Economic Edge

Weekly Open Thread...

noreply@blogger.com (Nathan A. Martin) — Mon, 26 Mar 2012 14:10:00 +0000

Weekly Open Thread...

noreply@blogger.com (Nathan A. Martin) — Mon, 19 Mar 2012 12:51:00 +0000

Weekly Open Thread...

noreply@blogger.com (Nathan A. Martin) — Mon, 12 Mar 2012 13:31:00 +0000

Weekly Open Thread...

noreply@blogger.com (Nathan A. Martin) — Mon, 05 Mar 2012 12:32:00 +0000

Weekly Open Thread...

noreply@blogger.com (Nathan A. Martin) — Mon, 27 Feb 2012 14:55:00 +0000

New Data Supports Previous Fairewinds Analysis, as Contamination Spreads in Japan and Worldwide

Weekend Open Thread...

noreply@blogger.com (Nathan A. Martin) — Sat, 25 Feb 2012 13:49:00 +0000

Weekly Open Thread...

noreply@blogger.com (Nathan A. Martin) — Mon, 20 Feb 2012 14:30:00 +0000

Bill Still again spells out the right way to move forward:

Weekend Open Thread...

noreply@blogger.com (Nathan A. Martin) — Sat, 18 Feb 2012 15:53:00 +0000

Weekly Open Thread...

noreply@blogger.com (Nathan A. Martin) — Wed, 15 Feb 2012 14:59:00 +0000

Announcement:

Today the Economic Edge is shifting into low gear by eliminating daily posts and transitioning to weekly open threads coupled to just occasional reports. This is a stasis condition, a partial shutdown. I encourage people to continue to post and update one another on the weekly open threads, and to check by on occasion as you never know when inspiration and time will meet to produce an article or two.

My time has simply become too limited to continue contributing on a daily basis or to even monitor the blog threads properly. Thus I have decided to act now as I don’t want to see people carry away a negative impression. I recommend that you stay informed by reading the sites on my blog list, including Fred’s new blog, “Catharsis Ours.”

It’s a mixed blessing for me personally as I enjoy spreading what I consider to be the truth – there are not enough people doing so, but trust me, I am still grounded in reality and see the game for what it is. The good news is that Gateway Yachts is growing and picking up customers and investors, and thus it is now time for me to focus on developing the very best operation I can.

All my Best,

Nate

Morning Thought - The Trouble with Politicians .....

noreply@blogger.com (fredw) — Tue, 14 Feb 2012 11:49:00 +0000

Good Morning everyone ! After reading a great comment in a greek newspaper this morning , the parallels between Greece , the US , Uk and much of the West rally came home to me. One question , simply framed indeed . Where are the Leaders ? In the US , one might wonder , who might be the next Franklin Delano Roosevelt ? In the UK , one might ask - who might arise from the muck as the next Churchill ? Can Hollande in France remove the stain of Sarkozy's reign and rise to greatness - or will he prove just another small town Mayor in well over his head ? Greek newspaer Kathimerini ( in a piece written by Alexis Papachelas ) wonders " where is the next Eleftherios Venizelos or Constatine Karmanis ? Papachelas next queries " Do any of Greece's politicians have the courage to tell people the truth about the situation and then move on to do what what needs to be done ? Can any of them look our foreign partners in the eye and negotiate ? We know the answer - and the problem isn't just in Greece . It's the sam issue here in the US regarding the quality of leadership. It's the same problem in formerly prosperous Ireland ( consider what happened when Ireland dumped the failed leadership of Taoiseach Brian Cowen of Fianna Fail - the Fine Gael Party , led by Enda Kenny has continued to same failed appeasement of the Troika and failed policy of appeasing the banksters that caused Ireland's problems in the first place).

We don't need to devote a lot of space to the US - simply ask yourself , what has been the essential difference ( when you drill down to foreign and domestic policies ) between George W Bush and Barack Obama , then ask what is the essential difference between Barack Obama and Mitt Romney ? When you get the fact that there is no essential difference , you then ponder the amateur clown show elections have become - a crass reality show ( any wonder why Trump plays the role he does ) where the pols pose as learned fools , believing they can fool the rest of us ! The embarrassment that was Herman Cain as come and gone - but why was the guy even in the race ? would you trust him handling the countries money or making critical decisions concerning foreign policy ? But do we feel any better concerning the apparent choices we will have this fall - at best , it's a choice between worse and worst ? Where are the leaders here in the US - is this truly the best we can do ?

As we consider the fate of Greece - a fate to be decide by others , consider the following thoughts . this applies to all nations , not just Greece or the Us or Ireland . Who do you want to lead your country ? Do you trust your leader or future leader to guide your country through tough times with perhaps generational consequences at stake ? Will you buy the tough sounding sound bites from the stump - only to face the reality and buyers regret later that it was all stage craft ? Are the politicians doing all they can to sabotage the political system , the financial systems and the Constitution - and are you okay with that ? Will you demand leaders that speak the truth , rather than what they think you want to hear today ? do you have the courage to demand politicians treat you as adults and not children , that meek and mild imbeciles ? Or will we collectively prove the clownsters correct in their assessment of us ? Good morning and God bless !

http://www.ekathimerini.com/4dcgi/_w_articles_wsite3_1_13/02/2012_427556

They all fall down

By Nick Malkoutzis
Collapsing buildings seem to be a good metaphor for Greece during these dark days. A number of edifices in Athens are likely to be demolished after being gutted by fire during rioting on Sunday night. The vandalism and violence destroyed what was a large and peaceful demonstration against the austerity measures in Greece’s latest loan agreement with the European Union and International Monetary Fund. The deal was approved by MPs but the turmoil this process caused within Greece’s parties emphasized that the country’s political structure is also crumbling.
While the expulsion of 43 MPs from PASOK and New Democracy for not approving the bailout was the most visible sign of a political system that is reaching the end of its days, the last week laid bare much greater inadequacies. No matter how many lawmakers are jettisoned from this hot air balloon, it won’t get off the ground again.
PASOK, which began its time in power just over two years ago with high hopes and a leader in George Papandreou who promised a new way of doing things, lies battered and beaten. It’s shedding MPs at an alarming rate and its poll ratings are about to drop through the floor. Papandreou, meanwhile, appears a little boy lost as the political rubble falls around him. More importantly, though, PASOK is absolutely devoid of ideas. It does not stand for anything after spending the last couple of years accepting the troika’s instructions with no input of its own.
New Democracy and its leader Antonis Samaras have been backed into a corner. A staunch opponent of the austerity-led philosophy of the first EU-IMF loan agreement, Samaras has been forced to argue that this time things are different. He has clung to his red line on pension cuts, hoping it will prove he is committed to the idea of not fueling the recession. But holding back the marauding troika with one hand while waving them on with the other, as was the case with a savage reduction to the minimum wage, means that Samaras is more traffic cop than five-star general in most people’s view.
The most spectacular implosion of all, however, was that of Popular Orthodox Rally (LAOS) and its leader Giorgos Karatzaferis. From his quotes by poet Constantine Cavafy and the Beatles to his claims about the German jackboot, Karatzaferis revealed himself to be nothing more than a very poor master of ceremonies in the three-ring circus of Greek politics. For all his posturing during this crisis, for all the witticisms and know-it-all comments, when the decisive moment came, Karatzaferis ran for cover. His decision to abstain from the vote will make it very difficult for him to visit village squares and claim to be the defender of the national interest. Nobody defended anything by hiding in Parliament’s corridors.
In contrast to PASOK, New Democracy and LAOS, the three parties of the left -- Coalition of the Radical Left (SYRIZA), the Communist Party (KKE) and Democratic Left -- have seen their support in the opinion polls increase. This reflects the collapse of PASOK and the rising anger with austerity measures. Yet, for those who feel the troika is dragging Greece toward a dead end, the three leftist parties have struggled to come up with credible alternatives.
KKE says Greece should stop paying its creditors but has little idea how the country, which is still running a primary budget deficit, could go on paying its own citizens. SYRIZA has suggested the threat of a disorderly default by Greece should be used as a leverage tool in negotiations, ignoring the fact that Germany and the other eurozone countries have -- with the help of the European Central Bank -- spent the last few months shoring up their defenses against such an eventuality.
Democratic Left is a little more creative in its approach. Its leader, the mild-mannered Fotis Kouvelis, suggests that some of Greece’s debt should be transferred to the ECB and that the country should issue investment bonds, as well as making more use of funds from the European Investment Bank. They are fine suggestions and show the kind of out-of-the-box thinking that was missing at the beginning of this crisis. Unfortunately, there is no longer the kind of good will for Greece within the eurozone that would make these options even remotely plausible.
In the swirl caused by the crisis, the parties have lost their relevance. Faced with the most complicated and destructive of problems, they are devoid of ideas. They offer Greeks no inspiration or shelter for voters. Some will suffer at the general elections, scheduled for April. It seems certain -- given opinion poll ratings over the last few months -- that the next government will be a coalition. These disheveled and disparate political elements will have to find a way to work together. It’s probably the greatest punishment their voters could inflict on them.
One of the reasons a coalition will be necessary is that there’s a lack of new blood in Greek politics. Those who might be tempted to hear the call are standing back. They can see the political structure ready to collapse and don’t want to be tainted with the asbestos of defunct partisanship, so they won’t enter until the whole thing has come down and the dust has settled.
As long as this persists, Greece will go through a strange transition phase where the discredited will continue to hold power. The next government will likely have to be based on cooperation between PASOK and New Democracy. But they might not be able to form a government on their own. Given that all the other parties -- bar the tiny Democratic Alliance -- oppose the EU-IMF loan agreement, what basis will there be for a coalition?
This is where we get into really dangerous territory because the eurozone and the IMF are only agreeing to provide loans to Greece on the basis that its government is fully committed to the terms of the agreement. A coalition that would include Democratic Left, for instance, might not be in a position to offer this commitment.
This means that within the next couple of months, the wishes of Greece’s lenders could come into direct conflict with the will of the Greek people. The eurozone has essentially already set out what kind of government it wants after the snap election. Greek voters won’t necessarily want to comply with these wishes. The respect for democratic principles that the European Union was meant to uphold could face its most severe test yet. Another edifice -- the biggest and grandest of them all -- could also come tumbling down.

Morning Thought - The Battles Between Greece And The Troikans Are just Warming Up !

noreply@blogger.com (fredw) — Mon, 13 Feb 2012 12:19:00 +0000

http://fredw-catharsisours.blogspot.com/2012/02/real-games-in-greece-and-with-troikans.html

Good morning ! Hope everyone had a great weekend , hope it was productive , restful and that we're already to spring into the new week. As the embers from the Grecian fires cool this today - with at least forty building destroyed during the carnage of protests / rioting brought about by the debate and passage of the so called Greek Rescue Bill in Parliament , let's consider where things stand after the vote ? Has Greece been pulled back from the brink by the latest heroic vote ( they are going to run out of heros shortly , like the police ran out of tear gas yesterday. )

Actually , there still remains a considerable amount of conditionality in place to stymie any quick action to release the needed funds to Greece ( or though Greece to the banksters ) . Let's walk through the conditions one by one . First of all , joker number one :

1) The EuroGroup of finance Ministers , which meets Wednesday , must agree that Greece has now met the terms of the package

An interesting place to start - as the Memorandum of Understand had a blank space for the amount of the bailout ( as I recall ) , so what exactly are the terms of the Agreement when something as notable of the sum involved is not set forth ? As you may recall , one issue last week and a reason for the withdrawal of Laos was the complaint by their party chief that pages were missing from the documents provided to him to approve. And what about the additional 43o million of additional cuts Greece still must find by Wednesday ? And since it's monday , what new demands have the Troikans cooked up over the weekend ? I guess we'll see how this plays out over the next day or so , but the bottom line is the nature and details of the M.O.U appear to be opaque.

2) The leaders of the Greek Political parties must pledge in writing that it will implement the complete rescue plan and that no attempts to renegotiate or otherwise repudiate said rescue package will be made.

There are two parties in the Coaltion after the resignation Laos - Pasok and New Democracy. Regarding Pasok , it has a nominal head ( G-Pap ) of the party , the power behind the throne and Troika tool in FM Venizelos and they are steeped in disarray having expelled twenty + members yesterday who revolted against voting yes for the bailout deal - their polling numbers are about 8 percent . New Democracy faces similar disarray ( they also expelled twenty plus members yesterday ) , poll better than Pasok and currently are expected to win elections in April or perhaps sooner than that. the problem is New Democracy chief Samaras has repeated expressed his goal of renegotiating the Rescue deal for Greece - which cuts against the idea of binding guarantees / pledges / promises / sweet lies. Absent surrender by Pasok and New Democracy to the total satisfaction of the Troika and Germany led AAA Eurozone club , Greece doesn't get a euro.

3) The German Bundestage must vote to approve the package , probably on Febuary 27th.

Germany Finance Minister Schauble and their Economic Minister Rosler have already thrown some doubt as to what Germany will do - saying in essence , the Greek vote was nice , now prove to us that you actually will take concrete steps to actually implement the deal ( rather blow smoke as past practice has shown th Greks to do. ) Apart from Greece " proving " it will actually implement all terms of the deal , the German approval is conditional upon a Troikan report blessing the deal - who knows what the Troikans plan to say in that report ? In light of worsening economic condition in Greece ( un- employment almost 21 percent , Revenues including VAT falling off a cliff , industrial and manufacturing capacity falling off a cliff ) , how can we see a sunny report from the Troikans ? And besides , aren't the Troikans really trying to make a point to the rest of the PIIGS with how they're treating Greece - as in Portugal , Ireland , Spain and Italy shouldn't try to go Greek or face the fire and wrath Greece has suffered ? Isn't that what German FM Schauble alluded to in his discussions with Portugal's FM Gaspar ?

4) The PSI Deal must be concluded

Today is Febuary 13th and no final offer has been presented to the so called private investors. Either the 13th or 15th represent the latest so called deadlines for the final offer - but missing a deadline , what else is new ? the real deadline for conclusion is March 20th when the 14.5 billion euro bond payment comes due. So , there remains about 5 weeks to conclude the PSI - barely time to run through all of the hoops to determine what the private investors might do , barely time to take all of the steps necessary to put the PSI debt swap in motion - and that assumes a deal was in place today. As 100 percent acceptance is necessary and that looks unlikely , do we see the Greek Parliament pas a Collective Action Law to force recalcitrant private investors to take the deal ? Who presently hold the english law bonds of Greece which won't be as easily crammed down investor throats ( when compared to greek law bonds ) ? What is the real timeline and associated deadlines for presentation of the final offer to private investors , their acceptance or rejection of the private investors , the passage of a C.A.C law and the March 20th payment which is the ultimate deadline for Greece ? If Greece can't make the payment on time , will the Troikans present Greece with bridge loan financing or roll the March 20th bond payment into either the second bailout deal or the PSI deal ? the answers are - no one knows.

Looking quickly at everything, expect the morning relief rally to process to evening indigestion......

The Real Games In Greece and with the Troikans have begun !

http://www.guardian.co.uk/business/2012/feb/13/eurozone-crisis-greece-austerity-package-vote

7.50am: The scenes of mayhem on the streets of Athens last night, and in other parts of Greece, show the depth of public anger against the package. As we reported last night:

More than 40 buildings were set ablaze in an orgy of looting that left scores injured as protesters vented their anger at the caretaker government and parliament's ordering of a further €3.3bn of savings by slashing wages and pensions and laying off public sector workers.

Photograph: Angelos Tzortzinis/AFP/Getty Images

This picture from last night shows protesters running away from teargas during clashes between protesters and riot police near the Greek parliament.

Prime minister Lucas Papademos warned that banks would collapse and schools and hospitals would be left without funds unless the bill passed. But 43 MPs failed to back the bill, with some arguing that Greece would be better off refusing to implement the measures and defaulting its debts. All those MPs have now been expelled from the coalition government.

7.57am: Germany's economy minister has warned that last night's vote will not be enough to guarantee that Greece receives its €130bn bailout.

Speaking earlier this morning, Phillip Rösler said the vote was merely a "necessary condition" on the path to Greece's second rescue package, as Athens must also prove that the measures will be implemented.

Rösler added that the German parliament must receive a report on Greece from the Troika [the IMF, the EU and the ECB] before deciding whether to give its approval for the bailout fund.

That vote is expected to take place in the Bundestag on 27 February.

8.22am: Greece must still clear four hurdles before it receives its €130bn bailout package.

1) The eurogroup of finance ministers, which meets on Wednesday night, must agree that it has now met the terms of the package
2) The leaders of its political parties must pledge in writing that they will implement it.
3) The German Bundestag must vote to approve the package, probably on February 27th.
4) The long-running negotiations with its creditors over debt restructuring (the Private Sector Involvement) must be concluded.

Gilles Moer of Deutche Bank told Bloomberg TV this morning that it is essential for Greece to maintain its credibility with its international partners. He said that the demand for Greece's leaders to make a commitment in writing "shows the pressure that the Troika is still prepared to put on Greece".

8.30am: City analysts are speculating that the situation in Greece could be thrown into confusion in a couple of months if Antonis Samaras, head of the New Democracy party, becomes Greece's next prime minister.

Samaras, the current front-runner to replace Lucas Papademos, told parliament last night: "I ask you to vote in favour of the new loan agreement today and to have the ability to negotiate and change the current policy which has been forced on us".

That would rather thwart the Troika's demands that Greece's leaders all pledge to implement the current plan, as Megan Greene of Roubini Economics pointed out on Twitter:

Samaras also said his party will "demand the dissolution of parliament and immediate elections" once the second rescue deal is ageed.

Elisabeth Afseth, analyst at Investec, also warned this morning that "the next Greek crisis is then likely to come with the approaching election". New Democracy wants that vote to be held in April......

9.16am: In Greece, Athenians are facing the aftermath of last night's savage street fighting, which lasted for around 10 hours.

A firefighter extinguishes a smouldering building in central Athens today. Photograph: Dimitri Messinis/AP

Helena Smith, our correspondent in Athens, says that parts of Athens' historic centre now lies in tatters. There are burned out shells of buildings, including some of the capital's fabulous 19th century edifices. Shops have been looted and smashed, and cafes are still smouldering this morning.

Helena reports:

Unsurprisingly, the vandalism made for as much coverage in the press this morning as the austerity measures Greeks will have to endure for the best part of the next decade to make their nation's debt mountain even begin to look sustainable.

"Yes through fire and tears," Ta Nea, the mass-selling daily, proclaimed from its front page in reference to the vote's passage.

But it should be pointed out, as this appears to have been lost in coverage, that it was unidentifiable hooded youths hijacking an otherwise peaceful anti-austerity demonstration who were behind the violence, not hard-working Greeks badly hit by tax hikes and repeated wage and pension cuts who took to the streets not because they wanted a fight but to vent their spleen.
They are as shell-shocked as the shop-owners who turned up to work this morning to find their properties in tatters.

12.01pm: Just in – a Greek government spokesman has said that general elections will be held in Greece in April.

Spokesman Pantelis Kapsis told reporters in Athens:

The bond swap will be concluded in March.....Elections will be held in April.

(That's via Reuters)

Ths news will please New Democracy, the centre-right party that has been demanding an early ballot. It will not delight Pasok, the socialist party whose popularity has plunged since the crisis escalated.

11.56am: The body that represents Greece's retail industry has warned today that last night's vote will not spare the country from bankruptcy.

Vassilis Korkidis, the head of the National Confederation of Greek Commerce, said in a statement that:

Yesterday's vote in the parliament may have saved the country temporarily from default, but the Greek economy is going bankrupt and the country's political system is failing.

Stay tuned ! Makes one wonder whether there are the Ides of Febuary ?

What " Troika " Will Come To discus things With The US ? Weekend Thread is open !

noreply@blogger.com (fredw) — Sat, 11 Feb 2012 18:09:00 +0000

As we consider the situation in Greece , consider what comes down the line for Portugal , Ireland , Spain and Italy , wonder how long Japan can manage to sell their debt internally while their demographics just get worse year after year , let's consider the Us for a minute - and who will come sit down with America's leaders ? In Europe , the taskmasters have become known as the troika - comprised of the EU , ECB and IMF. We have seen their work and their intentions , if Greece provides clues as to a modus operandi. However , as the Eurozone implodes over the next few years , certainly that " Troika " won'r be available to rescue the US. Who might the new Troika be ? Well , assume the IMF will be in the mix. As the two sources of wealth presently are in the Middl e East and Asia , might one of the two other club members consist of the oil producing nations of the GCC ? If Iran gets caught in the trap being prepared and Libya has already fallen to the coup led by " Al Qaeda " operatives and selected frontmen hand- picked by the West , the GCC certainly would be a deep pocket unscathed by revolutions engineered by interested parties. As far as Asia , might we see the Shanghai Cooperative play a major role in giving dictates to the US ? Again , if China is going to play a role in " greeking " the US , there already is a vehicle in which they ( along with Russia ) , have a controlling interest and there would be no need for China to beg for influence ( as compared with the IMF ) . So imagine a Troika of the IMF , GCC and Shanghais Cooperative descending to set things straight - will the sheeple wake up ? What does the US military and militarized police forces do in response ? How much time might we have to ponder this anyway ? consider the information below as a forecast for stormy weather !

The US election is a Farce played as a charade !

http://www.zerohedge.com/news/time-next-us-presidential-campaign-241-trillion-debt-1389-debtgdp

This Time Next US Presidential Campaign: $24.1 Trillion In Debt, 138.9% Debt/GDP

Submitted by Tyler Durden on 02/11/2012 12:18 -0500

While Obama may or may not be on the way to winning his reelection, courtesy of a GOP field that is, to say the least, limited, and where the only worthy candidate is more ostracized by the right than even anyone on the left, the bottom line is that whoever wins the presidency, it will matter precisely didley squat. As the US debt clock shows, fast forwarding 4 years, or to February 2016, when the next presidential race will be in its final stretch, America will have $24.1 trillion in debt, about $9 trillion more than it does, now on $17.4 trillion in GDP, for a gross debt to GDP ratio of 138.9% (and Apple's $1 trillion market cap will account for 150% of the Nasdaq... just as IBM is 125% of the DJIA). Needless to say, it will be long past game over at that point confirming that the current presidential race, with its exciting tangential detours into female fertility, moon bases, LBO IRR maximization courtesy of cost-cutting, is completely and utterly meaningless. Also, keep in mind, "at current rates" for an endspiel that has now entered the exponential phase in virtually every category, is to say the least, optimistic. Yes, interest rates may be negative in 2016, but that means that the liquidity trap endgame has not only begun, but is well on its way to ending, and mercifully putting an end to this whole Keynesian "sustainability" charade. Remember: Japan's debt-deflation lasted for 30 years only thanks to new pockets of incremental global leverage and inflation: China and the PIIGS. This time, absent the levering of the entire continent of Africa, there is noone who can take the releverage baton and run. Which means the only "buyers" will be the central banks. At least back in the day, Weimar just one nation. This time, it will be the "Weimar World."

Evening post - Take A gander At Belgium And Then Greece And Ask How Long Before Belgium Goes Boom ?

noreply@blogger.com (fredw) — Sat, 11 Feb 2012 01:39:00 +0000

Scenes From Belgium ! Yeah , Belgium , not Greece !

Many Occupy protesters who have been pepper sprayed or injured by police might be interested in what unfolded in Belgium as firefighters marched in opposition to proposed benefit cuts.
The Guardian and Russia Today have video footage of firemen soaking police officers with high-power hoses during a protest in Brussels. Russia Today's video shows police standing passively while their riot shields drip with water.
According to the Guardian, firefighters are upset over plans to raise their early retirement age.
The government's plans come as Press TV reportsthat economic data show Belgium was the first eurozone member to slip into recession in the second half of last year.
Belgium's planning bureau says the government must find 2.5 billion euros in either spending cuts or new revenue to close its current budget deficit, according to Bloomberg News.

Belgian Firefighters Hose Down Cops In Protest (VIDEO)

First Posted: 02/10/2012 4:04 pm Updated: 02/10/2012 5:49 pm

http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_20135_10/02/2012_427224

Meanwhile in Greece..... laundry list for Parliament - by next Wednesday ?

The 30 measures Athens must pass

The interventions that form a condition for the first tranche of the new package

By Sotiris Nikas
Thirty tough legislative interventions affecting key sectors have to be rushed through Parliament for the government to secure the first tranche of the new bailout package. The measures are the following:
- Reductions in pharmaceutical spending by 1.076 billion euros, in defens by 300 million euros, in arms by 300 million euros and in doctors’ overtime by 50 million euros.
- The abolition of 550 deputy mayor posts, saving 30 million euros.
- Cuts in consumer spending and election allowances amounting to 270 million euros, in other allowances and grants by 190 million euros, and in the Public Investment Program by 400 million euros.
- Ministerial decisions for the application of objective criteria for the self-employed, for the full application of the single salary system for all state corporations, for the Public Power Corporation to pay its revenues from the special property tax paid through the electricity bills to the state within two days (instead of 20), and on the cost of permits for new trucks for public use.
- A 22 percent reduction of the minimum wage, with people below the age of 25 years taking a 32 percent cut.
- The suspension of the additional allowance for every two years of work that civil servants were paid.
- The maximum period for collective labor contracts to be set at three years, the duration of existing contracts to be up to one year, the extension of expired contracts to be by just three months. Other allowances for past experience, children etc will be maintained after contract expiry until a new contract is signed.
- An end to the unilateral resort to arbitration and to contracts with a specific time limit that expire with retirement.

- The reduction of social security contributions by 2 percent.
- The abolition of the organizations providing state-subsidized housing (OEK and OEE).
- The amendment of regulations for expired debts.
- The completion of inspections for value-added tax payment.
- A pension cut in healthy funds by 15 percent and by the same rate in auxiliary pensions, whose funds will also be reformed.
- A restructuring of the banking system and strengthening of the fund safeguarding bank deposits.
- A revision of the operation of the Credit Stability Fund.
- The deregulation of 17 closed-shop professions.

Friday Open thread - Scenes From Greece !

noreply@blogger.com (fredw) — Fri, 10 Feb 2012 13:38:00 +0000

Greece Reacts To the Games Played In Brussels !

Eurozone crisis live: Clashes as Greeks protest over bailout deal

• Tear gas fired during Athens protests
• Laos leader: Greece's dignity has been stolen
• Venizelos: Greece must decide whether to remain in the euro
• No disembursement without implementation
• Another MP resigns

Protesters are gathering outside the Greek Parliament in Athens. Photograph: Simela Pantzartzi/EPA

12.46pm: This second picture from Athens shows a petrol bomb exploding near riot police.

A petrol bomb explodes near riot police during protests against planned reforms by Greece's coalition government in Athens. Photograph: Yiorgos Karahalis/Reuters

We don't yet know whether there were any injuries.

12.42pm: We have more pictures from today's protests in Athens.

This image shows demonstrators who have been detained by riot police.

12.38pm: An independent MP named Milena Apostalaki (formerly of Pasok) has announced that she will not vote for the austerity measures when they come before the Greek parliament (probably on Sunday).

Apostalaki's move comes amid mounting speculation that MPs will be ordered to vote in favour of the package.

That, Helena Smith says, will be very unpopular -- many MPs want to vote against the deepy unpopular package.

12.26pm: The euro has fallen sharply since Karatzaferis began his press conference -- losing almost a cent against the US dollar to $1.3204.

LAOS leader says will not vote for debt deal

Karatzaferis calls on PM to replace PASOK MPs in Cabinet with technocrats

The leader of the rightwing Popular Orthodox Rally (LAOS), Georgios Karatzaferis, on Friday called on Prime Minister Lucas Papademos to reshuffle his government, installing technocrats in the place of Socialist PASOK ministers, adding that he would not approve a new debt deal agreed between the government and foreign creditors but neither would he withdraw from the coalition as he had threatened to do earlier this week.
"The creditors are asking for 40 years of submission,» Karatzaferis told a press conference. «Greece will not give itself up,» he said, adding that «Greece can survive outside the EU but cannot survive under a German boot.»
Insisting that the creditors' insistence on cuts to auxiliary pensions had been the last straw, he said that had the cuts passed, the leader of the mission of the International Monetary Fund in Greece, Poul Thomsen, would be 'persona non grata' in the country.
The rightwing leader accused the creditors of trying to «deprive Greece of the last trace of national sovereignty,» and said that the country should be given a five-year grace period to pay off its debts at a favorable interest rate.
karatzaferis did not determine whether his party's 16 MPs to approve new austerity measures in a parliamentary vote expected on Sunday or Monday. If his deputies vote down the bill, the government will retain a comfortable majority of 236 in the 300-seat House. But his party's votes would be useful as several coalition MPs in both PASOK and New Democracy have indicated that they object to certain measures and may vote against them.
Speaking an hour before a scheduled Cabinet meeting, Karatzaferis repeated an earlier demand for Papademos to replace ministers of PASOK with technocrats.

Good Morning ! After the games played By Germany , The EU , the IMF - are we shocked today that Greece is not reacting kindly to being toyed with ? No , the reaction should have ben expected - so let's assume that it was expected . Is this what Germany , the IMF and EU truly wanted - a greek revolt , the rejection of the ever changing bailout demands from the Troika , a reaction to the increasingly public humiliation ? And wait until Greece digests the German FM Schauble's sidebar discussion with FM Gaspar of Portugal ! That will go over as well as the cup of hemlock Socrates sipped ! Check the link - if you speak portuguese , you can follow the conversation by reading the original piece in Pais !

http://fredw-catharsisours.blogspot.com/2012/02/schauble-caught-on-video-promising.html

http://economia.publico.pt/Noticia/gaspar-agradece-disponibilidade-alema-para-flexibilizar-ajuda-a-portugal-1533079

Of course , why in the world would Gaspar believe , let alone trust FM Schauble ? After watching the treatment games played with the greeks , is he naive enough to believe Portugal will get a different deal ? What Gaspar should have taken from the Greece situation was that after negotiating endlessly with the Troika , the Troika let PM L-Pap and the greek party leaders batter themselves bloody , expend their political capital , exhaust the patience of their party MPs - and then after meeting the Troika terms , Juncker , Schauble and Lagarde in term tell Greece they haven't done enough , they will need to cut more , they will have to find spending cuts above the prioe Troika demands , they give them another deadline and three conditions to meet or else ? In short , the Troika totally shoved the deal up their..... nose ( or you pick another place if you care to do so ) . That is the lesson for Portugal , Ireland , Spain and Italy - no matter how much you play the lapdog role ( Ireland and Portugal ) , regardless of whether you silently standby and hope ( Spain ) or whether you think you're more important then you really are - even if you present still can schedule a meeting with Obama that actually occurs and he pats your head and smiles at you ( PM Monti and Italy ).

Meanwhile , today markets are shocked that bad news can actually make stocks in Europe and US Futures go down ( naturally the sill melt up since the end of the year has provided a nice cushion for whenever a meltdown occurs ) , the euro has shocked traders by actually showing it can go down on shocking bad news , gold has sold off as the hopium for Greece has met the light of day , amazing a two day strike is viewed as bad news today and bloody protest and fighting police isn't a cause for celebration ? who could have seen this coming ? Oh well , give things a few minutes - some joker will start pumping the notion a greek default is a good news as QE 3 will be just around the corner ! Lol - And on that note , what's on your mind today ?

Good Evening ! Something To Ponder on Greece , German Intentions and What Does The Troika Really Want ?

noreply@blogger.com (fredw) — Fri, 10 Feb 2012 01:06:00 +0000

Is A Deal With Greece Truly Sought By Germany and the IMF ?

In what would amount to an extraordinary extension of European Union control over a member state, the new commissioner would have the power to veto budget decisions taken by the Greek government if they were not in line with targets set by international lenders. The new administrator, appointed by other eurozone finance ministers, would take responsibility for overseeing “all major blocks of expenditure” by the Greek government.

Even before Germany circulated its proposal, the EU and International Monetary Fund had presented a 10-page list of “prior actions” Athens must implement before the new bail-out is agreed. According to a copy of the document, also obtained by the FT, Greece must cut an additional 150,000 government jobs within three years.

Then consider this item :

2 ) http://globaleconomicanalysis.blogspot.com/2012/02/new-merkozy-proposal-i-will-give-you.html

European officials are insisting any new Greek bail-out programme specifically earmark funds to pay off remaining holders of Greek debt, giving lenders the freedom to withhold aid to Athens without risking a messy default that could reignite panic in financial markets.Under a new Franco-German plan that senior European officials said is likely to be included in a new Greek rescue, eurozone officials would create an escrow account to accept new bail-out funding instead of paying it all directly to Athens as in the past.

The new fund would then ensure bondholders are paid off, while additional cash to run the Greek government could still be withheld if Athens did not live up to tough new reform demands.

Eurozone officials said they believed the escrow account would give European Union and International Monetary Fund lenders strong control over Greece’s use of bail-out funds without stripping Athens of its budgetary sovereignty

“This is a better idea than the proposal of a debt commissar,” said the senior French official. “It is more acceptable.”
That was followed by this move :

3 ) In addition to the Spaghetti-O loop, Eurointelligence discusses the "Salami Roadblock".

According to Financial Times Deutschland, Wolfgang Schäuble now wants the Bundestag to vote only on a fraction of €30bn out of the total cost of the second Greek rescue package of €130bn. He is supported by the finance ministers of the Netherlands and Finland who met as part of the secret meeting AAA-rated ministers. The reason for this unexpected move is that the coalition has reason to fear that the general exasperation about the lack of progress in Greece made it uncertain that it would be unable to get the necessary parliamentary for the whole package. Also the coalition wants to keep up maximum pressure on Greece. In Brussels the Berlin, the move was greeted with surprise and irritation, the paper reports.

And then this followed - note this followed items 1-3 above :

4 ) http://www.reuters.com/article/2012/02/07/us-merkel-euro-idUSTRE8161Z620120207

(Reuters) - German Chancellor Angela Merkel said on Tuesday she did not want to see Greece being forced out of the euro, warning that this would have "unforeseeable consequences."

"I will have no part in forcing Greece out of the euro," she said in response to a question from a Greek student at a meeting with young people in a Berlin museum.

Talking shortly after feuding Greek political leaders postponed a meeting scheduled for Tuesday on the conditions for a 130 billion euro second bailout package, the chancellor said there was no alternative for Greece to painful reforms.

"We don't do it to make things difficult for people, what would be our interest in doing that? But we want to reach a point where Greece can, with European help, live off its resources," said Merkel.

"Nobody wants to force reforms on them from outside," she said.

To be followed by these moves earlier today by Germany and the IMF working hand in hand :

5 ) Greek Deal Done?

Earlier today we heard Greece accepted a deal. Not so fast. The Washington Post reports German FinMin: Greek deal on spending cuts appears to not yet fulfill bailout conditions

That title was the entirety of the article.

IMF Says No Deal

Zero Hedge reports Greek Deal Done? Not So Fast Says IMF

IMF SAYS IT'S NOT FORCING AUSTERITY ON GREECE AS TALKS CONTINUE - BBG
RICE SAYS IMF "WELL AWARE HOW DIFFICULT' IT IS FOR GREECE - BBG
IMF'S RICE SAYS IMF MINDFUL OF `HARDSHIPS' IN GREEK PROGRAM - BBG
RICE DECLINES TO SAY WHAT IMF SHARE OF NEXT GREEK LOAN WILL BE - BBG
IMF SAYS 'PRIOR ACTIONS' LIKELY TO BE REQUIRED BEFORE FUND OK OF NEW GREEK LOAN PROGRAM - DOW JONES

and the pre- coup de grace :

6 ) : http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_27963_09/02/2012_427052

Eurogroup's turn to make Greece wait for bailout deal

Despite last-minute scrambling to secure a deal between the leaders of the three parties in the coalition government on the terms of a new bailout, Greece was given the cold shoulder on Thursday by its eurozone partners, who said Athens would have to wait to find out if it will receive at least 130 billion euros in new loans.
Prime Minister Lucas Papademos managed to secure an agreement between the party leaders at around 3 p.m. after deciding to bring forward some wage cuts at public enterprises and increase the reduction in defense spending in order to save 625 million euros, which would allow cuts to pensions to be limited to levels that were acceptable for all three leaders.
The agreement came a few hours before the Eurogroup meeting of finance ministers in Brussels by Greece’s representative, Evangelos Venizelos, who soon discovered that the rest of the eurozone was in no mood to give the green light for funding just yet.
“The agreement, as far as I understand, is not at a stage where it can be signed off,” said German Finance Minister Wolfgang Schaeuble. He said the talks were being held to “make clear to Greece and the partners in the negotiations what the conditions for a second agreement are.”
The head of the Eurogroup, Jean-Claude Juncker, said that there were still several points to clear up. “If it is not tonight, it will be done next week,” he said.
The tenuous deal reached in Athens followed a night of tense negotiations on Wednesday. Talks between Papademos and the heads of the three parties in his coalition government - PASOK leader George Papandreou, New Democracy’s Antonis Samaras and right-wing Popular Orthodox Rally (LAOS) chief Giorgos Karatzaferis - started at 5 p.m. on Wednesday and dragged on for seven hours due to objections over proposed cuts to auxiliary pensions. The most vehement in his opposition was Samaras, but it was Karatzaferis’s departure that caused waves as he indicated that he might withdraw from the government.

Papademos resumed talks with creditors, which continued into the early hours, and his office issued a statement in the early hours of Thursday morning, saying that a “broad agreement” had been reached with the exception of one issue, referring to the pensions cuts. Venizelos was forced to travel to Brussels with an incomplete deal but subsequent talks between Papademos and Samaras on Thursday morning fleshed out the agreement.

Followed by the coup de grace - after all of the wrangling , Juncker tells Greece find 325 million more in new spending cuts and find it by next Wednesday :

7 ) : http://www.bloomberg.com/news/2012-02-09/greece-rebuffed-on-aid-package-as-austerity-vote-raises-risk-of-euro-exit.html

European finance ministers held back a rescue package for Greece in a rebuff that left lawmakers in Athens under government pressure to endorse a newly minted austerity plan or exit the euro.

“In short: no disbursement without implementation,” Luxembourg Prime Minister Jean-Claude Juncker said in Brussels late yesterday after chairing emergency talks of euro-area policy makers. He set another extraordinary meeting for Feb. 15.

and.....

http://www.bloomberg.com/news/2012-02-09/greece-must-pass-austerity-plan-into-law-to-get-troika-aid-juncker-says.html

Greece must pass its latest austerity package into law and identify 325 million euros in spending cuts before euro-area governments endorse a second bailout for the country, Luxembourg Prime Minister Jean-Claude Juncker said.

“Despite the important progress achieved over the last days we didn’t yet have all necessary elements on the table to take decisions today,” Juncker said in Brussels after chairing an emergency meeting of euro-area finance ministers.

Greek politicial leaders must also back the pact and provide assurances it will be carried through after forthcoming elections, Juncker said. European finance ministers will meet again next week.

“In short: no disbursement before implementation,” Juncker said.

The finance ministers will meet again on Feb. 15, he said.

Reaction from greek pols and the greek street has been swift and predictable :

1 ) : http://www.athensnews.gr/portal/1/53189

Deputy Employment Minister Yiannis Koutsoukos has resigned over drastic new austerity measures agreed by the coalition government.

2 ) : http://www.athensnews.gr/portal/1/53180

Former New Democracy MP, Yiannis Manolis, and long-time party trade unionist, on Thursday morning tendered his resignation from the post of secretary of the ND division on trade union issues.

3 ) : http://www.ekathimerini.com/4dcgi/_w_articles_wsite1_17836_09/02/2012_427026

Unions call two-day strike, announce protest rallies

Greece’s two main labor unions called a 48-hour strike on Thursday to protest the austerity measures in Greece’s potential loan agreement with the European Union and the International Monetary Fund.
The strike, which will affect public transport today and tomorrow, will be accompanied by three days of demonstrations.
Today and tomorrow, rallies will be held in central Athens from 11 a.m.
On Sunday, there are plans to hold a protest from 5 p.m., possibly to coincide with a vote on the terms of the loan agreement in Parliament.
Greece’s two largest unions -- GSEE, representing the private sector, and ADEDY, representing the public sector -- have backed the action.
There will be no public transport apart from the Kifissia-Piraeus electric railway (ISAP) between 10 a.m. and 5 p.m.
Ferries will also remain in port.

So I ask , does Germany really want Greece to stay or " Voluntarily " choose to leave ? You decide what seems to be the case......

Thursday Thought And Open Thread !

noreply@blogger.com (fredw) — Thu, 09 Feb 2012 14:12:00 +0000

Good morning ! As we wait for details on the Second Rescue Deal that the greek parties , PM L-Pap and the Troika have struck ( while we also wait to see whether the greek Parliament and the greek street will tolerate the latest assaults ) , let's look at other items coming down the line. As austerity has struck , unemployment has continued to ramp up faster than the lies out of politician's mouth - looking at the numbers from November , unemployment has now hit 20.9 percent , up from 18.2 a month earlier! Correspondingly , manufacturing output contracted by 15.5 percent in December ( year over year ) , Industrial output fell by 11.3 percent , compared to - 7.83 percent in November ! Does anyone realistically believe further harsh austerity measures will improve one bloody thing for Greece ? As Greece copes with depression , spain , Portugal and Italy have recession looming or underway - with further austerity coming down the line , we already hear cries for debt renegotiation coming from the Unions in Portugal ,as well as the Finance Minister of Ireland. spain and Italy have been silent for now , how long do we expect that to continue ? In light of the already fragile economic conditions in Greece , Italy and Spain - factor in the impact of the EU boycott on oil from Iran - how can this not totally scotch whatever carefully considered budgetary plans drawn up for these nations ? One that note , consider the following !

Spain pain: ‘Iran oil embargo to backfire on Madrid’

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Published: 09 February, 2012, 00:46

Madrid is becoming concerned at how it is going to compensate for the half of its oil imports which will be lost due to the EU embargo on Iranian oil. The economic crisis is only adding to Spain’s woes.

“Spain is suffering the greatest damage from the embargoes against Iran and has always expressed support for the resumption of talks,” said Pedro Antonio Villena Perez, Spain’s new ambassador to Iran on Tuesday in Tehran, as quoted by Iran’s Press TV.

Perez pointed out that Madrid is not among the countries supporting the ban on Iran’s oil and banking sector.

Spain, like Greece and Italy, is among the EU's biggest importers of Iranian oil. Under the embargo agreed on January 23, they only have until July 1st to find alternative crude supplies.

Madrid imports almost all the oil it consumes for its energy and manufacturing sectors. Before the Libyan political crisis, Iranian oil accounted for some 20 per cent of Spain’s supplies. But this last year this figure has grown to 50 per cent. Sanctions on Iran pose an explicit threat to Spain’s energy, 80 per cent of which comes from oil.

“Spain never wanted this embargo. This decision comes externally, through US pressure on the EU. It is not just a question of economy. It calls into question Spain’s autonomy in making foreign policy decisions,” Miguel-Anxo Murado, a Spanish journalist and writer, told RT.

Evening Posting ! What Does Farce Descend into After Its Phase Has Come And Gone ?

noreply@blogger.com (fredw) — Thu, 09 Feb 2012 01:03:00 +0000

History Repeats Itself , First As Tragedy , then as Farce ............And Then As Fricking Greece ?

Extending upon the classic and oft quoted observation of Marx (from " The Eighteenth Brumaire ' ) , note the second " then " and following commentary on modern Greece. Further observation apropos from Karl M include " Every giant...presupposes a dwarf , every genius a hidebound philistine ....The first are too great for this world, and so they are thrown out. But the latter strike root in it and remain.... Caesar the hero leaves behind him the play-acting Octavius, Emperor Napoleon the bourgeois king Louis Phillippe......( K.Marx - Scorpion and Felix ) .

I'll let you choose who plays the giant versus dwarf , genius versus philistine ... without further ado , here's today's stirring confusion from Greece ! By the way , did you notice the commentary from Ireland today ? Finance Minister specifically put the ECB and EU on notice they want the same treatment as Greece - and the deal hasn't even been completed yet ! Lol How long before Spain , Italy and Portugal say me too , guys ? My thought - not long at all. Of course , assuming a deal is reached with the greek political party chiefs and L-Pap - and accepted by the Troika , can it pass in Parliament ? I would say don't be sure of that , lots of rumblings go on there ( check the comments for related articles to come !

Greek Meeting Ends Without Conclusion: LAOS Head Refuses To Sign Deal

Submitted by Tyler Durden on 02/08/2012 17:50 -0500

Bloomberg reports that at almost 1 am local time, the Greek government meeting has broken up, and the head of LAOS is speaking, and by the looks of things, is not going along with the program:

KARATZAFERIS SAYS HE DID NOT HAVE ENOUGH TIME TO STUDY MEASURES

KARATZAFERIS SAYS HE NEEDS LEGAL ASSURANCES ON MEASURES

KARATZAFERIS SAYS HE MIGHT CONTINUE TO SUPPORT THE GOVERNMENT DESPITE NOT AGREEING TO DEAL

KARATZAFERIS SAYS HE MADE HIS POSITIONS CLEAR EARLY IN MEETING

KARATZAFERIS SAYS HE APPRECIATES THE PREMIER'S EFFORTS

KARATZAFERIS SUPPORTED ND LEADER ON ISSUE OF PENSIONS

Translation: no deal. And, dum dum dum, another headlines says that the Troika is now back in Papademos' office. The suspense builds.

In other rheotrical statements, got ink?

and also.....

Papademos Says Outstanding Issues Remain, EURUSD Slides

Submitted by Tyler Durden on 02/08/2012 18:09 -0500

Greece

Reality

Another day, another delay, and still nothing is done.

GREEK PREMIER SAYS OUTSTANDING ISSUE NEEDS FURTHER WORK

GREEK PREMIER SAYS DISCUSSION TO CONTINUE ON OUTSTANDING ISSUE

PAPDEMOS SAYS AIMS TO CONCLUDE LOAN TALKS AHEAD OF THURSDAY'S EUROGROUP MEETING

And on the off chance that Greece, gasp, does not actually get something done by the deadline, it means that at tomorrow's meeting the only topic of discussion will be the calorie content in the taxpayer funded pastries. In the meantime, some semblance of reality is creeping back into the EURUSD.

Morning Thoughts ! Wednesday Morning As We Wait For Godot !

noreply@blogger.com (fredw) — Wed, 08 Feb 2012 14:03:00 +0000

Bank Run Shown In One Graph ! Morning thoughts.....

European Bank Run Full Frontal

Submitted by Tyler Durden on 02/08/2012 08:23 -0500

This chart from Credit Suisse cuts through all the propaganda BS like a hot knife through butter.

Good morning ! This is certainly an eye-opening chart of the day ! You can see where deposits peak - around mid 2007 ( recall that was when Europe had its credit freeze up and Libor went totally batty shitte . Moving forward the declines in deposits continued from 2006 through 2010 - and then note the divergence between Europe broadly and Germany - France that began in 2011 ! What should be disturbing is the downward trend seen in Germany - France that began during the latter stages of 2011 ( as it became clear was not AAA and Germany was going to be off-loaded with more eurozone risk and obligations ( or else the whole grand euro experiment would just go bust ). As Greece suffers through a soft restructuring or a hard default , expect the trend to continue - w still have to follow the bouncing ball to see what Portugal , spain , Ireland and Italy do with their mountains of debt . Expect these countries to request a restructure as Greece as obtained or will obtain. What this chart represents is trust - or the lack thereof . No trust in the banks , no trust in the EU , no trust in the ECB , no trust that there are solutions. ECB printing does not and cannot trump runs on the banks . Banks can't lend on a fractional reserve basis when money is pulled - if approximately 350 billion has left the eurozone banks collectively since mid 2006 , then on a fractional reserve basis 3.5 trillion in lending power has evaporated ! And as european banks face demands to recapitalize and raise their reserves , further pressure on the banks will occur - putting more scrutiny and lack of trust in these banks. which means more money pulled out. The circular pattern facing the banks is similar to the circular problem facing Greece ( falling revenues beget austerity , causing revenues to further fall - resulting in further austerity which causes further revenue declines ... was , rinse , repeat . )

Expect a deal on Greece - probably later today. If this does come to pass , we should see the details of the second ( but not last ) Greece rescue plan floated out over the next couple of days , the details of the PSI float out a well. the pols will postsure , bicker , duck for cover - eventually this will go to Parliament and they either will vote yea or nay. Similarly , at some point a " deal " on the private debt swap will be put forth - the banks and other private investors will say yea or nay , the ECB will do what it chooses to do ( won't take any losses though - bet on that . ) and then the focus will shift to the other PIIGS and the near PIIGS ( Belgium , Austria , France ) The chart above reflecting the ongoing run on europe's banks ensures this is the course that will be run . and the reason is - lack of trust ! Be well , have a great day !

Evening Post ! What happens When The Car Stops Running On Fumes ?

noreply@blogger.com (fredw) — Wed, 08 Feb 2012 01:21:00 +0000

While hardly surprising to anyone who actually paid attention over the past two months to events in Greece (instead of just reacting to headlines) where among those on strike were the very tax collectors tasked with "fixing the problem", we now get a first glimpse of the sheer collapse in the Greek economy, which also confirms why Germany is now dying for Greece to pull its own Eurozone plug (predicated by a naive belief that Greece is firewalled as was discussed before . As a reminder Hank Paulson thought that Lehman, too, was firewalled on September 15, 2008). And what a collapse it is: according to just released data from Kathimerini, budget revenues lagged projections by €1 billion in the very first month of the year. "Revenues posted a 7 percent decline compared with January 2011, while the target that had been set in the budget provided for an 8.9 percent annual increase.Worse still, value-added tax receipts posted an 18.7 percent decrease last month from January 2011 as the economy continues to tread the path of recession: VAT receipts only amounted to 1.85 billion euros in January compared to 2.29 billion in the same month last year." This it the point where any referee would throw in the towel. But no: for Europe's bankers there apparently are still some leftover organs in the corpse worth harvesting. Unfortunately, at this point we fail to see how this setup ends with anything but civil war, as the April elections will merely once again reinstate the existing bloodsucking regime. We hope we are wrong. ( Source ZH )

When the car stops running on fumes , the car stops ! end of the story and sadly , that's what're seeing happen in Greece . but how could this be a shocker ? On an annual basis , revenues are on a pace to shrink by 12 billion euros - and keep in mind , this is before the further austerity measures which could include 15,000 jobs lost from the public sector , a cut of perhaps 20 percent to the minimum wage , basic and supplemental pension cuts and changes to the collective bargaining agreement ! Those further austerity measures will naturally provide additional downward pressure and of course more Troika demands for austerity - note that cuts to the minimum wage will by themselves lead to a 1.3 billion drop in tax revenues and a 2.4 drop in social security contributions ! . This will be a the cycle of misery until Greece finally explodes into mass protests and riots or Greece just says the heck with this and defaults . The one year greek bond purported yield of 528 percent is a flashing red light that a hard default is coming. So is the debt to GDP ratio hitting 159 percent - that ratio keeps heading the wrong way. Critical meeting supposedly set to finally resolve the PSI and Second Rescue deals over the weekend , have slipped from Saturday until now we see Wednesday is the latest date for PM L-Papa and his own Troika ( Pasok , New Democracy and Laos ) , to supposedly wrap up the Rescue talks. Meanwhile the March 20th 14.5 billion euro debt cliff approached. Even if or when these two sets of talks are concluded , will the MPs fro Greece approve the further harsh austerity ? Will the second rescue deal be 130 billion euros , 145 billion euros or some higher number yet presently unarticulated number ( 160 billion + euros if one takes the slipping revenue numbers in account ) ? Will the private investors accept a 70 percent ( or will if be 80 + percent ) haircut and if not , does Greece pass a Collective Action Clause to ram the deal down private investors throats ? Meanwhile , Ireland , Portugal , Spain and Italy watch and wait - how long before they line up to see 70 - 80 percent of their debt cut too ? Does the ECB foist onto the EFSF 25 billion in losses and how will the Japanese and Chinese buyers ( let alone any GCC buyers of this sucker debt ) react ? Will Wednesday's meeting slip to thursday - Is Bill Murray really living out day after day in Athens , learning out to play classical music and jazz on the piano ?

Meanwhile Spain joins Greece in protesting loudly against austerity and did you note the PM in Romania just stepped down as a result of huge protests against austerity there ? Taking note Greece and Spain ? To those fighting the good fight in Greece - hang in there , fight the powers that would crush you under their heels , throw out the bums who agree to these death dealing poverty measures and don't ever forget what has been done to your country ! To Ireland , Portugal , Spain and Italy - get off your arses and hit the streets - you should be able to figure out your next in line ! In France , the UK and US , don't get smug - what is happening in Europe is a prediction of the future played out in real time - wake up before it's too late ! Okay , got my rant off the chest - hope everyone had a great day , cue the Sonny and Cher song again .....

Daily Open Thread 2/7

noreply@blogger.com (Nathan A. Martin) — Tue, 07 Feb 2012 15:18:00 +0000

Good Morning,

Stocks are lower in early action, but the dollar and bonds are both down. None of it is real.

Please continue with the Open Thread today as I have business to attend all day today, thank you.

Monday Open thread !

noreply@blogger.com (fredw) — Mon, 06 Feb 2012 13:29:00 +0000

Items of interest culled from ZH - WSJ and NYT Times ...... Greece is still living Ground Hog Day - the Series ! Monday deadline to respond to the Troika demands , which may or may not have been a deadline ( depending upon whether you listen to Greece or the European Commission ) has come and gone. Further updates both sides say will come later today - yeah , book that Dano ! Progress was made or perhaps not made during weekend talks , the PSI talks may or may not be largely completed , Greek pols may or may not want PM L-Pap to stay in office and take the heat until the end of 2013 .... one thing we do know , the massive strikes will continue on Tuesday ! As Greece fires burn , stocks are modestly off as traders hold their fire , trying to figure out what may come to pass in Greece , Europe in general , what the weekend events mean for Syria and Iran - when does the next big bang occur ? As this was the Super Bowl weekend , how much attention did the average Joe and Jane pay to what happened or didn't happen this weekend anyway ? Who knows on that front - well that game is over but the other games are ongoing ! Have a great morning - and of course , what's on your mind today ?

Overnight Press Digest

WSJ

* Auto maker General Motors Co is expected to report net income of more than $8 billion for last year and has set a goal of making more than $10 billion a year.

* A financial turnaround at Las Vegas Sands Corp is beginning to pay off for chairman and CEO Sheldon Adelson, who during the financial crisis put $1 billion of his own money into the struggling casino operator.

* U.S. corporate profits are showing signs of flagging, even as share prices reach multiyear highs. Margins are slipping as already-lean firms find it harder to continue cutting costs.

* Greece's political party leaders will resume talks Monday after major differences on draconian reforms as part of an international aid package remained unresolved following a marathon meeting Sunday.

* Federal and state officials aim to wrap up this week a multibillion-dollar agreement with five major banks to settle probes of alleged foreclosure abuses.

* The White House plans to nominate former Bush administration official Jeremiah Norton to the Federal Deposit Insurance Corp, a key banking regulator.

* Farmers and analysts are expressing fresh skepticism about Agriculture Department data on the corn market in the wake of the latest figures, which stunned traders and sent prices on another wild ride.

* The Federal Reserve is presenting a broad swath of conservative investors, from retirees and college savers to banks and insurance companies, with a tough choice: move into riskier investments or continue coming up short from low-risk investments that aren't even keeping pace with inflation.

* State-run entities that expanded over the past decade to provide affordable homeowners insurance in hurricane-threatened Florida are in danger of becoming so big they threaten to wreak havoc on the local economy. Citizens Property Insurance Corp, already the state's largest home insurer, now has 1.5 million policyholders and a total exposure of $511 billion, about one-quarter of the market.

* After a spate of rocky debuts in the U.S., this week's slate of initial public offerings are going to be facing a tougher pricing environment. Of the eight IPOs that were expected to trade last week, three were postponed -- two for market reasons and one because the company is being acquired --and three ended their first days of trading down.

* PepsiCo Inc and Coca-Cola Co likely will show solid profit growth when they share their 2011 results this week, but this year could be tougher. Investors want more evidence U.S. consumers will swallow pricier soda and chips.

* Global private equity fund TPG Capital LP said Monday it has secured about 4 billion yuan ($634 million) so far as it continues to raise capital for China investments.

NYT

* Pushed against the wall by its foreign lenders, the Greek government agreed on Sunday to drastic new spending cuts but failed to complete an arrangement that would unlock the financing the country needs to prevent default. It agreed instead to resume talks on Monday.

* With a deadline looming on Monday for state officials to sign onto a landmark multibillion-dollar settlement to address foreclosure abuses, the Obama administration is close to winning support from a crucial state that would significantly expand the breadth of the deal.

* Sun Media Group is joining Harvest Fund Management to create Harvest Seven Stars Media Private Equity, which will back entertainment ventures in China and abroad.

* Estimates are that NBC has spent as much as $25 million in promoting its "Smash," a new series that the network hopes will be the hit it desperately needs. The promotion campaign includes things like billboards, print ads, taxicab spots and the lavish, laminated, 40-page Broadway-style program book that NBC sent to the press.

* Although more than half of its 845 million members log into Facebook on a mobile device, the company has not yet found a way to make real money from that use.

* The president of Memorial Sloan-Kettering Cancer Center in New York is in a billion-dollar dispute with his former workplace, a cancer institute at the University of Pennsylvania, over accusations that he walked away with groundbreaking research and used it to help start a valuable biotechnology company.

* The Human Rights Campaign, a national organization that promotes equal rights for gay, lesbian, bisexual and transgender people, has recruited Lloyd Blankfein, CEO of Goldman Sachs , to be its first national corporate spokesman for same-sex marriage; an issue that will come up for a legislative vote in several states this year, including Washington and Maryland.

Weekend Open Thread - Words of Wisdom From Doug Noland !

noreply@blogger.com (fredw) — Sat, 04 Feb 2012 13:03:00 +0000

Here is the pertinent points from Doug Noland's weekly commentary from the Prudent Beat site !

http://fredw-catharsisours.blogspot.com/2012/02/price-instability-by-doug-noland.html

Chairman Bernanke was forthcoming yesterday when he stated that loose monetary policy distorts the economy and leads to inflationary pressures. I’ll contend that the world would today be a safer place if “easy money” in fact always led to inflationary pressures. In reality, some of history’s most notorious Bubbles developed in an atypical environment comprising loose monetary policy and well-anchored consumer price inflation. One can look to the seemingly sanguine pricing backdrops in the U.S. during the “Roaring Twenties” and Japan in the eighties as cases in point. In both circumstances, a misdiagnosis of the Credit and financial backdrop was instrumental in policymakers remaining too loose for too long - and unwittingly accommodating precarious Bubble dynamics.

The U.S. economic recovery has achieved some momentum, risk markets are quite strong, the liquidity backdrop is amazingly robust, the banking system stable – and the Fed has nonetheless committed to sticking with near-zero rates for at least several more years. To be sure, market participants are anything but oblivious to the fact that they enjoy both ultra-loose liquidity conditions and a Federal Reserve eager to implement additional quantitative easing in the event of renewed economic weakness or market stress. It makes the old “Greenspan put” rather child’s playish.

In such a speculative marketplace, bubbling risk markets provide a powerful incentive that forces believers and non-believers alike to hop aboard. Increasingly, it’s a marketplace where everyone is being forced to become a trader with a short-term performance and trend-following focus. Attention to risk is proving too excruciating. For this phase of a historic Bubble cycle, it has been more a case of the Federal Reserve inciting rather than just accommodating Bubble Dynamics.

The Fed and global policymakers have fashioned a decidedly unlevel playing field. A distorted market incentive structure has fomented yet another bout of self-reinforcing risk-taking and speculation. Not all that many weeks ago, the global financial system was being rocked by de-risking and de-leveraging dynamics. Leveraged long positions were being reversed, which – in global markets dominated by leveraged speculation – was quickly leading to serious market liquidity issues. At the same time, markets were inundated with derivative-related selling, as players across the globe implemented strategies to hedge against various risk scenarios. With increasingly illiquid markets unable to withstand such selling pressure, global policymakers responded with resolve.

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It is understandable to be confused by such strong market performance in the face of major global structural issues and attendant risks. I would argue that markets have turned highly speculative specifically because of the deep structural issues confronting global policymakers. Last year the efficacy of policy measures notably dissipated (in Europe and here with QE2), provoking only more aggressive policy interventions. The markets are now responding to the unprecedented liquidity backdrop – and the reality that global policymakers have become hostage to the markets. Risk concerns have evaporated, and ebullient traders are referring to “the sweet spot.”

Not for a minute have I ever believed that the proliferation of derivative trading would end well. When a meaningful part of the marketplace moves to implement hedging strategies (as was the case again last year), the market will immediately find itself both prone to illiquidity and vulnerable to trend-following selling pressure. And, as we’ve seen, when policymakers then aggressively intervene to stem deepening market stress, markets abruptly become susceptible to a destabilizing reversal of hedging-related exposures. The unwind of both hedges and bearish short positions creates a powerful burst of (panic) buying power and marketplace liquidity. In short order, dangerously illiquid markets can be transformed into abundantly – I would argue, overly – liquid. And there is nothing like the specter of a buying panic associated with a major short squeeze to really empower the markets’ animal spirits. Nervousness and risk aversion are so second-half 2011.

The NYSE Financial Index is already up 13.6% year-to-date. Bank of America has gained 41%, Citigroup 27%, and JPMorgan 15%. Morgan Stanley and Goldman Sachs have jumped 34% and 30%, respectively. The S&P500 Homebuilding index has a 2012 gain of 20.9%. The Morgan Stanley Cyclical index is up 16.0%. The small cap Russell 2000 has gained 12.2% and the S&P400 MidCap Index has jumped 10.5%. The Morgan Stanley High Tech index is already up 14.0%, and the Nasdaq100 closed today at the highest level since early-2001.

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I’ve been at this for awhile, so you won’t hear me calling for the imminent demise of this Bubble. I will, however, continue to warn that when this one blows there will be hell to pay. And what a fascinating juncture for the marketplace to so emphatically embrace risk-taking. Especially with readily available derivative risk protection, it is indeed rational for players to aggressively play the (policy-induced) global risk market rally – with one eye on buying cheap risk insurance. And I will assume the sophisticated global speculators will play this for all its worth (multi-billions, literally) – with an eye on the exits in the event Europe begins to unravel. Policymaker efforts to avoid a system blowup have created a backdrop conducive to a destabilizing speculative blow-off. And the Fed can still somehow trumpet “stable prices.”

Ground Hog Day Continues !

noreply@blogger.com (fredw) — Fri, 03 Feb 2012 12:37:00 +0000

Now my alarm clock didn't blare Sonny and Cher singing " I got you babe " this morn , but i swear it's still Ground hog Day again ! First things first - didn't we go through the whole Greek Second Rescue Deal is just days away yesterday ? I mean the deal was going to be reached by Friday - yet now we see it's still in the just days away mode as we learn further details on the talks. for example , the Troika has told the finance and Labor Ministers that the country's labor system must be cut to the bone - to the tune of salaries and pensions being cut 25 percent ! Yup , those were the glad tidings the Troika dropped on temporary PM L-Pap , who then was given the joyful task of relaying that to the political party chiefs ! How might that be received by New Democracy , Pasok and Laos ? Well , i can't say for sure - but what I do know is that the critical meeting between L- Pap and the party chief ( which has slipped from Wednesday to Thursday , from Thursday to Friday , then from Friday to Saturday ! If you think that is a good sign of how the good news L-Pap has to share will be received by the major greek parties - i have a bridge for sale just for you ! Meanwhile the PSI talks are in suspended animation , no one has a clue what the official creditors such as the ECB will do ( if anything to ease Greece's pain ) and NOW the talk is that the ECB and IMF may have to give Greece a bridge loan to cover the March 20th bond payments of 14.5 billion euros. while today is Febuary 3rd , Greece is still living Ground hog Day all over again !

The tragic events in Egypt where at least 74 people were killed , many crushed to death in the panic surrounding a riot after a soccer match , underlines that Egypt has been in ground hog Day mode almost a year after their revolution began ! Police have been accused by one group of fans at the match of allowing rivals to attack them - allegedly due to the belief that the victims had supported the protests over the past year, first against former President Mubarak , now against the Military government ! The more things change , the more they stay the same ? Or is it the more things stay the same , the reality is that no change has occurred at all ? Or perhaps let's just say Egypt is living Ground Hog Day - for about a year and counting ! Cosmetic changes have been made ( Port Said's Security chiefs and Governor have bee suspended ) , but the deeply unpopular interior Minister remains in place - this won't appease those protesters , thus the fuzzy mammal has been brought out in full view. 6 more weeks of winter , death and bloodshed lie in wait for Egypt . Syria is living a Ground Hog Day existence - the Arab League and European resolution for Assad to step down lies in limbo. Homs remain under daily attack - a virtual war zone continues day after day. Life in Homs is beyond desperate - families hunker down , scramble out ( risking life and limb to find food ) , wondering if supply routes will be cutoff and all food and water removed from their grasp. Meanwhile , back at the UN , China and Russia black the resolution pushed by the Arab League. Naturally Russia wants to cut off any foreign military adventures from jumping of - as per Libya.

Iran is definitely living La Vida Ground Hog Day - ongoing threats of an attack of their nuclear facilities , which go back to the era of Bush - Cheyney continue. Most recently , Defense Secretary Panetta opined that an Israel attack could happen in April , May or June - again these ongoing threats have occurred off and on since 2007. Of course back in 2007 , there wan't an oil embargo in place nor were there sanctions directed against Iran's Central Bank - while time will tell how seriously those sanctions will be ( with signs of rebellion from India , Turkey , China and Russia to carrying the water for the West. Heck , even Iraq plans to seek a waiver from the US promulgated Iran sanctions ) , the fact that they will impact iran's economy to some degree is concerning sign of escalating tension in the Persian Gulf. A false step by any party in play here , a mistake in judgment , a false flag attack - just a spark is needed to se the region on fire. War in the Middle East , civilians killed by marching Armies - very much in tune with living La vida Ground hog Day. So as we head into the morning and US Non Farm Payroll data ( more questionable data to give CNBC something to cheerlead over ) , keep in mind things are in the same mode , but the promise of better days is just " days away " Cheers !

Ground Hog Day !

noreply@blogger.com (fredw) — Thu, 02 Feb 2012 13:08:00 +0000

Hey , where ole fuzzy Phil ? As best I can tell , today is a replay of yesterday - Olii Rehn is out declaring that the Greek debt swap should be concluded in " coming days " . Deutsche Bank chief Josef Ackermann is stating Greek aid is now less dependent on banks but on " others " ( translation - hedge funds ) but we already knew that ! Ackermann further added the "present " haircut on Greece is 70 percent or more - and that if the country fell then Portugal could be next..... again , nothing new here , been there , discussed that , same jibber jabber we've heard repeatedly. Speaking of jibber jabber , Jean - Claude Juncker ( head of the EuroGroup ) now believes the measures from the January 30th Summit are largely insufficient and the Greek PSI ( debt swap ) talks are ultra difficult - what can one say to that other than " No Shitte Sherlock ?But that statement from Juncker explains of course why EU officials have scheduled a meeting of the EuroGroup for Monday to - discuss the second bailout program for Greece . More largely insufficient measures on the way I'm sure....

Actually I'm surprised that equities in Europe aren't flying today. Merkel is stumping up money in china today - and Chinese Premier is making the right type of noises ( we've heard these noises before of course ) that it is important to resolve the eurozone debt crsis. and that his country is considering greater involvement in the EFSF and ESM ( what - DAX , CAC and FTSE aren't up a hundred points on those comments ? ) Of course Wen then added " Europe must rely on itself , reduce its debt load and introduce structural reform. " Hmm , purse strings still drawn shut as far as I can tell !

Greece' herd of kitties masquerading as a Government say they have completed the bulk of the talks with the Troika - just a few items left unresolved , just 3 or 4 sticking points left say government spokesman Kapsis - of course the problem is the " 3 or 4 sticking points " are the minimum wage , supplemental pensions and recapitalization of the Greek Banks ! those are kinda big problems that remain unresolved - and this is far along the road to see they're still unresloved. just another example of Ground Hog Day playing out. And of course , until the Greek Rescue talks are completed for 130 billion euros ( or is it 145 billion euros ) , we don't actually get the details on the alleged deal on the PSI ( is the haircut 70 , 72 or 79 percent and who is going to go along with the deal anyway ? )

Nigel Farage offers timely commentary - which of course the EU trolls don't want uttered publicly !

Happy Ground Hog Day !

Diplomacy at gunpoint

British Eurosceptic MEP Nigel Farage stormed out of a European Parliament session on Wednesday night after his speech was interrupted by the German chairman.

The rightwing UK Independence Party (UKIP) leader was cut off when he compared the leaked German plan for Greece’s finances to be managed by Brussels to being like the Second World War Nazi occupation of the country.

Farage said the plan would see “a European commissioner and his staff occupy a big building in Athens and take over the running of the country”.

This commissioner would be nothing more than a "Gauleiter", he added, referring to the regional Nazi party leaders of the Third Reich.

The comparison sparked outrage among German MEPs. A German Green Party lawmaker, Reinhard Buetikofer, accused Farage of spreading “hatred between European peoples”.

“Greece is not a failing subsidiary company where head office needs to come in and take control," Farage also said. "Greece is a nation with a soul, a nation with pride, with history."

He then turned his attentions to the Belgian head of the European Council, Herman Van Rompuy, accusing him of being responsible for the “misery in these countries”, referring to the so-called PIIGS countries, Portugal, Ireland, Italy Greece and Spain.

Wednesday Wake Up Call !

noreply@blogger.com (fredw) — Wed, 01 Feb 2012 13:32:00 +0000

Good morning ! Today is Wednesday and much of the new of the day reflects similar topics from tuesday. A greek private debt swap is still just days away , the second rescue is just days away - of course Friday is just away as well ! whether stocks flit up or sink down , the trend is that the greater issues of the day remain unresolved - day after day. A new normal ? A bad dream ? Or just the new human condition of imposed dread , fear mongered hysteria and general doldrums.

Considering Greece received a bailout in 2010 ( which was resolve everything but of course did not ) and has been attempting to receive its second dollop of rescue funds ( 130 billion or 145 billion euros worth of dollop ) , what has changed for the greek people ? Based on the data from yesterday , the greek people have a million reasons to be irate - that was the most recent number of unemployed greeks as per October data ! A 19.2 percent jobless rate , with more harsh austerity just around the corner. Considering the efforts and track record of the Troika to date to " save " Greece , thank God the idea of a Budget Commissioner has failed ( for now ) , as one could expect Greece to swiftly overtake Spain's jobless rate of 23 or 24 percent ( depending on which day of the week you listen to the Spanish Finance Minister .

After weekends of frenzied talks , the debt swap is supposed done , it just needs to be announced - so they say. A " voluntary " 70 ( or is it 80 percent ) haircut , which somehow is not a credit event is in the bag , as long as the greek political parties play ball with the Troika. Greece's Prime minister Lucas Papademos , setting up his second planned ( or is it an emergency ) meeting on Wednesday or Thursday with the three major parties , two of which are resistant to another round of the endless austerity. The battle line for now seems to be the Troika demand that the minimum wage be cut ( sweeteners to make this bitter medicine go down are Troika hints it will drop opposition to their present attacks on the summer and holiday bonus pay .) At present , New Democracy and Laos are strongly opposed to any reduction to the minimum wage - as are the Unions and even Employer Groups. Let's see how long the resistant stands - after all , once these rescue and debt swap talks are wrapped up , the parties can focus on the April elections - New Democracy if it wins may just dump various austerity measures anyway - the political calculus may be agree for now , get the Troika out of the hair for now , win the election - and then do what you plan to do anyway.

The troubles in Greece are just a precursor for what will come the way of Portugal ( next in line probably ) , Spain ( 23 or 24 percent unemployment and a massive real estate mess ) and Italy ( 120 percent debt to GDP and a so called plan to reduce debt 3 percent a a year to achieve 100 percent debt to GDP by 2020. Meanwhile , their debt issuance is third in the world , trailing only the US and Japan - borrow to reduce debt , sounds like a plan. ) Greece is a test run , as will be Portugal. Spain and Italy will be a greater experiment - might that be when we see fiscal union rammed down the throats of Europe ? And following in the same path , we can see France lurching toward a bailout of some form or fashion - 2013 perhaps ?

Overnite manufacturing data for January improved in China ( 50.5 as compared prediction of some shrinkage ) , the UK ( 52.1 as compared with expectations of 50 ) and Germany ( 51 as compared with 48.5 in December .) However , Greece manufacturing data was dreadful - 41 ( down from 42 in December ) , France dropped to 48.5 from 48.9 indicating contraction , Italy still showing a contraction level of 46.8 ( although up from 44 in December ) and spain shows a lousy 45.1 ( but better than 43.7 in December .) Switzerland and the Czech Republic also showed shrinkage For now the winners and losers in europe are clear - chinese data , believe what you choose to believe with their data ( kind of like US data. )

US dat today is the ADP report out shortly , ISM data ( should be interesting after Tuesday's mis on manufacturing and Auto sales data. US futures are higher , Europe Bourses are higher , commodities are higher. ADP just out , 170, 000 private jobs for January supposedly created - we shall see what NFP fiction we see Friday ( but watch out for the annual revisions - do we lose another 300,000 jobs allegedly created last year ? Very hard to believe small and medium businesses are leading the job creation brigade , not these days. As a contrary report to note , Trim Tabs predicts just 45,000 new jobs for Friday - we shall see how the prediction match up with the official data. As we head further into the political season , take all of the government data with a larger pinch of salt - a wide discrepancy between data and reality exists . That is likely to follow trend.

So , there we are , another day , another morning ramp. Tread lightly , it is very treacherous time to invest / speculate / trade as the markets are broken and understand who is the sucker at the proverbial poker table !