The New Year and Financial Crises

Believe it or not, despite the Eurozone crisis, most countries sovereign credit risk fares better at the end of 2010 vs. 2009
The funny thing is that most people wouldn't believe the premises of the story that in the diourse of the last year, risk has fallen dramaally. Well, it is true considering where we were at the end of 2009 we thought that the world was going to end. When it didn't the market breathed a sigh of relief. Via Moody's: The “man-bites-dog” story of 2010 is that global sovereign credit risk actually generally improved in 2010, even in Europe, where the Sovereign Debt crisis intensified and ...

EU may shift bank failure costs: official
By John O'Donnell Brussels | Tue Jan 4, 2011 11:58am EST Brussels (Reuters) - The European Union's executive will propose rules this week that could force those that lend to troubled banks to shoulder more of the cost of winding them up, a senior EU official said on Tuesday. The proposal to pass the pain of a bank's failure on to bondholders is one of a series of measures designed to cope with lenders in difficulty. It could be law in Europe by 2012. Officials hope it will guard against a rep...

EU may shift bank failure costs: official
By John O'Donnell Brussels (Reuters) - The European Union's executive will propose rules this week that could force those that lend to troubled banks to shoulder more of the cost of winding them up, a senior EU official said on Tuesday. The... Brussels (Reuters) - The European Union's executive will propose rules this week that could force those that lend to troubled banks to shoulder more of the cost of winding them up, a senior EU official said on Tuesday. The proposal to pass the pain of a b...

Crisis In Euroland
The euro, that artificial Funny Money used by 331 million Europeans in17 nations -- the 17th, Estonia, joined the euro just this week -- was conceived in sin and born in Corruption. The New Year brings the prospect that the sins of the European Union's Founding Fathers will be visited on its hapless citizens in the form of financial turmoil and fiscal pain. The original sins at the euro's conception included stealth, lies, and hypocrisy. That at least was consistent with the creation of "Europe"...

The Problem With Entitlement
Ready for some scary numbers? According to AARP (the organization which lobbied so aggressively on behalf of ObamaCare), 7,000 Baby Boomers will become Medicare beneficiaries in 2011 … each day. That’s a total of 2.5 million new beneficiaries … part of an impending onrush that not only threatens the solvency of the program but the fiscal  U.S. government itself. By 2030, an estimated 80 million Americans will be enrolled in Medicare, up from 47 million today. Meanwhile, en...

Estonia gets cool welcome from a eurozone in crisis
It is a sign of how tough 2010 has been for Europe that the talk is not of the country joining the club but of those that might no longer be members by the end of 2011. A break-up of the single currency is still thought unlikely, but 12 months ago so too was the idea that both Greece and Ireland would need to call in the International Monetary Fund to help them through their Sovereign Debt crises. The past two months have been marked by daily reports of rising bond yields, Debt downgrades from t...

As National Debt Obama Ran Up Tops $14 TRILLION (with a T), Obamas Architect of Economic Disaster Whines About Debt Limit
Well, look, it pains me that we would even be talking about this. This is not a game. You know, the Debt ceiling is not something to toy with. If we hit the Debt ceiling, that’s essentially defaulting on our obligations, which is totally unprecedented in American history. The impact on The Economy would be catastrophic. That would be a worse financial economic crisis than anything we saw in 2008. No doubt defaulting on U.S. obligations would be bad, but Goolsbee’s missing the point. ...

Will The Default Of A Vietnamese State-Owned Company Be The Black Swan Of 2011?
Email Sent! You have successfully emailed the post. Vinashin, Vietnam's national shipping company, just missed a Debt payment, according to The Guardian. This may not seem like a Big Deal at first. Vinashin is owned by the state, so it's unlikely to have a direct impact on a lot of investor's portfolios. But if it was to need a Bailout, the cost would be big. Vinashin has $4.4 billion in debt, which is equivalent to 5% of Vietnam's GDP in 2009, according to The Guardian. Sounds like another eme...

Why Won't Republicans Attack Texas For Their Financial Crisis? Because It Doesn't Fit The Narrative.
Via TPM, a good question: When we hear about states in Financial Crisis, how come the Republicans never mention Texas? But there's one state, which is fairly high up on the list of troubled states that nobody is talking about, and there's a reason for it. The state is Texas. This month the state's part-time legislature goes back into session, and the state is starting at potentially a $25 billion Deficit on a two-year Budget of around $95 billion. That's enormous. And there's not much fat to cut...

Greece to build wall on Turkish border
Young immigrants at a detention centre in Filakio on the Greek-Turkish border. Photo: AP Brussels: Greece has announced plans to build a wall along its 206-kilometre land border with Turkey to keep out Illegal Immigrants. Christos Papoutsis, a Greek Interior Minister, insisted the wall was necessary after Brussels intervened last year to prevent an Immigration crisis by sending an elite taskforce of border guards to protect the frontier between Greece and Turkey, the European Union's most insecu...

Greece to build fence to stop migrants
ATHENS, Greece, Jan. 4 (UPI) -- Greece aims to build an 8-mile border fence and boost its Coast Guard to stem illegal Immigration via neighboring Turkey. Greece's Public Order Minister Christos Papoutsis, who announced the plan Monday, said it was necessary after more than 100,000 people entered Greece illegally in 2010. "This is the hard reality and we have an obligation to the Greek citizens to deal with it," Papoutsis said in a statement. "Greek society has exceeded its limit in its capacity ...

Muni Investors Beware: America Is Full Of Chowchilla, Calif. Death Traps (MUN)
Email Sent! You have successfully emailed the post. Andrew Haigney is Managing Director of El CAP, a Registered Investment Advisor in the state of Vermont that provides investment-consulting services to individual investors, corporations, foundations, trustees, and endowments. Just prior to the full onset of the Financial Crisis, my wife and I left our jobs and put our belongings into storage and with our two toddlers embarked on a 12-month trip around the United States in a converted tour bus...

The Highs and Lows of 2010
Get alerts when there is a new article that might interest you. If you have a moment—that is, once you've caught up on emails and firmed up those resolutions—I recommend perusing Dave Barry's year in review in the Washington Post Magazine. You'll laugh, you'll cry, all at the same time. Every poll shows that the major concerns of the American People are federal spending, the exploding Deficit, and—above all—jobs. Jobs, jobs, jobs: This is what the public is worried about....

How The Random Walk Become A Not So Random Climb, And How To Know When The Climb Is Ending
Now, the histogram for April 2009 thru 2010: The most relevant observation is the lack of symmetry in the daily returns since April 2009. In the prior decades, the bars immediately to the right and left of the mode (and on out the distribution) are nearly identical in size giving a VERY symmetrical distribution. Since April 2009, each pair of bars as you work away from the mode show a clear skew toward the more positive return than the less positive counterpart. Another observation is that the ...

China set to bailout Spain with a massive purchase of sovereign debt
China goes on its Bailout tour and expresses confidence in Spain's ability to recover from its economic crisis. Beijing will buy Spanish public Debt despite market fears of an Irish-style bailout. They may get their hands burned, but if not, they will profit handsomely by buying Debt on fire sale as other investors panic. China has also bought some of Portugal's debt, but steered clear of Ireland and Greece. The comments by Vice Premier Li Keqiang were made in an op-ed piece in Spain's leading...

easyJet buys 15 Airbus A320 planes
No-frills airline EasyJet on Tuesday said it had agreed to buy 15 Airbus A320 single-aisle planes worth 1.1 billion US dollars (824 million Euros) and secured an option to buy another 33. It added that "whilst the total list price for the 15 new A320 Aircraft should be approximately 1.1 billion US dollars... EasyJet has been granted substantial confidential price concessions" from European planemaker Airbus. "We are pleased to announce this agreement with Airbus," EasyJet chief executive Carolyn...

easyJet buys 15 Airbus A320 planes
British no-frills airline EasyJet on Tuesday said it had agreed to buy 15 Airbus A320 single-aisle planes worth 1.1 billion dollars (824 million Euros) and secured an option to buy another 33. It added that "whilst the total list price for the 15 new A320 Aircraft should be approximately 1.1 billion dollars... EasyJet has been granted substantial confidential price concessions" from European planemaker Airbus. "We are pleased to announce this agreement with Airbus," EasyJet chief executive Car...

easyJet buys 15 Airbus A320 planes
British no-frills airline EasyJet on Tuesday said it had agreed to buy 15 Airbus A320 single-aisle planes worth 1.1 billion US dollars (824 million Euros) and secured an option to buy another 33. It added that "whilst the total list price for the 15 new A320 Aircraft should be approximately 1.1 billion US dollars... EasyJet has been granted substantial confidential price concessions" from European planemaker Airbus. "We are pleased to announce this agreement with Airbus," EasyJet chief executive...

Britain's FTSE leads stock markets higher
LONDON (AP) - The FTSE 100 index of leading British shares outperformed its peers Tuesday, leading European shares higher as traders played catch-up following a belated New Year return. Oil company BP PLC made sizable gains following reports that rival Royal Dutch Shell considered a bid for a company when it was mired in its Gulf of Mexico woes last year. Stock Markets have started 2011 buoyantly in the wake of a run of upbeat economic data from around the globe. In Europe, Germany's DAX was ...

On Fat and Inflation
The thin line on the left is the cost for under-weights, as I pointed out, they cost more on average then the over-weights. Notice that the average costs between “normal” and “overweight” is really not that big a deal. Finally, the graph clearly shows that Obesity has a real cost attached to it. The following chart puts some numbers to the graph. Again, the evidence connecting Obesity to Health Problems is clear. Notice that the average estimate from the CBO on all categ...

China provinces spurn Beijing, target sizzling growth
By Zhou Xin and Simon Rabinovitch Beijing | Tue Jan 4, 2011 3:24am EST Beijing (Reuters) - Chinese provinces, from northeastern Heilongjiang to southwestern Yunnan, have set ambitious growth targets for this year and into the future, challenging the central government's goal of reshaping The Economy along more sustainable lines. Growth-obsessed local officials regularly chafe under -- and often flout -- Beijing's reform directives, but the latest flare-up of tension comes at a particularly se...

Market Commentary From Russ Certo On Complacency, "Year End Illiquidity In The New Year" And Risk Correlation
This is not hate for Goldman, but elucidation & clarification regarding exactly what business Goldman, et. al. are actually in & how they generate the profits that they do off of their Client's Backs! Many think that Goldman is the best and brightest on the Street. Those guys went to the same schools, studied under the same teachers, graduated and employed using the same strategies trading the same products as everybody else. Get over the mysticism marketing bullshit. View your shopping cart. Al...

Counterparties
Long Beach wants to be bike-friendly. Yet its cops still hand out $400 fines for having an unregistered bicycle — LAT What a rising Stock Market does: the govt might conceivably end up making a profit on its GMAC Bailout — NYT Now that Twitter has replaced RSS, the next step is for RSS to replace Twitter — Scripting Hitchens, it turns out, sometimes drinks non-alcoholic beverages — Slate It was COLD out! Thank you, Olek, for knitting such a beautiful coat for the Wall St...

Dynamic government, mutating law
It's ultimately a fool's game to put any trust in a government program because the law, especially when created and enforced by an interventionist government, is necessarily dynamic. That means that you can't count on the rules which presently influence your decisions remaining static since the rulemakers will change them any time they believe it will benefit them to do so: People’s Retirement Savings are a convenient source of revenue for governments that don’t want to reduce spending or ...

AIG gets alternative proposal for Taiwan unit
By Faith Hung Taipei | Tue Jan 4, 2011 1:16am EST Taipei (Reuters) - American International Group's (AIG.N) protracted sale of its Taiwan unit took another twist on Tuesday when a local firm proposed jointly running the unit with the bailed-out insurer instead of a sale that AIG has been pushing for. AIG has been trying to sell the unit, Nan Shan Life, since October 2009 as it looks to pay back the U.S. government for its Bailout. It drew four bidders in a first round in December, with report...