haresh. I dont know which I want to look at less.

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