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Everything posted by zugzwang

  1. $6-7 billion! Can Dimon survive a hit that big? This thing just gets better and better.
  2. The bond yield argument is utterly specious. By that metric Japan has just enjoyed two decades of uninterrupted success. Europe isn't screwed, at least not by Greece. The German economy is the most successful in the world. Can Greece be fixed at much lower cost to Germany than the alternative? Yes. Ergo, the likelihood of it being fixed is high. The US, UK and Japan, on the other hand, are far more problematic. The expectation that the printing presses can save them is quite unproven. The parallel that Krugman et al. draw with the Great Depression is fallacious, since it ignores the consequences of private sector debt in the economy (see Steve Keen). In 1929, US private sector debt to GDP peaked at 170%, this ratio fell continuously with the depression until 1946 when it bottomed at 35%. In 2008, US private sector debt to GDP peaked at 285%, this too moderated slightly to about 235% - but appears to be trending higher again in 2012. Over the same period the US govt created an additional ~$7 trillion of sovereign debt - yet economic activity has barely lifted. The private sector deleveraging holocaust consumed the lot. How much longer can the US continue to run annual deficits of >10% to generate <2% GDP growth? Three years, maybe four??
  3. Taleb is one of the good guys. One of the dozen or so analysts out of 30,000 worldwide who saw the Crash coming. Everything he says is worth hearing. Reading him gets you back to Mandelbrot and Ed Thorp, to that point in history (the late '60s) where Economics as profession becomes fully subverted by Wall Street. His appeal for the abolition of the Nobel Prize in Economics is practically a clarion call for freedom.
  4. Chote has it back to front. The EU may never recover from the systemic criminality of the City of London.
  5. Turn off your iPad, David Cameron! Not sure I agree with Fraser Nelson's conclusions entirely, but he does pick out a few home truths very effectively i.e. that the UK is arguably Europe's biggest basket-case, and that Osborne = Brown + added taxes & galloping inflation. http://www.telegraph...tains-debt.html No one dispenses advice to the eurozone better than David Cameron. His speech yesterday was a fountain of good sense and hard truth. Quite rightly, he said there's no point in any uncompetitive, debt-addicted country thinking it can just muddle along. Radical, structural reform is needed. He didn't say which of the many basket-case European economies he had in mind, but one sticks out. It is increasing its debt faster than anywhere else in Europe. It languishes behind even Pakistan and Nicaragua on the global regulation league tables. Its growth prospects have almost evaporated. How do you solve a problem like the United Kingdom? Two years in, and Mr Cameron seems no nearer to a solution. He is ambitious over welfare and schools, but on the economy he seems trapped inside a failed Brownite consensus. The Prime Minister does know what should be done, as we heard yesterday: radical reform, and accepting that you can't (as he puts it) "borrow your way out of a debt crisis". But his government is attempting to do precisely that, borrowing more over five years than Labour did over 13. Fairly soon, Mr Cameron will be fully aware of these depressing metrics. He has ordered a special app on his iPad that will give him a "management dashboard", with everything from dole figures to inflation. (One of his senior advisers says the PM spends "a crazy, scary amount of time playing Fruit Ninja on his iPad", so the new software will offer some respite.) It will be a digital horror show. His government is "dealing with the debt" in the same way that George Best dealt with the drink: bingeing on it. Ours has increased more than any eurozone member's. And still, as his iPad will soon tell him, the government envisages no economic improvement to speak of by 2015. Britain's deficit won't be abolished. It will still be there – indeed, it will be the largest in the Western world.
  6. Not necessarily. You might simply have been preparing for 'The Dinner Game'.
  7. More free time to update their Facebook profiles via their iPads. http://www.bloomberg...5-000-jobs.html Hewlett-Packard Co. (HPQ) is considering cutting as many as 25,000 jobs, or 8 percent of its workforce, to reduce costs and help the company contend with ebbing demand for computers and services, people briefed on the plans said. The number to be cut includes 10,000 to 15,000 from Hewlett-Packard's enterprise services group, which sells a range of information-technology services and has been beset by declining profitability, said these people, who asked not to be identified because the plans aren't final and may change. Meg Whitman, chief executive officer since September, is seeking to reverse the growth slump that led to the ouster of her predecessor, Leo Apotheker. The company's PC sales are dropping as consumers favor tablets, such as Apple Inc.'s iPad, and it has been slow to adapt to the shift toward cloud computing, away from the IT services Hewlett-Packard provides. Some of the cuts to Hewlett-Packard's workforce of 324,600 may come through early-retirement packages, the people said. Hewlett-Packard may offer early retirement to about several thousand people, the people said. Hewlett-Packard, the world's largest maker of personal computers and printers, is working with management consulting firm McKinsey & Co. Whitman, former CEO of EBay Inc., said in March that she'll combine the PC and printing divisions, ending deliberations to spin off the PC unit. She has also said she'll step up investment in research and development and take steps to shore up Hewlett-Packard's balance sheet.
  8. There aren't any queues forming outside Greek banks! Greece isn't the story, anyway. It's trivial to fix, if the Germans want it fixed. China's dollar shortage, however. That you should really be worried about.
  9. Only 30% of Greek bank deposits have disappeared since 2009. That's about €80bn, or £65bn. A trifling sum for an entity the size of the ECB to cover, especially when the other side of the trade is a guaranteed €500bn haircut, and counting. £65bn is about equal to the UK taxpayer's initial cash investment in RBS and Lloyds. Of course, that stake is a LOT smaller now too...
  10. No word on the scale of the subsidy from HMG. I doubt we'll ever be told the truth, but given that Govt Motors loses £1bn a year every year without fail in Europe, it must be considerable. They're also planning to add to Europe's overcapacity glut by shifting Chevrolet production from Korea, I guess the German govt is paying for that gift. Visionary. http://www.dailymail...lant-saved.html Vauxhall and its UK factory have been saved by a ground-breaking 'round the clock' flexibility deal that secures thousands of jobs – at the expense of the less competitive Germans. The Ellesmere Port factory in Cheshire is not only to survive the axe, but to thrive and expand thanks to a deal that will see a major jobs and production boost at the plant which builds the best-selling Astra hatchback. It means that after decades of uncertainty and living on a knife-edge, the long-term future of the plant has for the first time been assured. American bosses at Vauxhall's US parent company General Motors (GM) judged that British workers are more flexible, competitive and efficient - and less militant - than their counterparts in Germany, where a car factory is to be closed with the loss of thousands of jobs. 'The German unions will go bonkers,' said one source close to the deal. The new deal – to be announced officially on Thursday - was hailed on Wednesday as a victory for the thriving car industry in Britain which is enjoying its best performance for decades. The deal will not only save 2,100 jobs at the plant but lead to around 700 extra jobs, an extra third shift to ensure 24-hour a day running and, significantly, the introduction of weekend working to ensure the factory works 'at full capacity.'
  11. Empty threats. The Greeks have dynamite-strapped themselves too well. Make fast with the dosh, SuperMario.
  12. The UK is an a compound debt death spiral. A little bit behind Greece and Spain. A little bit ahead of Japan and the USA. Benny, Mervo and SuperMario need to co-ordinate printy, printy: An 'Operation Overlord' of fictitious capital creation against the beastly fiscal austerity of the Germans.
  13. Greek banks get another €18bn re-cap. Whew! For a second there I thought they might not. The news that the EU has given its blessing to the release of €18bn in recapitalization funds for Greeks banks has been met with relief all round in Athens. Greece's outgoing finance minister Filippos Sachinidis, attending last night's eurozone finance ministers' summit was told the long-awaited cash injection would be disbursed as early as today. And it is not as moment too late, say Greek officials and observers. "The banking system is in dire straits. This is very good news and shows that the EU is following through, it's acting on its promises and that in itself is an act of faith," Nikos Evangelatos, a prominent political commentator told radio listeners this morning. With all the talk of a Greek exit from the 17-nation euro zone panic-stricken depositors have been rushing to withdraw savings from banks. Since Friday last, an estimated €1bn has been withdrawn from banks according to deeply concerned finance ministry officials. Recapitalisation of the Greek banking system – badly hit by their enforced participation in the country's unprecedented debt restructuring – is a major part of the second €130bn package of rescue loans agreed for Greece earlier this year by the EU, ECB and IMF, its 'troika' of creditors.
  14. Foreign lenders now looking at a €422bn haircut on Greek debt! Looks like someone's going to have to borrow Mervo's custom keyboard. Global lenders face killer losses
  15. The FIRE (Finance, Insurance & Real Estate) lobby found out it didn't pay as well as a rigged market for everything.
  16. +1 There's only one thing the British hate more than the current govt and that's teh Europe, conditioned as they have been for a generation by the Tory-owned yellow press. A clear line of rhetoric is being developed to blame Europe for everything, Osborne was at it again this morning. By pre-empting a move by the Tory executive to take the UK out of Europe altogether, Balls is effectively spiking their guns. I still expect Cameron to plug on with an in/out referendum, however. So slender are his chances of re-election, an appeal to Britain's barely suppressed Imperial vanity looks like the only shot he's got left. Not sure the Scots will see things in quite the same way.
  17. As the Depression worsens they'll consume every penny in an effort to stay upright.
  18. Return to lender. Walk away, no pay. Let the criminal originators of Greece's debts eat the losses. Better to be poor and free than some bankster's chattel...
  19. To be fair, this is exactly what ZIRP is intended to achieve. Eleviate the debt-burden on mortgagors and redistribute it across the entire population working and retired.
  20. There is only one way out: Default and Print. The only question is when it happens, not if. The matter is entirely in the hands of the German political establishment, the principal obstruction being the folk-memory of hyperinflation among the German electorate. Do they throw Greece under the bus as a scare tactic to shock the German public out of its complacency, or not?
  21. http://www.youtube.com/watch?v=Xy0UBpagsu8
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