It started in Tunsia, spread to Egypt, other MENA countries, Greece, Spain and other places. Will the Arab spring reach China, and eventually the US?
Hillary Clinton doesn’t make mistakes. Let’s place to the side her unhappy 2008 run for the Democratic presidential nomination, during which, as they say, mistakes were made. As secretary of State she rarely makes an unforced error. She does, from time to time, economize the truth, even when speaking about perfectly awful regimes. But she is a diplomat now, and this is a hazard of the vocation.
So when this diplomat, who does not generally make mistakes, and who is proficient in the use of euphemism, speaks bluntly about the failings of a country on which America is disconcertingly dependent, my assumption is that we’re witnessing a deliberate shift in policy.
Not long ago, I interviewed Clinton on the meaning of the so-called Arab Spring. I raised the subject of China, and its own rough and hypersensitive reaction to the threat posed by citizens speaking their minds. Our conversation came shortly after the Chinese arrested many dissidents, most notably the artist Ai Weiwei, who made the mistake of writing a Twitter post about Tunisia’s Jasmine Revolution in February:
“I didn’t care about jasmine at first,” he wrote, “but people who are scared by jasmine sent out information about how harmful jasmine is … which makes me realize that jasmine is what scares them the most.”
Clinton said, in reference to the Chinese leadership: “They’re worried, and they are trying to stop history, which is a fool’s errand. They cannot do it. But they’re going to hold it off as long as possible.”
The Elite can control the masses up to a certain stage, but after a while, when people’s demands get too strong, you end up with a revolution and a regime change.
SNAP welcomes the US food stamp dependent back to ES futures 8 points higher after the Memorial Weekend. Unfortunately, while the Elite enjoyed barbecuing in Newport, some 45 million Americans received food stamps. This is a new record high. With today’s previous articles on Food, this trend looks to only be worsening.
The modern breadline is getting longer and longer. SNAP has released Food Stamp Usage through March 2011, and voila, we have a new record! 44.587 million Americans are now on food stamps (the breadline). There are now an additional 15 million Americans receiving food stamps than the 29 million in 2007 before the financial crisis began.
The Doc would like to know how many of those 44.587 million Americans still have cable TV, cell phones with text and data plans, or smoke 3 packs a day.
Today is a rather bizarro day. The futures opened up strong, and traded ok until midday Europe. We are seeing some pullbacks as the market in Europes heads for the close. People talk about all is fine, now when WSJ, posted a “Germany pro Greece” article. Case Shiller, Consumer confidence etc have all been coming in on the weak side today. We feel there is a dislocation in the market today, and suggest loading up on Vol at these levels. Both SPX and Dax could make some interesting formations if we got some more reversals today. SPX, still in negativ trend and DAX, a possible last shoulder forming, charts below;
Case Shiller takes another dive. Bad news, but today the market is focusing on fire sales to come in the Greek Archipelago. Euro surging, oil, silver and ES futures all surging, while US housing is taking the double dip down.
New York, May 31, 2011 – Data through March 2011, released today by Standard & Poor’s for its S&P/Case-Shiller1 Home Price Indices, the leading measure of U.S. home prices, show that the U.S. National Home Price Index declined by 4.2% in the first quarter of 2011, after having fallen 3.6% in the fourth quarter of 2010. The National Index hit a new recession low with the first quarter’s data and posted an annual decline of 5.1% versus the first quarter of 2010. Nationally, home prices are back to their mid-2002 levels.
Don’t forget the long term picture…
It is a RISK ON day today, mainly due to the WSJ report about Germany giving Greece some slack. Athens is surging today, although the index is trading where it was only some days ago. The question is; Are people going to accept all these asset sales and further Austerity? Below from Kathimerini;
The spontaneous protest gatherings in Greece’s public squares that we have seen over the past few days can be defined as being somewhat lacking in cohesion as even the most popular slogans shouted are not to the liking of everyone and not everyone is happy to make rude gestures at Parliament in an effort to let off some steam.
The fact, however, is that it could be no other way given that people reach a state of indignation through the same route (that is the one-way street of the EU-IMF memorandum), but they don’t all see the same exit, if they see one at all. In any case, at these rallies we see a large part of society come together, most of whom will say that they don’t see any of our politicians as being fit to govern in opinion polls and who will opt to abstain from general elections. Their physical presence, even if it is without a statement, is authentically political.
Of equal interest to the actual gatherings is the sense of discomfort they have inspired in Greece’s politicians, who fear that they may not be able to take the heat, especially when it is also coming from their usual allies in the media. They can’t really condemn the protests since they have no overt political agenda, are not violent and do not have a negative effect on business in the city center or really on traffic.
Of course those political parties and media pundits who believe that theirs is the only truth were quick to condemn the slogans at the gatherings as shallow, in an effort to hog all the indignation for themselves. Then there are those who like to assign the gatherings with content, their own kind, through deeply condescending statements.
Where this mass indignation will lead is still open. But the fact that something remains open when everything else looks so dismally shut and decided is a reason to rejoice, as is the peaceful nature of these rallies and the fact the indignant are sticking it out.
Below the latest news of relevance for the Food Prices. We will bring you freshly updated charts directly from FAO, when they post their new Food report. Below some of the most interesting subjects on Food this past month. Courtesy Silvio at FAO.
Here we go, Nokia delivering a huge profit warning. The world’s biggest mobile device company is cancelling all previous guidance, slashing everything there is to slash, and the stock is collapsing. It sure seems Jobs won this battle over Microsoft. Last time the stock traded at these prices, the company was producing tyres and wellington boots and back then phones looked like this. No touchscreen, but you could send text messages…
Selling of those government assets, to the vampire squid creditors, might not pass smoothly. The Greek people are experiencing going from bad to worse, and now they should sell assets at fire sale prices, dictated by the creditors. Whatever happens, Greece needs more money, and people are getting overly angry. Expect the protests to escalate further. Kathimerini reports;
Workers at Greek ports will stage a work stoppage between 11 a.m. and 3 p.m. on Tuesday to protest the government’s privatization plans.
Rallies will also be held in Piraeus and Thessaloniki. Employees of the Piraeus Port Authority (OLP) will march to the Marine Affairs Minsitry.
The government is looking at selling its entire holdings in OLP and Thessaloniki Port Authority (OLTH) by the end of the year and will seek buyers for between 43 percent and 66 percent of other ports in which it has stakes in 2012 and 2013, the Finance Ministry said earlier this month.
OLP reported a first-quarter net loss of 2.9 million euros, compared with a profit a year earlier, as sales slipped 33 percent.
“The total sell-off of all profitable public companies is an incomprehensible and criminal political act,” the Union of Port Workers said in an statement when the sell-off plans were announced.
For those wishing to get a insight into the Greek Dilemma, below is some good reading by Fitch. Irrespective of Germany being the savior for the day, Greece is running out of cash in July, and something needs to be done. New bail out, or why not leave the creditors?
Fitch Ratings downgraded Greece’s Long‐Term Foreign‐ and Local‐Currency Issuer Default Ratings to ‘B+’ from ‘BB+’ on 20 May 2011, and put the ratings on Rating Watch Negative (RWN). The severity of the rating action reflects the scale of the challenge facing the Greek authorities as they prepare to undertake more intensive fiscal and structural reforms to restore sovereign creditworthiness and lay the foundations for sustained economic recovery. Fitch believes that implementation and political risks have risen and that there is a high probability that the IMF‐EU programme, as it currently stands, will cease to be fully funded beyond 2011.
Fitch first articulated the risk of renewed funding gaps emerging in 2012 in January 2011, at the time of an earlier downgrade of Greece’s sovereign ratings to ‘BB+’ from ‘BBB−’. In Fitch’s view, the outcome of the EU Heads of Government Summit in March heightened this risk still further, by raising market perceptions of the inevitability of some form of debt restructuring under the auspices of the newly created European Stabilisation Mechanism (ESM). Investor sentiment towards Greek sovereign risk in the wake of this initiative has deteriorated to such an extent that Fitch now believes that it is highly unlikely that Greece will be able to regain market access during the remaining life of the IMF‐EU programme (May 2013).
Incorporated into the ‘B+’ rating is Fitch’s expectation that substantial new money will be forthcoming for Greece from the EU and the IMF and that Greek sovereign bonds will not be subject to a “soft restructuring” or “re‐profiling” that would trigger a “credit event” and consequently a default rating from the agency. Earlier in 2011 the IMF and EU agreed to more lenient repayment terms on its existing support package, including an extension of maturities. This “credit event” did not affect market debt. However, Fitch reiterates that any extension of maturities on existing sovereign bonds would be treated as a default event and that the Hellenic Republic and its obligations would be rated accordingly.
Euro and other risk currencies ripping higher today, just like the ES future, on news Germany will “fix” Greece. Remember though, Greece is out of cash within a month or so. We are still getting a lot of political noise of what to do, without any kind of solution clear. The moves in currencies today, is most probably due to the masses being wrong again. After the Euro spec longs hit highest levels since 2007, just about when the Euro topped out, we got that big move in USD, that totally stopped out many Euro longs on the way down. We then saw huge stops in Euro, taking spec longs to neutral, while the USD spec longs even went small long (first in a long time). To conclude, we had the highest Euro spec longs at the top, these positions had to be unwound quickly as the Euro collapsed. With todays move up, and possibly another day or so, the last momos that shorted the Euro at the bottom will be closing their positions. Chart below, coutresey ZH;