Live From New York: ECB’s Trichet & Bob Rubin I almost missed this speaking engagement that the ECB’s chief had at the Council for Foreign Relations in New York. Welcoming him is none other than the rather famous Goldman Sachs alum and former Treasury Secretary Robert Rubin. Needless to say, it’s important stuff touching on the goings-on in the European Monetary Union (EMU). If the length deters you, there’s a highlight clip on the CFR website.

BBC News – Germans baulk at ‘bottomless pits’ of bail-outs…There are so many zeros on the front page of the tabloid Bild, you almost need a calculator to understand the story. The headline declares: "25,000,000,000 Euros!" and "Now the Greeks want even more of our money!" Twenty-five billion euros is rumoured to be the cost to Germany of participating in a three-year bail-out of Greece. "Is Greece now a bottomless pit for taxpayers’ money?" the paper continues. It is not just the tabloids that are fuming. So is the German public. Nearly every day, opinion polls in newspapers and on TV show that most Germans oppose the idea of their country bailing out Greece. European solidarity has gone out of the window. Germans find it hard to understand why they have to pour billions of German euros into Greece, when it is Greek profligacy that is to blame for the mess in the first place.

 Digging Deep and Seeing Greece’s Flaws – NYTimes – He sees far too much mismanagement and corruption. Greece’s shadow economy is the largest in the European Union. Bribing government officials is routine. And tax evasion is a national sport. “We did this to ourselves,” said Mr. Koptides, 37. “It is our problem. It’s not Germany or Europe’s fault. We did this to ourselves.” Greeks seem to be engaged in national soul-searching these days, wondering whether traits they once found amusing might have led to many of their difficulties now. Some say their country may have been unprepared to join the European Union in the first place. Some focus on how European Union funds sent to Greece were spent on wasteful projects. Greece’s last administration hid the extent of its debt.

So, What Happens if Greece Can’t Pay Up? Here are three disaster scenarios I found from Reuters if Europeans cannot figure out how to stave off Greek capitulation. These are arranged in terms of increasing anarchy and improbability: Analysts and traders have outlined a range of options for Greece, or any other euro zone country that might face a similar position, if it is unable to make payments on its bonds. NEGOTIATED DEBT RESTRUCTURING – PROBABILITY: most likely in the medium to long term; UNILATERAL DEBT RESTRUCTURING PROBABILITY: highly unlikely; OUTRIGHT DEFAULT – PROBABILITY: highly unlikely

Greece Fire = Sub-Prime, Circa 2007: Neither Are "Contained" – As we learned that government-sponsored mortgage giants Fannie Mae and Freddie Mac “might” need some assistance, maybe, kind of, sort of, and not two months later they were placed into government receivership, setting up the mother of all financial blazes as sub-prime fire left one institution after another reduced to smoldering ashes and the resulting sparks openly spread to otherwise sound (at least, so it was thought) financial entities, igniting even those who assumed they were “well-hedged.” At this point, only 18+ months ago with fire alarms ringing everywhere, U.S. first-responders Bernanke and Paulson and their European counterparts dashed into the breach with extra-wide, heavy duty fire hoses, pumping trillions of created (Fed) and borrowed (Treasury) dollars onto the burning system, and the oft-repeated story of their heroics almost has become tiresome as we rebound economically along the right side of that V-shaped recovery. But the fire is not yet quenched, and Greece (think, “sub-prime”) was one of a number still-smoldering ember hidden in the soaked wreckage of the global financial system which so rapidly has been rebuilt. Another “hot-spot”
 Europe Faces New Banking Crisis on Greek Debt Concern (Bloomberg) — Europe’s banking industry is threatened with a replay of the credit squeeze that sent the region into its worst recession since World War II, UBS AG said.  Banks are unwilling to lend to counterparts they suspect of having loans in Europe’s most indebted nations after Standard & Poor’s this week cut Greece’s credit rating to junk and lowered the grade on Portugal and Spain, according to Brian Kim, a currency strategist at UBS in Stamford, Connecticut. The banks’ reticence matches their caution on lending to rivals that held collateralized debt obligations two years ago, he said. “Recall how in March and September 2008 interbank lending began to show signs of stress as counterparty risk jumped, with banks unwilling to lend to their peers for fear that counterparties were excessively burdened with illiquid assets such as CDOs,” Kim wrote in a report yesterday. “Replace ‘CDO’ with Greek or Portuguese bonds, and this is the risk that now looms.”

The Euro: Why Should We Care? : NPR – (Rogoff interview 4.5 minutes) One day after the debt ratings for Greece and Portugal were downgraded, Standard & Poor’s on Wednesday has cut the credit rating for Spain. The move sparked a sell-off of stocks in markets all over the world, pulled the euro to its lowest point in a year, and diminished hopes in Europe that the debt crisis could be contained. Michele Norris talks to Ken Rogoff, a Harvard economics professor and former chief economist of the International Monetary Fund, to find out how this could affect the financial picture in the U.S.

Joseph Romm: Senior U.S. military leaders announce support for climate bill – The Pentagon affirmed earlier this year that “Climate change, energy security, and economic stability are inextricably linked.” Today an unprecedented 33 retired US military generals and admirals announced that they support comprehensive climate and energy legislation in a letter to Senators Reid and McConnell as well as a full page ad (click to enlarge).  The news release points out: It was the largest such announcement of support ever, reflecting the consensus of the national security community that climate change and oil dependence pose a threat American security. Here is the full text of the letters signed by these generals and admirals:
Jeff Masters: Unfavorable winds set to push Gulf of Mexico oil spill into Louisiana – Oil continues to gush from the well head at 5,000 feet depth at a rate five times what was previously estimated — 210,000 gallons per day. This is equivalent to about 2% of the total spilled oil from the 1989 Exxon Valdez disaster in Alaska entering the Gulf of Mexico each day. If 210,000 gallons per day has been leaking since the disaster began on April 20, over 2 million gallons of oil has already been spewed into the Gulf, about 18% of the 11,000,000 gallons spilled in America’s previous worst oil spill, the Exxon Valdez disaster. With the winds expected to begin blowing the oil spill on shore this weekend, the Deepwater Horizon oil spill appears destined to become one of the most disastrous oil spills in U.S. history
 New oil leak in well of sunken drilling rig…— Five times more oil a day than previously believed is spewing into the Gulf of Mexico from a blown-out well of a sunken drilling rig, the Coast Guard said Wednesday, an estimate the oil company trying to contain the massive spill disputes. A new leak was discovered in the pipes a mile below the ocean’s surface. Coast Guard Rear Adm. Mary Landry said National Oceanic Atmospheric Administration experts now estimate that 5,000 barrels a day of oil are spilling into the gulf. Officials had estimated the leak for days at 1,000 barrels a day. The news came hours after crews tried a test burn on the massive spill to try to slow it from reaching the U.S. shoreline.

Can $25.3 Million Buy the Senate Banking Committee? – They’ve been taking large amounts of money from financial services companies for years. And for many observers that raises a simple question: Can lawmakers who are so beholding to a megabillion industry really be expected to objectively carry out a mandate to dramatically change it? Overall, members of the 23-seat committee chaired by Sen. Chris Dodd, D-Conn., have received at least $25.3 million in campaign contributions during 2005-2010 from a variety of financial services interests. That’s according to calculations by the Center for Responsive Politics, a nonpartisan campaign research organization. That includes more than $9 million from Securities and Investment firms, $6.6 million from real estate, more than $4 million from insurance companies, $2.6 million from commercial banks, more than $1 million from finance and credit companies, more than $1 million from accountants, $231,814 from credit unions and $161,600 from savings and loans. The figures include both contributions from political action committees and individuals employed by those industries.

. Gary Shilling: Americas Lost Decade – The US faces 10 years of slow growth and deflation that could rival Japan’s “lost decade” – two words which Gary Shilling did not utter but which unmistakably characterize his forecast.Shilling laid out his deflationary forecast along with his investment recommendations at last week’s Strategic Investment Conference, held in San Diego and hosted by Altergis Investments and Millennium Wave Investments.  Shilling is founder and President of the New Jersey-based economic consulting firm A. Gary Shilling & Co.  His talk was titled “Investment Strategy for an Era of Slow Growth and Deflation.”Our GDP will grow by a mere 2% annually over the next decade, Shilling said, and further growth will be impossible while we “socialize our debt” – transferring financial sector and household liabilities to the federal balance sheet.  “This deleveraging, in my estimation, is going to take at least a decade, and that’s the good news,” he said.  “If it were to happen in a couple of years, it would make the Great Depression look mild.” 

ANDRILL ice cores show far more dynamic melt history for Antarctica than previously thought – The southern McMurdo Sound core yielded clear evidence of some 74 cycles of ice sheet buildup and retreat during a 6-million-year stretch starting in the Miocene Epoch some 20 million years ago. The unexpected ice-sheet dynamism has ANDRILL climate modelers considering what input or software adjustments would make the simulation produce the kind of dynamism seen in the geological record. Their model currently indicates that even if the imperiled West Antarctic Ice Sheet succumbs to current warming trends, the much larger East sheet should stubbornly resist melting. According to the simulation, the East ice sheet melts only when atmospheric carbon dioxide levels are at least eight times higher than preindustrial levels. The ice sheet’s so-called hysteresis, or resistance to change, is now in doubt.

Bring on the male pole dancers? – There are athletic spheres thought to be the domain of men: say, virtually every conceivable team or individual sport; and those thought to be the domain of women: your Jazzercize classes, Curves gyms, rhythmic gymnastics. Of those, the relatively new phenomenon of pole-dancing-as-workout falls decidedly into the category for ladies. But the Washington Post takes the time to ask: Why is this so? After all, men are bigger and stronger, so they’ll naturally be better at it! When men do it, write the Post’s fitness columnists, pole dancing can become “an athletic and artistic pursuit that feels more Cirque du Soleil than strip club.”

California’s legislative leaders ask feds for billions owed – California Speaker of the Assembly John Perez (D-LA) says he’ll make the case to California’s congressional delegates and the Obama administration that the feds owe California some money.  "I want to be clear that we’re not going to Washington D.C. to ask for a bailout of California." Perez said.  Perez and Senate leader Darrell Steinberg (D-Sacramento) will ask the feds for $700 million that the state spent on medical care for people mistakenly denied coverage under the fed’s Medicaid program.  They also want the feds to chip in more to offset the $800 million that California spends each year to incarcerate undocumented felons. Steinberg says California needs some help with its $18 billion deficit.
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