Here's my Top 10 links from around the Internet at 11 am in association with NZ Mint.
I welcome your additions in the comments below or via email tobernard.hickey@interest.co.nz.
I'll pop the extras into the comment stream. See all previous Top 10s here.
I'm thrilled that Clarke and Dawe are back at #10.
1, Show us the growth - The problem in Spain and much of Europe is a lack of growth, rather than a lack of credit.
Spain is trying to kick start lending again in its bombed out property sector by forcing banks to acknowledge their losses, but the real problem is a lack of growth.
This is the danger of concerted austerity.
When everyone is cutting the entire economy stops growing and starts contracting.
This means few are willing to borrowing.
And so the spiral goes.
Here's Edward Hugh via Bloomberg on the Spanish problem:
“Everyone I speak to in the banking world tells me the same thing, which is that there is no solvent demand for credit,” said Edward Hugh, an economist and board member of CatalunyaCaixa, a banking group seized by the Bank of Spain last year.
“The underlying problem is that there is no growth horizon for Spain.”
2. Casino scandal brewing - The Sydney Morning Herald reports Sydney's Star Casino was warned in 2010 about a widespread culture of cocaine and drug use among executives.
This story comes hard on the heels on the mysterious sacking of the Star Casino's flamboyant boss last week.
It seems a bunch of Americans arrived and things changed.
Mr Mullin and Mr Vaikunta were brought in by Tabcorp from Atlantic City in late 2009 to take control of the $850 million redevelopment of Star City casino and oversee its relaunch as The Star last October.
It was reported that the arrival of the US executives led to a radical culture change at the casino, resulting in an exodus of senior Australian management.
3. WTF - NZ Herald reports A man convicted of fraud against Dunedin based car finance group MTF worth NZ$135,000 has been sentenced to 100 hours community service.
Would he have avoided a prison sentence if he had stolen the money from a pub or a bank?
It seems there is one standard for white collar criminals in New Zealand and another for blue collar/no collar criminals.
Here's what his lawyer argued:
Boyack told the court that if Saunders was convicted, the "consequences would be catastrophic" as the offender would lose his job and go bankrupt. The defence requested a discharge without conviction.
However, this was dismissed by Judge Philippa Cunningham, who said these consequences were not out of proportion with the offending. "He would have known exactly what he was doing ... these are consequences he is going to have to suffer," she said.
After giving Saunders a discount for previous good character, remorse and family circumstances, Judge Cunningham sentenced him to 100 hours' community work.
4. Inflation is dead - Bloomberg reports on the problems many US companies are having pushing through price increases.
Companies can’t raise prices because wage growth remains stunted, even though unemployment has started to recede. Average hourly earnings rose 1.9 percent in January from a year earlier, the smallest increase since April, and down from 3.2 percent in 2008 and 3.7 percent in January 2009, the Labor Department said Feb. 3. The jobless rate fell to 8.3 percent in January, the lowest level in three years, compared with a high of 10 percent in October 2009.
“This recovery has not been a great recovery with regard to income gains, and income gains are a function of both growth in wages and jobs,” Jeffrey Rosenberg, the chief investment strategist for fixed-income at BlackRock Inc., the world’s biggest money manager, said in a Feb. 1 interview in New York. “Why can’t you pass price increases through to consumers? It’s because consumers aren’t seeing income gains.”
5. Sunshine trusts - Bloomberg reports on the growth of 'sunshine trusts' in China as investors hunt for yield in the wake of slumps in stock and property markets...
China’s private trust-fund assets tripled to 138.3 billion yuan ($22 billion) in the 18 months to Sept. 30, according to the most recent data from the China Trustee Association, while global hedge-fund assets have stalled at around $2 trillion. The sunshine funds are exempt from some rules placed on Chinese mutual funds, even as limitations such as a ban on short selling means they can’t operate as hedge funds in the same way managers in Hong Kong, London and New York can.
“It comes back to the lack of investment choices,” said Fraser Howie, a Singapore-based managing director of CLSA Asia- Pacific Markets who co-authored the book “Red Capitalism” on China’s financial system. “The challenge for China will be, can these funds really differentiate and deliver absolute performance independent of whether the stock market was rising or falling.”
6. Thai floods - It's been a horrid 18 months for natural disasters, including the Japanese Tsunami, the Queensland floods (times two), the Christchurch earthquakes (times hundreds) and the Thailand floods.
Reinsurers are really struggling and that pain is being passed on in the form of higher premiums.
The Japanese are being hammered in particular. Many manufacturers were hit in Japan and again in Thailand.
Here's Moody's on that (I don't have a link):
The severe flooding in Thailand in 2011 presents reinsurers with challenges that go beyond just significant losses, says Moody's Investors Service in a new report.
Specifically, the floods compounded losses for the year from Japanese and Australian insurers already hit by other catastrophes, present a peril the reinsurers find difficult to model, and may be followed by conditions not conducive to recouping losses. "We view Thailand flood losses as a credit negative for reinsurers," says Moody's Vice President and Senior Credit Officer Kevin Lee.
"Beyond capping off a very active year for natural disasters, the flood losses expose risk management challenges for reinsurers." Insurers expect to pay out anywhere between $10 billion and $20 billion on losses from the flooding, says Moody's. Similar to the 2011 Tohoku Japan earthquake and the 2011 Christchurch New Zealand earthquakes, much of the loss will be passed on to the reinsurance market. Because of the flooding, reinsurers suffered two sets of losses from Japanese insurers in 2011, once for the Tohoku earthquake and again for the Thailand floods.
"The floods stopped production at more than 400 Japanese firms in six industrial parks north of Bangkok. Moreover, at the time of flooding many of these Japanese firms were using their Thailand operations to mitigate business interruption losses from the March Tohoku earthquake," says Lee.
7. Growing inequality - Simon Collins has started a useful series of articles in the NZ Herald about the growing problems with poverty and inequality of incomes in Auckland.
In human terms, the Herald will reveal - in a six-part series starting today - that childhood skin infections and other infectious diseases associated with poverty and overcrowding more than doubled in the decade after the benefit cuts in the 1990s. They levelled off in the first decade of this century, and are now rising again.
And economically, many economists now see reducing inequality as a prime economic goal - both to harness our full human potential and to dampen boom/bust cycles caused by excessive lending by people who have more than they need to people who need the loans but can't afford them.
8. 'Crime has been decriminalised' - Here's Michael Hudson talking to Lauren Lyster via Russia Today (doing its bit to bring about the collapse of America) about the socialising of losses and the privatisation of profits by America's bankers. HT Iain via email. Hudson starts about 4 mins 20 seconds.
Entertainingly heretical.
9. Retroactive collective action - Bloomberg reports on how Greek politicians are looking to impose 'retroactive collective action' on the bondholders who won't agree to a 70% haircut.
This is designed to thwart the vulture hedge funds trying to greenmail the Greeks (and the Germans) into paying them more to avoid the armageddon of a formal default that would trigger default swaps and hammer banks, who (by the way) are also having to take the haircuts.
This is the sort of thing that explains why many bond buyers are so nervous now about European debt.
Because hedge funds and other holders could collectively keep the participation rate below that level, Greece has said it may approve legislation that imposes losses on investors who don’t support the voluntary swap by adding a retroactive collective action clause into its bond documentation. Such a provision would give a majority of bondholders the ability to force holdouts to accept the same terms as everyone else.
It will be difficult for holdouts to assemble enough votes to block any collective action clause, because European banks have an incentive to support the provision, fund managers said.
A lawsuit against a collective-action clause legislated by the Greek government may also be difficult to win, because it would probably have to be filed in Greece, said a hedge-fund executive whose firm holds the country’s debt and has examined the legal options.
10. Yay! - They're back. John Clarke and Brian Dawe have their first debate of the year. It's about the news business and feelings...
"Women tennis players do grunt too much...let's go to the big issues."
46 Comments
#3 I was the victim of a fraud.
I was fleased of around $200,000.00-250,000.00 from a business I had before I had to sell it. He was found guilty on 28 charges amounting to just over $100,000.00. The police I thought did a great job. When they conducted the bust he was found with 50 canabis plants he was growing for supply for which he was also found guilty.
Any ideas how long he was sentenced for?
Haha very good, but don't laugh too much as they probably could. The anti social groups tend to try and hide their illegal activities behind legitmate businesses.
My real point is that the gap between the judiciary and these gangs has become blurred, as is the question of who the real criminals are. Who is causing the most harm to society? I have heard stories of people using the gangs for debt collection because the cost of entry to a court room is too high, and the outcome less assured.
re 1,4,5,7 -
http://steadystate.org/growth-and-free-trade-brain-dead-dogmas-still-kicking-hard/
"because if growth has become uneconomic then the solution to poverty becomes sharing now, not growth in the future".
"And how can economic theorists, who make a fetish of advanced mathematics, persist in such elementary logical errors?"
How indeed.
Aussie contagion? Does this look familiar?
‘This is worrying as heavy foreign ownership of government bonds can be very dangerous, particularly when this is combined with a country running a current account deficit,’ said Doyle.
The problem in Spain and much of Europe is a lack of growth
Jobs that create growth can only exist if there are people wanting to buy or use the services arising from the job.
Maybe they are out of people who wish to buy or use the products or service
The baby boomers have aged and want for less or they don't have or want to use credit
Maybe it is Psychographics
Re Item 2
A spokeswoman for Mr Funke Kupper, who left Tabcorp last June to become chief executive of the Australian Securities Exchange,
Read more: http://www.smh.com.au/nsw/casino-bosses-warned-of-staff-drug-culture-20120206-1r1x6.html#ixzz1lf2hg1RD That is brilliant
"Greece's coalition government caved in to demands to cut civil service jobs, announcing 15,000 positions would go this year, amid mounting international pressure to agree on austerity measures needed to secure major new debt agreements." herald
Next up........ New Zealand
A hint of how bad things really are!
http://online.wsj.com/article/SB10001424052970204369404577206651681198934.html
Silver and gold are not really commodities as such....they are highly speculative....they dont figure in CPI.......
Insurance hikes are due to Chch Eq both the re-insurance costs and EQC costs....so that gets "ignored"...
Fuel again is highly volitile, what did you expect with peak oil...
Food? well the whinners about the price of tomatoes are quiet now they are <$3.50 a kilo.....funny that....
When you look at core inflation its stubbornly at 2% and in danger of dropping......
Housing is mostly going no where, wages no where....claiming farmland is ip is dubious at best....URL?
Retail is doing badly.....people work there and get laid off, that isnt discretionary spending...getting cut....
Public servants are being cut or getting temp contracts....same effect as retail....
The overall trend is deflationary not inflationary...
regards
Sorry even CPI at 2% is inflation. I get where you are comming from, and I'm looking deeper into the whole deflation argument. If inflationists are wrong, then surely deflationists are wronger? Looking at the CPI only shows a small part of inflation, ie. the US housing bubble was going nuts, while the CPI was benign. Same with the Nasdaq bubble etc.
Unlike the RBNZ et al. I cannot "look through" inflations such as GST hikes, insurance Hkes, or rate hikes.
If anything is going to deflate at some stage, it will be consumer credit, so that is where deflation may possibly occur, consumption goods bought on credit, and the related businesses.
There is no overall trend, different things are reacting differently. As i see it the overall money supply is relatively static, but M1 and M2 are increasing.
Hang a bit steven, fatcat directors have scored bloated increases up to 20%...don't that count any? senior public servants are getting bonuses on top of their half million dollar salaries for doing a great job on the lower ranks to make the numbers fit...jeez Bill English pretty well blessed them all in the Zoo yesterday....
Even local body managers are wallowing in extra loot....look up Kapiti CEO and see...
Power insurance rates gas....all going up up up....
They never will because,
a) they have gambled on property and gold....right now I hear whinning on "its the Govn's fault gold hasnt risen so I can make a killing" etc etc...
b) Have a very simple view of economics, ie printing = inflation, they have no overall view....they cant see teh huge hole opened up by consumers stopping spending.....the printing in comparison is tiny
c) Follow right wing / libertarian politics and economics so are voodoo believers....They ignore Keynes and minsky.....
d) dont appreciate private debt as bad....and we are overloaded with it...
Its now heading for 4 years with core inflation at 2%.....and dis-inflation looks more probable....
banksters, yep....the debt has to be cleared, simple....the only way is haircuts/defaults and you can see that the Govn's are determined to force haircuts.....that means of course that investors wont be "buying" bonds in the future, the risk will be too high and they wont be able to re-insure via the cds markets because Govn's will change the rules/law to stop it.....so this is just can kicking....sooner or later the ECB etc will have to print en-mass......or there will be a default when no one buys.....
That will be a Depression and deflation as [consumer] economies will collapse.....its going to be very wierd......I think....
regards
Scarfie - absolutely. That is the one thing we can't safeguard, and it's why I bother making the effort here. Someone has to raise the awareness.
In our case, there would be so many in trouble before us, that I think the Authority would default before we would. At that stage, all bets are off anyway...
yep....I agree....(all of it).
and as you In my case I have a tiny mortgage ie fixed outgoings.....so if my rates quadrupled (from $150 a month to $600 say) I could just about cope (assuming I still had a job), lots of other ppl ie a decent % say 20%+ couldnt, even keeping their job(s).....So yes my "hope" is if it gets that rough so many go to the wall first that authority is swamped and dies long before they cast their eyes on me/us.
and hence why when OMG's asked why Im still here......because I care....and its also self-serving....we are a society/community, we all stand or we all fall....
regards
EVERY asset, yes....for me its a way to manipulate ppl to try and desperately avoid a Greater Depression. Playing this game and having inflation is a way to get you out of the safety of Cash and gambling in ponzi assets. Its a musical chairs situation and the micro-fast, high speed traders are the ones who will win, the Golman sach's of teh world....when it happens it wont be slow me thinks...."mom and pops" wont even have time to blink let alone fill their underwear at their losses.....
Lifestyle blocks rated from under you, yes....except the classic mistake ppl are making is thinking in terms of one or a few forced sales....same with selling your house....in a normal market prices stay up and the council can get and force a return.....default a lot of ppl however and prices collapse in a buyers market......
Then lifestyle blocks (and even ordianary homes) start to look like a Greek bond, why would a buyer want the grief of buying? unless its very, very cheap? so a round of can kicking by councils sending rates through the roof and all property becomes worthless, the council ends up owning it all...and they cant manage it or get a return.....meanwhile we are all on the dole/WINZ and it just has to collapse.....
So I can see why Govns are petrified of a true depression....I am....
regards
Say Greece Defaults, what will happen to value of gold in Greece if it leaves the EMU? If NZ defaulted what would happen to the value of gold? If the UK, US Japan etc, what would happen to value of gold? Expand that past gold, asses every asset, and discover what would happen to the value in the event of a default, then do the same with a pseudo default via money printing. If you find an asset that performs well in both scenarios, you have a "safe haven". I don't see cash savings being very safe in either a real default, where deposits are at risk, or a pseudo default, where money is devalued. There may or may not be a brief window where safe haven assets become briefly cheaper, but I wouldn't count on it, we'll know soon enough.
Lets get some things out of the way...for me,
a) Gold is useful to get your wealth through an [extreme] event, betting in it for long term gain is plain silly IMHO....
b) Herd stupidity....sure gold could go up as ppl rush into it in such an event as Greece defaulting.....that doesnt mean its the safest or best bet...see a) ie you have to sell it to realise the gains....hence a) as a strategy. Also Greece defaulting immediately effects ppl in NZ in terms of gold exactly how? So a NZer buys gold to protect his/her wealth because Greece defaults?, does this necessarily make sense? As a speculative play maybe...for a) is it the best bet? not sure...but it might be the lesser of evils.....ie your losses could be less than other assets, eg property (and I think property owners are going to be kicked into next week, uh, decade). Sure Greeks could buy gold, they could also buy USD, the point is the Dracma will be like Lira when Greece leaves the EU, ie worthless so using USD to buy back later makes as much sense....just as much as gold...all else being equal...
Expand, sure, you pls do the same, You are looking at inflation as inevitable and possibly high....same when you look at money printing, try expanding your view past money printing == inflation, so I need to buy gold mantra. It doesnt always, ie liquidity trap....and Keynes had that down pat in the 1930/40s......neo-classical and right wingers ignore this.....and neo-classical economics has us in this mess, so the chances of them getting us out are what? zero IMHO.
"in the event of a default" So credit will get expensive? yeah sure but no one will use it....they wont be able to afford it. This is my point, ppl take on credit when its cheap to make a profit if they cant make a profit they wont take on the debt.. Also consumers have huge debt that has been used to boost our economies/GDP.....for decades....make credit expensive and they cant purchase anything more.....and in fact purchase less....our economy then has to shrink on 2 counts, a) no 2 or 4% more debt to push/keep it up AND b) $ is lost to pay down the existing debt, a double whammy....thats a Depression and deflation event....
Real default and deposits, hence cash under the bed.....but if we see bank runs, by that stage it will be because the assets the banks have mortgages against are worth so much less that the bank(s) is insolvent....thats massive deflation.....already under way....say 12~24months into the 5 or 6 year drop....
"brief window where safe haven assets become briefly cheaper" actually I see the complete opposite, ppl will run to assets as they see bad times ahead so assets might go up a bit (maybe thats happening today as we speek/write in expensive/good property?).....Then they will see those assets collapse in value but they will be stuck in an illiquid situation.....also I think there are no safe haven assets at all....none, anywhere, period they have already been picked over, why do you think US treasuries are so popualr at an effective neg interest rate?
"we'll know soon enough." inflationistas have been saying inflation for 3+ years, hasnt happened....but yes I think we are very close to the end game, the drop. Coyoti is off the cliff edge and running on fresh air, the only Q is when does he look down at the very large fall.......
So after that? well the risk of cash under the bed is Govn's will want that, they have 1 way, tax it off you, force the cash out by changing the currency making it tangable and hence taxable....so then gold is good IMHO you hide it, illegal or course, immoral? no. not IMHO.....of course Govn's can then confiscate it.....property? well thats a tangible asset and can be taxed...its all very ugly at that point...anyway.
regards
Hey Steven, I have a couple of points I would like to pull you up on;
Firstly above, Gold, those that have invested in physical have done very well thank you, it has gone up every year compounding at a 20% rate with no counter party risk it is sitting just off its highs and trending up with no sign of stopping anytime soon. It is an inverse leverage play that governments will do the wrong thing by debasing their currencies and it has proven inflationists right so far, I don't hear anyone whinning its the governments fault they are the reason its going up!!!.
Secondly; you fail to address the point that to what ever degree deflation occurs governments can, and have proven the will, to just print the shortfall, deflation has a floor to which the market wont allow prices to fall below however in a debasement situation there is no ceiling they can print until they cant fit the zeros on the note then re-decilalise and keep going again.
Thirdly I seriously don't think you acknowledge the extent of the bailouts thus far, in a previous post you wrote
"...how much has the USGovn stimualated/printed so far? 700million?"
The USA have stimulated around $16 trillion since 2008, not 700 million, big difference between $700,000,000 and $16,000,000,000,000, The FED has debased its currency by a factor of over 22,000 times over your understanding!!!
I would love to know what your responce is to this, I have tried to pull you up on it before but I have recieved no responce.
Bankster, gold is a pure asset appreciation game, buy it at the right time, yes sure you profit....but how much of that gain is real value and how much is over-hyped speculation as too many ppl are in it? and its the same with any asset....and with any asset there is a downside...
Yes it needs to be physical IMHO, a paper IOU for gold is stupid with a capital S....
Where is the inflation? that the inflationaista have promised? 3 years and its not even in sight, core is 2%....CPI spiked and is now trending down, RBA is dropping the OCR....inflation is a non-event....so buying gold to protect against inflation is proving wrong......as a gamble/ponzi scheme however its obviously profitable...I suggest you put "this time its different" on your wall above your PC....
"As deflation occurs"...the point is the size of the hole, its huge, the printing of 700billion is a spoon into a bucket......and this also answers your last paragraph....700billion is the money pumped into the US economy....it wasnt enough then and the shortfall then isnt enough now....$16T is the fiddling of the Fed world wide and that money hasnt made it out into main street....net result, one huge hole.
So OK after three years where is the inflation? even if its not higher there should be at least signs of it rising, there is none.....in fact its the opposite....looks more like dis-inflation.
"the market" there is no market when everyone is selling.......the floor on assets looks to be an incredibly long way down....maybe as much as 90%, 50%+ at least....thats a huge wipe out of wealth...
The point I am trying to make is the deflatioanry forces are so over-welming that printing will be in-significant....so context...
Sure Govn's could print the shortfall in tax income....which is all they need to do....except thats a small % of GDP against consumer spend....its a relative and not an absolute game I dont see you considering...
<P>
"recieved no responce" I must have missed teh Q....
So in return answer, where is the inflation?
<P>
Be that as it may.....soon, certainly within 24 months as skudiv says I think we will see whos right....stand on your own 2 feet, place your bets and take the results....biggest thing is to understand and learn from whatever happens......only the truley stupid/blinkered/fanatical get burned repeatedly IMHO....
regards
- I am sure you don't really mean physical gold is a ponzi scheme.
- No one is saying prices are currently declining, I am sure they are in select areas of the economy but not as a whole. It is premature to say we are in a deflationary situation, we are in fact in an inflationary price situation (allbeit only 2%)
- Free market economists define deflation or inflation the old way, in terms of the money supply, ie wether it is deflating or inflating, rather than refering to the change in price of things as either inflation or inflation. The natural coinsiquence of the increase in money supply will eneviatably be rising prices. Of coarse this is never immediate, there is always a lag in time before (the effect in relation to pricing of goods and services) show up in the way peoples behavior changes. It's this behaviour that decides when prices shift and cannot be modeled or predicted as it, this is why you generally wont hear free market people predict time frames as this is like predicting peoples frame of mind and any number of external influences, close to impossable. However it will happen!!
- I agree that if deleveraging were allowed unhindered prices could fall reallly low, however I have a $100,000,000,000,000.00 note in my wallet from the zimbabwe centeral bank, the FED can just print one of these and the entire US deflation problem would be solved!
Oh look, we obviously simply do not see the same things in the same way, totally opposites in fact. You are an adult, make your own call, sate your case for and against by all means, but who are you trying to convince of being right? yourself? or a 3rd party?
"mean physical gold is a ponzi scheme." Then you are wrong, I suspect it is....some of it. When loony right wing talk show hosts are doing adverts selling gold on TV, then sorry I have to question if its a true value...
2%, the system is in-efficient, 2% is allowing for such losses is effectievly zero.....consider the large govn printing you mentioned.....for 3 years and yet we have only 2%? consider that when costs for councils are going up by 4~5% that some areas when the overall is only 2% must be -ve to compensate.....There are enough interesting stats saying taht to reduce un-employment we need growth of 3%+....those losing areas are the tradeable sector so they cant be employing ppl....
No one is saying, OK, but a) the entire reason to get into gold the gold bugs were telling us was inflation...its not there and the best taht can be seen is 2%.....So then I will say it on record, ....the future looks deflationary.....and Im acting accordingly...make your play....
"natural consequence", this is like saying "common sense" its crap frankly, its the argument of someone who cant justify their position. No this is simplistic economics and of one particular school, neo-classical...like I said its the tea spoon and the bucket.....what you have seen being printed has at best caused or delayed the deflation/depression....consider how big the spend is/was and how weak the result is. then consider that nations are saying that they will get or promise 4 to 5% growth to get them out of the deep debt doo doo........yeah right.
"rising prices" companies cant rise prices if consumers have no more money, not across the board. What we are looking at is at best robbing peter to pay paul with inefficieny of the transfer thrown in..the net result is very sour.
Predicting time frames on inflation, yet 3 years ago this was the case...the "wise" mppl were saying fix your mortgage because its going to get expensive!!!!! nope I stayed floating, Ive saved $1000s as a result.
"$100,000,000,000,000.00 note in my wallet from the zimbabwe" and the GFC are not the same thing...printing money is not production or GDP....
Lets agree on, you will buy gold/assets, I will buy nothing and hold cash....perfectly happy with my decision....I sleep well.
regards
I can see I am not going to change your mind, that is a certinty haha. However I am having a problem following your reasoning, seems to me there is a gap in your logic.
I get that you think I overstate the conection between increase in money supply and price inflation, but surely you must accept that increasing money supply at least plays a significant role in influencing prices right?
I mean if lets say a magic wand was waved and money all of a sudden duplicated, there was all of a sudden twice as much in everyones wallet and bank accounts. I would expect that soon enough nominal prices would double to meet the change in money supply but the real value of things would stay the same, would you not agree? To say they wouldn't is to say everyone just got richer which is plainly false?
I don't understand why you won't consider that money printing couldn't have the effect of offsetting any of the effects of deflation?
Merkozy financial farce...http://globaleconomicanalysis.blogspot.co.nz/
Read it and laugh...then ask yourself what the other piigs will think...what's ok for the Greeks is ok for us too.
and yet in the midst of this farce we still have media reports pointing to a recovery and growth in the EU...
Got to be the greatest bloody laugh ever.
The retroactive CAC will work for about 90% of GGB's written in Greek law, the other 10% are written in UK law and favour the creditors, these are the bonds held by "hold out hedge funds" and they will sue and get paid out in full plus interest. Portugal is the inverse of Greece, and has 90% of bonds in UK law, and 10% in Potugese law, what is working in Greece, will not work for the others. Also Portugese bonds carry a clause that prevents subordination, which means that the ECB will either have to take any haircut as well, or else Portugal cannot issue more debt. I forget what the term is, but the Greek case is very much unique compared to the rest, apparently Greece long ago saw the need to default, and acted accordingly.
They have had practice at defaulting.........which is quite funny really....the may yet beat the banksters....a bit anyway.
Its just can kicking....
UK law could get re-written btw....probably wont be...but the EU might try doing that "remotely".
If teh hedge funds sue in British courts and win, hwo do they collect? the greeks just say stuff you....
regards
#8 Lauren Lyster summed up a major problem in talking about her experience at Davos, about the attendees and the media
"....some are just so dazzled by the access and the rubbing of elbows with some of these people that it really makes you realise where the herd mentality and the obsession with the establishment comes from. And the desire for acceptance."
Think the media with politicians here and how few hard questions get asked of the government and Key in particular. No one wants to be labelled a trouble maker and face possible access restriction be it on TV or in the press gallery.
Think Key and other Prime Ministers not raising hard questions with Presidents or leaders of much bigger countries. Imagine not being asked back to the White House and being asked to "call me Barrick" because you had the temerity to criticise US trade or foreign policy.
My favourite quote is from Martin Luther King
“On some positions, cowardice asks the question, is it expedient? And then expedience comes along and asks the question, is it politic? Vanity asks the question, is it popular? Conscience asks the question, is it right?
There comes a time when one must take the position that is neither safe nor politic nor popular, but he must do it because conscience tells him it is right.”
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