Monthly Archives: October 2011
World Markets Celebrate a Marriage Between France and Germany
FLASH: French finance minister says French state’s guarantees to Dexia has no impact on debt
Nothing to see here.
Comments »FLASH: S&P Futures Soar on Dexia Nationalization
Futures are up anywhere between 1.2-1.4% on the news that Dexia will be bailed out by the Belgium government.
ROFL
Comments »Herman Cain Throws Hot Slices of Godfather’s Pizza at Occupy Wall Street Protestors
Republican presidential contender Herman Cain amplified his criticism Sunday of the growing Occupy Wall Streetmovement, calling the protesters “jealous’ Americans who “play the victim card” and want to “take somebody else’s” Cadillac.
Cain’s remarks, on CBS’ “Face the Nation,” came amidst an escalating war of words between Republicans and Democratsover the merits of the movement, which has spread from New York to other cities across the nation, including Washington and Los Angeles.
GOP politicians in recent days have stepped up their criticism of the protesters, with House Majority Leader Eric Cantor (R-Va.) calling them “mobs” who have pitted “Americans against Americans.”
But Cain, surging in popularity among many conservatives, seems to have had among the most virulent responses to the protests.
On CBS, Cain suggested that the rallies had been organized by labor unions to serve as a “distraction so that many people won’t focus on the failed policies of the Obama administration.”
The banking and financial services industries aren’t responsible for those policies, Cain said. “To protest Wall Street and the bankers is basically saying you’re anti-capitalism,” he said.
Presidential candidate Newt Gingrich, who appeared on the program with Cain, offered a more measured response, but blamed the White House for the discord.
“There a lot of people in America who are angry,” Gingrich said. “This is the natural product of President Obama’s class warfare.”
Speaking on NBC’s “Meet the Press,” Rep. Paul Ryan (R-Wis.), chairman of the House Budget Committee, also pointed a finger at the president, whom he accused of fear-mongering.
“He’s preying on the emotions of fear, envy and anger. And that is not constructive to unifying America,” Ryan said. “I think he’s broken his promise as a uniter, and now he’s dividing people. And to me, that’s very unproductive.”
Ryan cited protests in his home state of Wisconsin this year over collective bargaining legisation when asked about the Wall Street movement. “I don’t disparage anyone who protests their government in favor of better government, no matter what perspective they come from,” he said.
Asked whether Cain’s criticism was representative of the party, Ryan said, “I think Herman’s speaking for himself.”
House Democratic Leader Nancy Pelosi of San Francisco on ABC’s “This Week,” essentially called Cantor a hypocrite for criticizing the Wall Street protesters while embracing the “tea party” movement.
“I didn’t hear him say anything when the tea party was out demonstrating, actually spitting on members of Congress right here in the Capitol, and he and his colleagues were putting signs in the windows encouraging them,’ Pelosi said.
Pelosi said she supported the movement’s “message.”
“I support the message to the establishment, whether it’s Wall Street or the political establishment and the rest, that change has to happen,” she said “We cannot continue in a way that does not — that is not relevant to their lives. People are angry.”
Comments »From the Most Reliable Forecasting Firm: US Economy Tipping Into Recession
Skip to the last paragraph for the money quote, although all of it is a must-read.
Early last week, ECRI notified clients that the U.S. economy is indeed tipping into a new recession. And there’s nothing that policy makers can do to head it off.
ECRI’s recession call isn’t based on just one or two leading indexes, but on dozens of specialized leading indexes, including the U.S. Long Leading Index, which was the first to turn down – before the Arab Spring and Japanese earthquake – to be followed by downturns in the Weekly Leading Index and other shorter-leading indexes. In fact, the most reliable forward-looking indicators are now collectively behaving as they did on the cusp of full-blown recessions, not “soft landings.”
Last year, amid the double-dip hysteria, we definitively ruled out an imminent recession based on leading indexes that began to turn up before QE2 was announced. Today, the key is that cyclical weakness is spreading widely from economic indicator to indicator in a telltale recessionary fashion.
Why should ECRI’s recession call be heeded? Perhaps because, as The Economist has noted, we’ve correctly called three recessions without any false alarms in-between. [Emphasis mine] In contrast, most of those who’ve accurately predicted a recession or two have also been guilty of crying wolf – in 2010, 2005, 2003, 1998, 1995, or 1987.
Read the rest here.
Comments »More Risks of Hard Landing in China
FLASH: DEXIA RESCUE PLAN LOOKS TO BE SET
Franco-Belgian bank Dexia was set to be broken up and partly nationalised after being slammed by a funding squeeze in the latest warning sign about the health of Europe’s struggling lenders.
The rescue of Dexia, which has global credit risk exposure of $700 billion — more than twice Greece’s GDP — came as the leaders of French andGermany agreed in a joint press conference that European banks needed to be recapitalised, but papered over differences on how that would happen.
Details of the rescue were not revealed while Dexia’s board met in Brussels to approve the plan, but it will call for the bank’s Belgian retail unit and French municipal finance operations to come under government control.
Dexia was forced to seek state help for the second time in three years after a liquidity crunch hobbled the lender and sent its shares down 42 percent over the past week.
French Prime Minister Francois Fillon, his Belgian counterpart Yves Leterme and Luc Frieden, the finance minister of Luxembourg, where Dexia has a large presence, had found a solution for the stricken Franco-Belgian bank, Leterme’s office said early Sunday afternoon.
“The three governments have agreed to put a proposal to the board which fits completely with the goals of the Belgian government, which means to take over Dexia Bank Belgium, secure it and turn it into a very safe bank,” Leterme said after two hours of talks at Egmont Palace in Brussels — also the site of negotiations for a previous Dexia rescue in 2008.
At stake in the talks is how much each government will have to contribute to help wind down Dexia, a thorny subject given that Belgium and France are already struggling to contain large deficits.
The need to recapitalise banks is emerging as another strain for European governments whose budgets are already stretched. Belgium had a debt-to-gross domestic product ratio of 96.2 percent last year, lower only than Greece and Italy among euro zone members and on a par with bailout recipient Ireland.
“I am convinced that it is possible … by tomorrow morning to have an agreement in which Belgium resolves the issue without pushing up the debt level of our country too high,” Leterme told Belgian television before Sunday’s talks.
The burden of bailing out Dexia led ratings agency Moody’s to warn Belgium late on Friday that its Aa1 government bond ratings may fall.
Dexia, which used short-term funding to finance long-term lendings, has found credit drying up as the euro zone debt crisis worsened. This problem has been exacerbated by the bank’s heavy exposure to Greece.
Dexia’s near collapse stoked investors’ anxieties about the strength of European banks and coincided with growing talk about coordinated EU action to recapitalise banks across the continent.
Germany and France have so far been split over how to recapitalise shaky European banks. Paris wants to tap the euro zone’s 440 billion euro ($594 billion) European Financial Stability Facility (EFSF) to recapitalise French banks, while Berlin is insisting the fund should be used as a last resort.
There were fresh reports over the weekend that France’s top banks BNP Paribas and Societe Generale could agree to capital injections as part of a Europe-wide plan to boost lenders’ financial strength, although both banks continue to deny such plans.
Dexia’s overhaul will likely see its French municipal financing arm split from the group and merged with French state bank Caisse des Depots and Banque Postale, the French post office’s banking arm.
The Belgian government will nationalise Dexia’s largely retail banking business in Belgium. Media reports said it would have to pay 4 billion euros to do so.
Healthy units, such as Denizbank in Turkey, will be sold.
A ‘bad bank’ supported by state guarantees will hold 95 billion euros in bonds, including 12 billion euros of sovereign debt of weaker euro zone periphery nations.
Including 7 billion euros of securities linked to U.S. mortgages, France and Belgium may need to provide guarantees to cover up to 200 billion euros of assets, which would be more than 55 percent of Belgian GDP. Belgium, under an agreement reached between the governments on Sunday, will guarantee 60 percent of the bad assets while France will be responsible for most of the rest, sources familiar with the talks said.
The key issues are how to divide up the ‘bad bank’ asset guarantees, how much Belgium should pay to nationalise Dexia’s Belgian banking business and whether others, such as Belgium’s regions, would be involved in its purchase.
Dexia’s shares have been suspended since Thursday afternoon..
Comments »Banks Launch Internal Reviews to Prevent Rogue Trading
Major US banks are conducting massive examination of their compliance procedures that monitor trading activities in the aftermath of UBS’s rogue trading scandal in what compliance executives say is one of the largest bank-led examinations of internal compliance procedures, the FOX Business Network has learned.
The internal reviews, conducted by Bank of America (BAC: 5.90, -0.38, -6.05%), Citigroup (C: 24.63, -1.39, -5.34%) and JPMorgan (JPM: 30.70, -1.68, -5.19%), are being sparked at least in part by the expectation that federal and international securities regulators such as the US Securities and Exchange Commission, and Britain’s Financial Services Authority will soon conduct reviews of how well big banks monitor trading activities.
Comments »MUSTACHE PUNCHING, BEARD CUTTING AMISH ON AMISH VIOLENCE
Four Amish men have been arrested, charged in one of four bizarre attacks on other Amish people.
The attackers barge into homes and use scissors to cut the beards and hair of the victims.
Investigators believe members of the “Bergholz Clan,” which has been described as a group of religious castoffs, are responsible.
The attacks have happened in four different counties in Eastern Ohio: Jefferson County, Holmes County, Trumbull County and Carroll County.
Experts say that Amish men are required to let their beards grow after they’re married and that women follow Biblical rules that they’re not to cut their hair.
The attacks, they say, are meant to shame and humiliate the victims.
“As one Amish man told me he’d rather be dead than have his beard cut off,” said Jefferson County Sheriff Fred Abdalla.
Apparently, the motive was to punish people who had weak faith, and the attackers would take back hair to prove they had carried out the assaults.
The four men are charged with kidnapping and burglary in one of the four attacks. They’re being held on $250,000 bond each.
Comments »Latest Rig Count Figures…
US rig counts reverse last week’s drop. Up 22 this week. Still up 20% YoY.
International sees a drop of -9. Up 5% YoY.
Comments »Brooklyn Tough Oakland Raiders Owner & NFL Pioneer Al Davis Dies
Al Davis, the renegade owner of the Oakland Raiders who bucked NFL authority while exhorting his silver-and-black team to “Just win, baby!,” died Saturday. He was 82.
The Hall of Famer died at his home in Oakland, the team said. The cause of death was not immediately disclosed.
Davis was one of the most important figures in NFL history — a rebel with a subpoena. That was most evident during the 1980s when he went to court — and won — for the right to move his team from Oakland to Los Angeles. Even after he moved the Raiders back to the Bay Area in 1995, he sued for $1.2 billion to establish that he still owned the rights to the L.A. market.
It was Davis’ willingness to take on the establishment that helped turn the NFL into money-making giant that it is — the most successful sports league in American history.
“Al Davis’s passion for football and his influence on the game were extraordinary,” commissioner Roger Goodell said. “He defined the Raiders and contributed to pro football at every level. The respect he commanded was evident in the way that people listened carefully every time he spoke. He is a true legend of the game whose impact and legacy will forever be part of the NFL.”
But Davis was hardly an NFL company man.
Not in the way he dressed — usually satin running suits, one white, one black, and the occasional black suit, black shirt and silver tie. Not in the way he wore his hair — slicked back with a ‘50s duck-tail. Not in the way he talked — Brooklynese with Southern inflection. Not in the way he does business — on his own terms, always on his own terms.
Elected in 1992 to the Pro Football Hall of Fame, Davis was a trailblazer. He hired the first black head coach of the modern era — Art Shell in 1988. He hired the first Latino coach, Tom Flores; and the first woman CEO, Amy Trask. And he was infallibly loyal to his players and officials: to be a Raider was to be a Raider for life.
Coach Hue Jackson told the team of Davis’ death at a meeting in Houston on Saturday morning.
Davis was charming, cantankerous and compassionate — a man who when his wife suffered a serious heart attack in the 1970s moved into her hospital room. But he was best known as a rebel, a man who established a team whose silver-and-black colors and pirate logo symbolized his attitude toward authority, both on the field and off.
Until the decline of the Raiders into a perennial loser in the first decade of the 21st century he was a winner, the man who as a coach, then owner-general manager-de facto coach, established what he called “the team of the decades” based on another slogan: “commitment to excellence.” And the Raiders were excellent, winning three Super Bowls during the 1970s and 1980s and contending almost every other season — an organization filled with castoffs and troublemakers who turned into trouble for opponents.
“Al was a football man — his entire life revolved around the game he loved,” said Tennessee Titans owner Bud Adams, an original AFL owner of the Houston Oilers. “He worked his way up through the ranks and had a knowledge of all phases of the game. That experience aided him as an owner. He was quite different from every other owner in that way. As an AFL guy, he was in that group of people who pushed our league forward. I didn’t get to see him over the last few years and I know many, including myself, will miss him.”
READ MORE HERE AT WASHINGTON POST
Comments »Looking at the Week Ahead
Third-quarter earnings season kicks off next week with the traditional first report coming from Alcoa (AA: 9.71, -0.17, -1.72%) on Tuesday.
A handful of bellwether companies will also report next week, including Pepsico (PEP: 61.02, +0.45, +0.74%) on Wednesday, and Google (NASDAQ:GOOG) and JPMorgan Chase (JPM: 30.70, -1.68, -5.19%) on Thursday.
Economic data next week will center on the moods and habits of the consumer, a vital gauge of where the economy is headed given that consumer spending represents roughly 70% of the U.S. economy.
Laden with debt and fearful for their jobs, the U.S. consumer has been thrifty recently, which has contributed significantly to the drag on the economic recovery. Investors will be looking for something positive from the release Tuesday of the IBD/TIPP Economic Optimism Index for October, and the preliminary Reuters/University of Michigan Consumer Sentiment Index due Friday.
Minutes from the Federal Reserve Board’s two-day September meeting will be released Tuesday and no surprises are likely. The Fed has already approved a $400 billion shift in its portfolio from short-term to long-term securities in an effort to reduce long-term interest rates on loans such as mortgages.
Details may emerge on the rift between three FOMC members who dissented from the portfolio shift and the majority of the 10-member board led by Chairman Ben Bernanke who support further Fed interventions.
The so-called Volcker Rule, part of last year’s sprawling Wall Street reform legislation, will be unveiled on Tuesday. The banking community is certain to be paying attention as the rule could curb profits from banks’ proprietary trading units.
Reports on September retail and food sales are due Friday. Those numbers will also be impacted by the dour mood of the consumer.
The September Import and Export Price Indexes will be released Friday and are expected to rise slightly due to a small bump in oil prices during September. A report on business inventories for August is also due Friday.
Galleon Group founder Raj Rajaratnam, convicted in one of the largest insider trading schemes ever, will be sentenced on Thursday.
Comments »Facebook to Offer Tips, Advertising Credits to Small Businesses
Small businesses just got another reason to be on Facebook: access to up to $10 million in free advertising credits.
The social media giant has joined forces with the National Federation of Independent Businesses and the U.S. Chamber of Commerce to help U.S.-based small businesses grow and create more jobs by using Facebook. The initiative is intended to teach small businesses how to use Facebook to generate new customers, retain existing ones and build an online community through things like buying display ads targeting specific markets as well as other cost-free measures.
While many small businesses may be disenchanted by the idea of being on Facebook, its sheer number of users is reason enough not to ignore it. Facebook claims to have more than 800 million users–a potential massive audience for small businesses if targeted properly.
Comments »Oil Spill Threatening New Zealand’s Coast
ENVIRONMENTALISTS in New Zealand warned yesterday of a looming marine disaster as an oil spill from a grounded container ship continued to spread, threatening wildlife including whales, seals and penguins.
At least four seabirds have been found dead in the waters around the 236m-long Rena, which ran aground on the Astrolabe reef, 12 nautical miles off Tauranga, in the Bay of Plenty, on Tuesday. Others, including a little blue penguin, have been seen covered in oil on the water nearby and there are fears the slick could move towards the fragile environment of the nearby Mayor Island marine reserve.
Nick Smith, the Environment Minister, said the spill, which is now 6km long, “has the potential to be New Zealand’s most significant marine pollution disaster in decades”.
Andrew Berry, the pollution response service manager of Maritime New Zealand, told NZ radio: “(The grounding) has the potential to be very, very serious indeed, because of the age of the ship, the damage that she’s sustained and the 1700 tonnes of oil on board.”
The Bay of Plenty, which stretches 240km down the east coast of the North Island, is one of the country’s most popular tourist spots. Named by Captain Cook for its rich vegetation, the bay’s abundant ocean life has made it a popular spot for diving enthusiasts and game fishermen. It is also on the whale migration route, and a blue whale and her calf were seen in the area last week, raising fears that they could be put at risk.
Graeme Butler, who runs an eco-tourism whale and dolphin watching charter, said the oil spill into the bay’s pristine waters was larger than the official estimate and was already a disaster. “I would say the official estimate of 6km is a conservative one,” he said. “This is a shocking disaster.”
Mr Butler added. “It could not have happened at a worse time, coming into spring and the breeding seasons.
“It is already a disaster for the Astrolabe reef and will only get worse. It’s hideous to think of the impact on the sea life. This is the most common time to see blue whales and there are lots of minke whales about at this time, too. The idea of them having to compete for space with an oil slick doesn’t thrill me. This is going to have a significant impact for years.”
Preparations for an on-water oil recovery operation involving the use of specialist equipment including booms to scoop the oil off the surface, began yesterday after early efforts to disperse the oil appeared to be unsuccessful. However, fears are growing that the ship could break in two in heavy weather, leading to a catastrophic release of oil.
John Riding, a marine expert from Marico Marine, said the ship had moved slightly and was highly likely to break up. “I truly doubt that she will float if she breaks in two and unfortunately that is a real scenario, given that she is laden,” he said, adding that bad weather and heavy swells forecast for the coming week could prove disastrous unless the fuel was taken off now.
If the ship broke up, it could affect the entire east coast of the North Island, he said.
Maritime NZ has 100 staff in the area monitoring the situation while specialist equipment is being brought in from Australia and elsewhere in NZ. Experts, including a naval architect from The Netherlands, are on board, and looking at ways to remove the oil and stabilise the ship.
However, Steven Joyce, the Transport Minister, admitted that the operation to disperse the oil and salvage the ship was “very complex and difficult”. He told reporters: “I would not choose to start from the position these people have found themselves in.”
He told The New Zealand Herald: “The difficulty is that the situation is deteriorating and according to the advice I’ve received, there’s the possibility it could break up and sink.”
Rena was declared a hazardous ship yesterday as the slick doubled in size in a few hours. Rob Service, an on-site controller for Maritime NZ, said oil was still leaking intermittently from the Liberian-flagged vessel, apparently from pipes damaged when it hit the reef. However, he said there was no sign yet that a large amount of oil had been released into the sea.
Environmentalists criticised the official response for being too slow. “We are very concerned to see this incident inexorably moving into a full-scale environmental disaster,” said Gary Taylor, chairman of the Environmental Defence Society, one of the country’s leading ecology groups.
Karen Baird from the animal welfare organisation Forest and Bird said scores of birds were at risk from the spill including penguins, terns, gulls and gannets. “Landing in the oil slick is a death sentence for these birds,” she said.
Comments »Documentary: The Men Who Crashed the World
Enjoy your weekend !
[youtube:http://www.youtube.com/watch?v=ZWU65Zbka4E&feature=player_embedded#! 450 300] [youtube:http://www.youtube.com/watch?v=pqBlVBhv0ag&feature=player_embedded 450 300] [youtube:http://www.youtube.com/watch?v=JBhAvUTW5ZE&feature=player_embedded 450 300] [youtube:http://www.youtube.com/watch?v=bZwMIIJLWOw&feature=player_embedded 450 300] Comments »The Case for The Next Sub Prime Debacle…Only This Time it’s Prime
Mortgage Fraudster Plotted Murder of “Rat”
he convicted mastermind of a $100 million mortgage fraud scheme has been charged with plotting the murder of a “rat” who testified against him.
“He’s a p—y, a total f–king p—y,” Aaron Hand was taped at the Coxsackie Correctional Facility, referring to the witness who put him in prison for 8 1/3 to 25 years, according to prosecutors.
“I wish I was there to see his f–king face,” prosecutors say he told an undercover cop who was posing as a hit man. “Watch him f–king suffer.”
If the witness’ wife and two young children happened to be home? They might have to be killed as well, Hand mused on wiretaps.
Read more: http://www.nypost.com/p/news/local/manhattan/prison_whack_mole_ptDesrgXJanlWuQDd4mCeM#ixzz1a7Mg4vAy
JPM Out With a Call of 1475 S&P by Years End; Explained in Charts
Funny cause this morning they said cash is better than emerging market exposure. If the S&P is going higher why would emerging markets not ? Inflation perhaps…..
Comments »A History of Growing Pains In Urban Sprawl
Would not call it a ponzi scheme, but rather a mistake to anticipate future problems. As always man does without thinking of consequences. Preventive medicine should be our first thought process.
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