The soap opera continues. We will hear more on this in near future. If any of this is true, we hope the Greek bail out plan was a little more thouroughly well thought by the might Strauss Kahn.
The maid said she tried a variety of tactics to get herself out of the room and away from Strauss-Kahn. She said, “my manager is in the hallway,” which he wasn’t — but the former IMF chief wasn’t scared off. The single mother allegedly told the Frenchman that the job was important to her and any conflict with a hotel guest would result in her losing her job.
“Please stop. I need my job, I can’t lose my job, don’t do this. I will lose my job. Please, please stop! Please stop!” she told Strauss-Kahn, according to law enforcement sources.
Strauss-Kahn allegedly responded: “No, baby. Don’t worry, you’re not going to lose your job. Please, baby, don’t worry,” Strauss-Kahn responded, according to investigators. “Don’t you know who I am? Don’t you know who I am?”
Read more: http://www.foxnews.com/us/2011/05/23/exclusive-dsk-told-maid-dont-you-know-who-i-am-during-alleged-sex-attack/#ixzz1NFmw7GW2
Looks like the action in Europe is going to continue. A total lack of trust in Greek politics, austerity and a credible plan to fix the economy is unfolding. Capital markets are closed to Greece, investors are not buying the mumbo jumbo from Greece. Looks like next word to remember is “reprofiling“. Any way to short the ECB? Below Google translation from FD.NL.
The euro countries have secretly started preparing for an extension of the Greek term debt and the establishment of an independent Greek authority to sell state assets.
That report Brussels sources. The plans, designed to help Athens meet its financial obligations, are extremely sensitive. The European Central Bank (ECB) is opposed to restructuring of the Greek debt. This part of investors would have to give up their claims. The ECB fears that this act the European financial sector ending up in a new crisis.
According to sources, officials of the euro countries are already working on the technical preparation of a mild form of restructuring. This includes “reprofiling” of the debt, or a short extension of the maturity of bonds.
Minister of Finance Jan Kees de Jager, who yesterday talks with ECB President Jean-Claude Trichet, will re-profiling ‘a serious option only if necessary culmination of a total package. ” He wants Greece until his promises of reforms true.
Carney argues for a form of re-profiling in which the private sector remains concerned that without a ‘credit event’ is required. This can in a voluntary extension of the maturity of bonds with up to three years. In a ‘credit event’, owners of Greek entitled to compensation massive debt through credit default swaps on the bonds they have concluded the risk for separation. This would be a new shock wave in the markets may cause.
Last step in long process
Also, European Commissioner Olli Rehn of Economy and President Jean-Claude Juncker of the eurozone yesterday called “reprofiling” to solve the Greek problem.
The euro zone, according to Juncker Athens just for the sake if it has completed its austerity program. “Only then can we think about extending the appointments of public and private loans and reduce interest rates. It would be the last step in a very long process. ”
Condition, according to Juncker, however, that the credit rating maneuver is not perceived as a failure of the Greek government, either a default. “Otherwise, banks would have to write off billions, with incalculable consequences for the capital markets.”
The euro countries are also examining a suggestion by Minister De Jager. This suggested that the slow pace of privatization in Greece owned by the government to take and transfer to an independent body. “I would welcome you as our Greek friends set up a privatization agency, which is based on the German Treuhandanstalt ‘responded Juncker. The Treuhand privatized SOEs in the nineties and property from the former GDR.
As we write the below rates make new highs in Greece.
*GREEK 2-YEAR NOTE YIELD RISES 93 BPS TO EURO-ERA RECORD 27.18%
Austerity sucks, but you still need to do it. During last night’s negotiations Greece wants to raise taxes . For the Greek population already in crisis mood, this message won’t make them cheer. As we have argued, Greece need to take the big STOP, maybe even follow Belarus move last night and devaluate, but that on the other hand means leaving Euro…
The government’s midterm fiscal program, which was discussed on Monday during a tense cabinet meeting and is to be debated further on Tuesday between Prime Minister George Papandreou and his political rivals, aims to raise 6.4 billion euros through the imposition of additional direct and indirect taxes, it emerged yesterday. Of these, 4.8 billion euros’ worth have been approved by the Cabinet, while the remainder are still under discussion.
Among the measures to be implemented, assuming they are voted through Parliament later this week, is the transfer of several goods and services from the medium 13 percent value-added tax (VAT) bracket to the higher 23 percent bracket as well as the abolition of tax breaks, the imposition of taxes on natural gas and on soft drinks and an increase in road tax. (Kathimerini)
Great piece from FT’s Short view.
Remember last year when the market dropped 10% in a matter of minutes. SPX futures traded with 10 handles spread, stocks would move 10, 20, 30% in a couple of minutes. That was the Flash Crash. Next up is the Splash Crash, another crash, but this time involving all correlated assets, equities, currencies, commodities and bonds. Below from Barrons;
Last year’s Flash Crash was a hair-raising experience for stock and commodities investors—comparable to the sudden descent of a large airliner from 38,000 feet to tree-top level, followed by an equally sudden and steep ascent.
A trillion dollars in equity vanished in minutes, as stock futures, exchange-traded funds and equities plunged. I’ve recently heard from a computer-trading expert warning of the very real possibility of a more widespread and catastrophic “splash crash,” a dislocation by high-speed trading computers that could simultaneously splash across many more asset classes and markets. Imagine our metaphorical jet buried in the earth up to its tail.
Oversight of robotic trading is so slight that regulators have little idea of itsimpact. Progress Software’s Bates frets that, absent more oversight, terrorists wielding the smart machines could attack the markets in an attempt to cripple our economy. Regulators counter that it would be much more difficult for hackers to infiltrate a stock exchange than, say, a company like Sony (SNE), the recent victim of a crippling criminal cyber attack. But it isn’t impossible. Imagine an agent working for a foreign government infiltrating a firm that owns robots and infecting one or more of the machines with a malicious virus.
“You almost need something like a Norad [the joint U.S.-Canadian North American Aerospace Defense Command]… for the markets,” Bates says. Because some 15% of the U.S. economy is based on financial services and the markets, they should be protected on the basis of national security, he asserts. This is arguable. Other experts opine that the Securities and Exchange Commission is more lacking in manpower than technology and that it could stay fairly on top of the market with a hundred more mathematicians, as opposed to a billion-dollar supercomputer.
When the US economy collapsed a couple of years ago, large swaths of the media landscape dealt with the financial institutions at the root of the debacle with something like equanimity. One of the harsher critics of the crisis’ major players was Rolling Stone’s contributing editor, Matt Taibbi, who developed a sort of loose cannon appeal to the disgruntled, downtrodden, and degraded.
His reporting and editorializing often overlap, and his deliberately opinionated prose bubbles with invective aimed at the villains in his stories. At the same time, his clear and concise descriptions and his ability to streamline information have made him required reading on the subject of Wall Street perfidy.
His most recent article explores the Levin Report, a 650-page guide on how to steal money from unsuspecting citizens, also known as a rehashing of the inner workings of Goldman Sachs pre-2008, which was released by the Senior Senator from Michigan, Carl Levin.
In person Taibbi is quiet and self-aware, a sharp contrast to his acerbic and biting prose. We met for coffee in Midtown Manhattan.
Read the rest at Vice Magazine: GOLDMAN SACHS OF SHIT – Viceland Today
First you get the bail out you need, then you try AUSTERITY, which brings the country into further violence and problems. When there is no chance of refinancing the country and the economy is in full stagnation you are pressed to sell the crown jewels, and great now the guys who lent you the first money, can buy the assets at fire sale levels. This is capitalism. Below from Kathimierini;
Greece approved on Monday the first wave of privatizations aimed at helping making its debt sustainable by deciding to “immediately proceed” with the sale of stakes in several state-controlled companies, including OTE telecom and Hellenic Postbank (TT).
A statement issued by the Finance Ministry said the Cabinet agreed on the plan which aims to raise 50 billion euros by 2015 by also reducing holdings in Piraeus and Thessaloniki ports as well as the Thessaloniki water company (EYATH) “in order to front-load its ambitious program.”
“To accelerate this process, the creation of a sovereign wealth fund composed of privatization and real estate assets was also decided upon,” the ministry added.
Greece plans to sell a 10 percent stake in OTE to Deutsche Telekom and will consider selling an additional 6 percent of the phone company. A 17 percent stake in power company PPC will also go under the hammer either through the stock market or by spinning off PPC assets to a strategic investor.
Additionally, a 34 percent stake in TT will be put up for sale with an additional 10 percent in the lender possibly being listed on the Athens bourse or going to a strategic investor.
Greece has been under increasing pressure from financial markets and its creditors, the European Commission and the International Monetary Fund, to pick up the pace of the sell-off program as a condition to receiving the fifth tranche of EU-IMF aid worth 12 billion euros.
After last week’s Eurogroup meeting in Brussels, several EU leaders made it clear that any possibility of Greece being provided with additional aid to the 110-billion-euro agreement signed last year will require faster execution of the sell-off program.
Meanwhile, data from the Finance Ministry released on Monday showed that the general government deficit in the first four months of the year was slightly larger than expected as revenues dipped under the weight of the recession.
The general government deficit, which does not include budget data from local councils and state enterprises, reached 7.2 billion euros, versus an expected 6.9 billion euros.
Revenues in the January-April period dipped 9.1 percent year-on-year to 14.4 billion euros, some 1.2 billion short of the target, due to a deeper-than-expected recession in the last quarter of 2010 and last year’s one-off revenue boost to road tax which was not repeated.
For the period, ordinary budget expenditures were up 3.6 percent at 21.02 billion euros, compared with a four-month target of 20.84 billion.
Fitch revises Belgium, the country sans government. The same country is host to the failing Euro experiment.
Fitch Ratings has revised Belgium’s rating Outlook to Negative from Stable and affirmed its Long-term foreign and local currency IDRs at ‘AA+’. The Negative Outlook reflects Fitch’s concerns over the pace of structural reform in the coming years, along with the ability to accelerate fiscal consolidation without a resolution to the constitutional crisis. Despite the ongoing political dispute, however, day-to-day fiscal management has remained strong, in keeping with Belgium’s high-grade rating
Congratulations to the happy owners of LinkedIn at 120 Usd, where the stock was priced at 1250 P/E. But this time it’s different, or? People’s greed creates bubbles just like this time. When LinkedIn trades at 60, the 120 investor will feel the bubble has burst, and that will happen sooner than later, irrespective of this time being different. Welcome to Irrational Exuberance again. Below from PWC,
“There does not appear to be a bubble forming for the technology sector as a whole, and there also appears to be some support for the valuations of social media sites,” says PricewaterhouseCoopers’ technology valuations specialist Simon Harris, who just published PwC’s latest Valuation Index…
According to the index:
“At the height of the tech boom in 2000, Price/Earnings (PE) ratios for UK listed technology companies peaked at close to 90x, compared to a wider multiple of around 25x for the market as a whole.
“Today, the PE ratio for listed technology companies of 16x is only slightly higher than for the overall market multiple of 15x, with a similar picture in the US. So a bubble does not seem to be forming for the technology sector as a whole, certainly for quoted businesses.”
PwC shows that PE for listed technology companies has actually crashed since 1999…
But the accounting firm acknowledges that, for businesses in sectors like social media, PE is not necessarily the best metric on which to draw valuations – nor, therefore, on which to call a bubble. PwC partner Ian Coleman says: “When you look at value per user metrics, the valuations for some of these businesses begin to make more sense.” So they have picked another metric – value per user…
Welcome to the new ERA of social networking stock valued at 1000 p/e and still cheap.