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Comments »Monthly Archives: March 2013
Place Your Bets Early as The Philippines Looks to Become the Next Macau
“Event
On March 16th Bloomberry Resorts’ Solaire Manila, the first of four giant casino resorts that are to be opened the next four years, started trading in the capital.
Analysis
The resort lies at the heart of the Philippine government’s ambitious plan to make Manila a major gaming hub in Asia, alongside Singapore and Macau.
The government wants to create a Las Vegas-style strip consisting of four casino resorts, Entertainment City, as a key element of its plans to develop tourism as a major industry. It is hoped that an increase in tourism will create jobs and boost incomes, especially in remote areas far from large cities. The government wants to raise tourist arrivals to 10m a year by 2016, from 4.3m in 2012…..”
Comments »$AMZN Said to be Close to a Cloud Computing Deal with The CIA
“The CIA is on the verge of signing a cloud computing contract with Amazon, worth up to $600 million over 10 years, reports Frank Konkel at Federal Computer Week.
If the details about this deal are true, it could be a game-changer for the enterprise cloud market.
That’s because Amazon Web Services will help the CIA build a “private cloud” filled with technologies like big data, reports Konkel, citing unnamed sources.
The CIA is pretty closed-lipped about its business, as spies are apt to be. This is no exception. It won’t confirm the deal or comment on it, so details are sketchy. But the contract is expected to be for a “private” cloud, which is not what AWS is known for.
AWS is the largest “public” cloud provider. In general, the term “private cloud” means using cloud computing technologies in a company’s own data center. Public clouds are in hosted facilities, where the hardware is shared with many users. Sharing the hardware saves money.
Amazon hasn’t been very interested private clouds. Years ago, it even argued against them. If companies want private clouds based on Amazon’s tech, they often go to startups like Eucalyptus Systems….”
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The Nikkei Gaps Up 2% on the Mending of Cyprus Bailout Woes
The bulls should be happy all over the planet as bad news does not kill markets, like the Cyprus March madness, and good news helps to vault markets higher.
Comments »Former Trade Commissioner of Cyprus Warns of Bank Runs
Meatball Report: $HLF Executives Uncomfortable With Carl, I Want 3 Seats on Your Board, Ichan
“Fox Business’ Charles Gasparino reported that Herbalife Ltd. (HLF) executives are apparently becoming a bit uncomfortable with Carl Icahn’s interest in their company. He has a history of being involved in corporate shakeups, and a source has apparently told Gasparino that the company’s executives are worrying and wondering about what he might do.
Herbalife Ltd. (NYSE:HLF) executives are apparently starting to become concerned about what activist investor Carl Icahn’s intentions are in sticking up for the company. Fox Business’ Charles Gasparino had the exclusive new details.
Icahn initiated a long position in Herbalife Ltd. (NYSE:HLF) in January, going head to head with fellow activist investor Bill Ackman, who gave an extensive short thesis on the stock in December and called the company a pyramid scheme. Icahn now has a 15 percent stake in the controversial nutritional supplement company and is able to appoint two directors to the company’s board and also increase his stake in the company to 25 percent…..”
Comments »The Thought Process Behind Cyprus
“The Deeper Meanings of Cyprus (March 18, 2013)
The deposit-confiscation “bailout” of Cyprus reveals much about the Eurozone’s fundamental neocolonial, neofeudal structure.
At long last, Europe’s flimsy facades of State sovereignty, democracy and free-market capitalism have collapsed, and we see the real machinery laid bare: the Eurozone’s political-financial Aristocracy will stripmine every nation’s citizenry to preserve their power and protect the banks and bondholders from absorbing losses.
The deposit-confiscation “bailout” of Cyprus confirms the Eurozone’s fundamental neocolonial, neofeudal structure and the region’s political surrender to financialization.
The E.U., Neofeudalism and the Neocolonial-Financialization Model (May 24, 2012)
Let’s list what Cyprus reveals about the true state of financial-political power in Europe:
1. The Core-Periphery terminology masks the real structure: the E.U. operates on a neocolonial model. In the old Colonialism 1.0 model, the colonizing power conquered or co-opted the Power Elites of the periphery regions, and proceeded to exploit the new colonies’ resources and labor to enrich the Imperial core.
In Neocolonialism, the forces of financialization (debt and leverage controlled by State-enforced banking cartels) are used to indenture the local Elites and populace to the financial core: the peripheral “colonials” borrow money to buy the finished goods manufactured in the core economies, enriching the Imperial Elites with A) the profits made selling goods to the debtors B) interest on credit extended to the peripheral colonies to buy the core economies’ goods and “live large”, and C) the transactional skim of financializing peripheral assets such as real estate and State debt.
In essence, the core banks of the E.U. colonized the peripheral nations via the financializing euro, which enabled a massive expansion of debt and consumption in the periphery. The banks and exporters of the core exacted enormous profits from this expansion of debt and consumption.
Now that the financialization scheme of the euro has run its course, the periphery’s neocolonial standing is starkly revealed: the assets and income of the periphery are flowing to the core as interest on the private and sovereign debts that are owed to the core’s central bank and its crony money-center private banks.
This is not just the perfection of neocolonialism but of neofeudalism as well. The peripheral nations of the E.U. are effectively neocolonial debtors of the core (quasi-Imperial) banks, and the taxpayers of the core nations (now reduced to Germany and The Netherlands) are now feudal serfs whose labor is devoted to making good on any bank loans to the periphery that go bad.
Though we can term the E.U. a plutocracy or oligarchy, the neofeudal structure compels us to distinguish a class of those holding wealth and political power that is not limited to national border: this is an Aristocracy.
Serving the Aristocracy is a well-paid technocrat class of factotums, lackeys, toadies and enforcers. Below this well-compensated caste of technocrats is the larger class of debt-serfs, enslaved to interest payments on either their own debts or the debts of others, and bound by their class powerlessness to protecting banks and bondholders from losses.
Cyprus merely adds an expropriation twist to this well-oiled plunder: deposits will be expropriated directly to insure no Imperial (core) banks or bond holders lose money on their absurdly risky loans to periphery nations and serfs.
2. This is a supranational plunder. While commentators can wile away years debating how much Germany benefited from the euro, the real core is not national, it is supranational banks and the political machinery of the E.U. the banks have effectively captured.
The citizenry of Germany may approve or disapprove of the Cyprus expropriation, but it doesn’t matter either way: their own serfdom to banks and bondholders is simply being masked: the bailouts of periphery nations are transparently bailouts of core banks and bondholders…..”
Comments »Microsoft Probed By Justice Department Over Potential Bribery
“(Reuters) – Microsoft Corp said on Tuesday it takes seriously any allegations of misconduct, after a report that the U.S. Department of Justice is investigating potential bribery by its employees in China, Romania and Italy.
“We take all allegations brought to our attention seriously and we cooperate fully in any government inquiries,” a Microsoft spokesman said, without confirming that it was aware of any investigation….”
Comments »SEC Levels Fraud Charges Related to Facebook IPO
“A 1994 Oregon Republican gubernatorial candidate, Craig Berkman, was charged with fraud today by the U.S. Securities and Exchange Commission (SEC) for a “Ponzi-like scheme” around last year’s initial public offering of stock in Facebook Inc. (NASDAQ: FB). An associate of Berkman’s was also charged with aiding and abetting in the violations.
Berkman, who now lives in Florida, raised $13.2 million from 120 investors by selling shares in limited liability companies he owned that he claimed would either acquire pre-IPO shares of social media companies, acquire pre-IPO shares of Facebook, or acquire a company that already owned pre-IPO shares of Facebook.
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Why the Markets May Be Underestimating Cyprus
“Investment banks were rolling out those opinions on whether Cyprus really matters on Tuesday. Among these, J.P. Morgan Cazenove warns we’re all getting a little too relaxed, too soon.
(Markets are looking a hair calmer Tuesday – the Nikkei nearly recouped all of its prior-day losses, U.S. stock futures rose a bit, though Europe stocks were lower. That’s after Monday’s chaos, triggered thoseplans to levy deposit holders in Cyprus. )
J.P. Morgan Cazenove says Cyprus is between a rock and a hard place and predicts its parliament will refuse to pass the deposit levy/bailout package in current terms. The analysts give Cyprus three options, none of them great:
- Insured depositors pay nothing, uninsured pay 15.4%. This isn’t workable because the bulk of that would fall on Russia, who would then likely play hardball with its existing €2.5 billion loan to Cyprus. And Cyprus needs that money.
- Ask for more Troika support. But J.P. Morgan says it’s unlikely Cyprus is going to get much tweaking on the deal hammered out.
- Tweak the deal so that less pain falls on insured depositors, such as those with less than €100,000 pay 3%, those with less than €500,000 pay 10% and more than €500,000 pay 14%. J.P. Morgan says this looks like “shifting deckchairs,” and Cypriots are likely to stay angry no matter what….”
Nomura: China Faces ‘Rising Risks of a Systemic Financial Crisis’
“China is flashing warning signs that a financial crisis may be approaching, say two Nomura economists.
Those signs include a sharp rise of leverage, a slowdown in economic growth and skyrocketing property prices, assert Nomura economists Zhiwei Zhang and Wendy Chen in a research note obtained by CNBC.
Ominously, those were the same factors behind the 2008 financial crisis in the United States.
“China faces rising risks of a systemic financial crisis and the government needs to take action quickly to contain such risks. We believe the true extent of financial risks in China is not fully appreciated by investors,” they state.
However, China may be able to avoid a crisis by tightening its monetary policy, they say. “This is clearly a dangerous choice, but we cannot rule it out given political pressures to maintain strong growth.”
Leverage, defined as the ratio of domestic credit to gross domestic product (GDP), has increased from 121 percent in 2008 to 155 percent in 2012. That’s the highest since record keeping began in 1978.
“China’s leverage rose by 34 percent of GDP in five years — a worrying sign given its history,” they write, according to CNBC. By comparison, leverage in the United States increased by about 30 percent of GDP in the five years preceding the financial crisis.
Economic growth in China slowed to 7.8 percent last year, the lowest rate in 13 years, due to falling productivity and population growth….”
Comments »Elizabeth Warren Floats $22 Minimum Wage
“Tripling the minimum wage to $22 an hour from its current $7.25 an hour has been suggested by Democratic Sen. Elizabeth Warren, who until now had seemed to be keeping a low profile after defeating Republican Scott Brown in November for the Massachusetts seat.
“If we started in 1960, and we said [that] as productivity goes up, that is as workers are producing more — then the minimum wage was going to go up the same. And if that were the case, then the minimum wage today would be about $22 an hour,” said Warren, the administration’s former Special Advisor for the Consumer Financial Protection Bureau.
Warren was speaking at last week’s Education, Labor and Pensions Committee hearing on “Keeping up with a Changing Economy: Indexing the Minimum Wage.”
Warren added: “So my question is . . . What happened to the other $14.75? It sure didn’t go to the worker.”
Panelist Arindrajit Dube, an assistant professor at the Department of Economics at the University of Massachusetts-Amherst, responded to Warren’s inquiry by drawing another comparison that appeared to suggest that the approximately $14 difference between today’s actual minimum wage and Warren’s hypothetical minimum wage was going to the nation’s top 1 percent of earners….”
Comments »ECB Says They Will Provide Liquidity Under Existing Rules
“We were waiting for the ECB response, and seconds ago we got it, when the ECB uttered the magic words, saying it would provide “liquidity within existing rules.” What this means is unclear, but the algos loved it and sent the EURUSD up over 50 pips higher in milliseconds. What the algos apparently don’t get is that this does not account for the additional liquidity needed that would only be released if Cyprus passed the bailout vote. The last thing the ECB wants is to appear weak, and fold letting every other broke deadbeat country to demand the same equitable treatment and diluting Germany’s political might. For now however, the is a move to be faded….”
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Judge OKs Hostess’s Twinkies, Ding Dongs Sale
“(Reuters) – Twinkies, Ding Dongs and Wonder Bread may soon be back in stores after a bankruptcy court judge on Tuesday approved sales of several iconic brands that had been owned by the failedHostess Brands Inc.
Buyout firms Apollo Global Management and Metropoulos & Co teamed up for Hostess’s snack cake brands, paying $410 million for Twinkies, Ho Hos, Ding Dongs and Donnettes.
Flowers Food Inc, which makes Tastykakes snacks, picked up most of Hostess’s bread business, including its Wonder and Nature’s Pride brands for $360 million. The No. 2 U.S. baking company also bought 20 bakeries and other operations.
The Beefsteak brand of bread was sold for $31.9 million to Mexico’s Grupo Bimbo S.A.B. de C.V., the world’s largest bread maker. Bimbo already owns Entenmann’s cakes, Arnold bread and Thomas’ English Muffins.
Hostess also said on Tuesday that United States Bakery had the winning bid in the March 15 auction for its remaining bread brands: Eddy’s, Standish Farms and Grandma Emilie’s. United States Bakery agreed to pay $30.9 million.
Hostess filed for bankruptcy last year and gave up on its plans to emerge from bankruptcy in November, blaming a strike by its bakers union for its failure to emerge from Chapter 11.
The bakers union said in a statement on Tuesday its members would be “indispensable partners” in restarting the former Hostess facilities and getting the products back into stores.
The money raised from the sales will be used to pay off Hostess’s creditors, which the company said totaled $1.43 billion when it filed for bankruptcy….”
Comments »Did the Euro Just Erase All its Looses for the Day ?
ZERVOS: There’s No Going Back, We Might Have An STD Situation Brewing
“……now he’s sounding even more nervous.
The die is cast. There is no going back for the Cypriots or the Eurozone leaders. As soon as the banks open in Cyprus there will be billions in withdrawals. The question of course is – “where will the money come from?”. Well, if the parliament votes YES, then the Euros will have to come from the Eurosystem. But there is a glitch. The Cypriots have already borrowed 10b euro via the ELA and Target2. How can Mario just wire over 20 billion more (less the 10 to 15 percent haircut) for the Russians, and another 20 to 30 billion for the wealthy Greeks. What collateral will an economy with 20b in GDP post to get this cash? Unless Mario violates every collateral rule at the ECB, the Cypriot financial system will collapse even with a YES vote. Its a wonderful life – Cyprus style….”
Comments »Cyprus Shoots Down Depositor Tax, Now Investors Worry Over Systemic Failure
“Cyprus’s parliament rejected an unprecedented levy on bank deposits, dealing a blow to European plans to force savers to shoulder part of the country’s bailout in a standoff that risks renewed tumult in the euro area.
Cypriot legislators in the capital Nicosia voted 36 against the proposal with none in favor in a show of hands today. There were 19 abstentions. Hammered out by euro-area finance chiefs at the weekend, the deal had sought to raise 5.8 billion euros ($7.5 billion) by drawing funds from Cyprus bank accounts in return for 10 billion euros in international aid….”
Comments »Market Update
After a double top this morning, the markets gave in to weakness as all eyes are on Cyprus and the EU folly banking policy.
The DOW is off 30 bones and the S&P is off 8 points. Markets have paired almost half their losses.
Currently energy is getting spanked for 1% followed cyclicals and consumer stocks.
Europe closed on the lows of the day.
Study Shows Workers Saving Too Little to Retire
“Workers and employers in the U.S. are bracing for a retirement crisis, even as the stock market sits near highs and the economy shows signs of improvement.
New data show that powerful financial and demographic forces are combining to squeeze individuals and companies that are trying to save for the future and make their money last.
Fifty-seven percent of U.S. workers surveyed reported less than $25,000 in total household savings and investments excluding their homes, according to a report to be released Tuesday by the Employee Benefit Research Institute. Only 49% reported having so little money saved in 2008.
The survey also found that 28% of Americans have no confidence they will have enough money to retire comfortably—the highest level in the study’s 23-year history.
The same forces are weighing on corporate balance sheets. Based on another recent report, the Society of Actuaries said that rising life expectancies could add as much as $97 billion to corporate pension liabilities in coming years, an increase of up to 5%.
While Americans are living longer, the extended life spans will make it tougher for workers trying to stretch retirement savings and put additional strains on pension plans….”
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