Monthly Archives: January 2016

You Can’t Argue With a Sick Mind …

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“We have experienced two general strikes in the past three weeks. This is the first time we have seen general strikes in Greece since Tsipras came to power in January. What is even stranger is that the strikes are being organized by Tsipras’s own party … Syriza, to protest its own government.  Few actual steps have been taken to implement the list of EU demands, except for raising the VAT to 23%, further strangling an economy that is on its last breath. The banks successfully completed a capital raise of €14.4 billion.  Now that the banks have raised their funds, they are finally [admitting] just how bad the NPL problem really is.”

http://www.huffingtonpost.com/david-c-wittig/you-cant-argue-with-a-sic_b_8891412.html

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European Central Bank sued by 200 investors over Greek debt deal

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“In a case which could pave the way for a raft of legal action from the private sector, a group of Italian retail investors are claiming damages in excess of €12m from the ECB for an alleged violation of its ‘equal’ creditor status during the biggest private sector debt restructuring in history in 2012.  During the episode, the ECB was able to ‘swap’ its holdings of Greek government debt for protected bonds with no repayment date. The move ensured the ECB did not suffer losses from the deal to stave off a Greek bankruptcy in March 2012.  Private sector creditors, however, were forced into accepting a 53.5pc ‘haircut’ on their holdings.”

http://www.telegraph.co.uk/finance/economics/11907490/European-Central-Bank-sued-by-200-investors-over-Greek-debt-deal.html

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Greece passes more spending cuts, tax hikes after third EU bailout

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“The approved budget makes 5.7 billion euros ($6.2 billion) in spending cuts and gathers 2 billion euros in higher taxes. The cuts include 1.8 billion euros from pensions and 500 million from defense.  There have been strikes by public and private workers over the austerity and restructuring reforms sought by the EU as part of the financial bailout aimed at keeping Greece in the eurozone.  Greece’s debt is forecast to grow to 327.6 billion euros or 188 percent of gross domestic product (GDP) from 180% in 2015. Tsipras, who came to power in January promising to defend Greeks from EU-imposed cuts and was then re-elected in September, described the budget’s passage as a ‘difficult exercise.'”

http://www.dw.com/en/greek-parliament-narrowly-approves-tough-budget-with-spending-cuts-and-tax-hikes/a-18897432

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Finland Should Never Have Joined Euro, Foreign Minister Says

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“With the northernmost euro member now set to become the bloc’s weakest economy, the question of currency regime continues to resurface as Finland looks for explanations for its lost competitiveness.  The comments come as a former foreign minister gathers signatures in an effort to force the government to hold a referendum on euro membership. While polls still show most Finns don’t want to go through the process of exiting the currency bloc, there are signs that a plurality of voters think they would be better off outside the euro. Finland will be the weakest EU economy by 2017, when it will grow at less than half the pace of Greece, according to the European Commission.”

http://www.bloomberg.com/news/articles/2015-12-22/finland-should-never-have-joined-euro-foreign-minister-says

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In Copenhagen, Apartment Prices Jump 60% After Rates Go Negative

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“Denmark’s biggest mortgage bank says there’s a ‘real risk’ Copenhagen is heading into a property bubble.  Property prices in Copenhagen have risen 40-60 percent since the middle of 2012, when the central bank first resorted to negative interest rates to defend the krone’s peg to the euro. The benchmark deposit rate has been minus 0.75 percent since February as Denmark’s currency war intensified, and most analysts surveyed by Bloomberg see negative rates lasting at least through 2017.  The Danish regulator this month warned Danske Bank against pursuing a growth strategy in Sweden as the housing market there shows signs of imbalances.”

http://www.bloomberg.com/news/articles/2015-10-21/60-house-price-surge-in-copenhagen-adds-to-bubble-drum-beat

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Norway to Start Withdrawals From Oil Fund to Plug Deficits

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“Norway predicts it will for the first time need to withdraw cash from its $820 billion sovereign wealth fund as western Europe’s biggest oil exporter uses a record chunk of its petroleum revenue to cover budget holes and stimulate the economy. Tapping the fund to cover budget needs comes at a time when the managers of the fund, set up to safeguard the wealth of future generations, warn that it also faces diminished returns amid record-low interest rates. The government said it will spend 4 billion kroner on a jobs plan and cut or hold income taxes for nine out of 10 people. It’s lowering the corporate tax rate to 25 percent from 27 percent and aims to cut it to 22 percent by 2018.”

http://www.bloomberg.com/news/articles/2015-10-06/norway-budget-proposes-boosting-oil-spending-by-14-nrk-says

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The Trouble With Sovereign-Wealth Funds

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“The world’s sovereign-wealth funds together have assets of $7.2 trillion, according to the Sovereign Wealth Fund Institute, which studies them. That is twice their size in 2007, and more than is managed by all the world’s hedge funds and private-equity funds combined, according to J.P. Morgan Asset Management. The number of funds tracked by the Institute of International Finance is up 44% to 79 since the end of 2007. Nearly 60% of sovereign-wealth-fund assets are in funds dependent on energy exports. Now, some funds are shrinking or are being tapped by governments as oil revenues fall. That is forcing them to borrow or sell investments, potentially pressuring global markets.”

http://www.wsj.com/articles/the-trouble-with-sovereign-wealth-funds-1450836278

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George Soros Sees Crisis in Global Markets That Echoes 2008

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“Soros has warned of a 2008-like catastrophe before. On a panel in Washington in September 2011, he said the Greece-born European debt crunch was ‘more serious than the crisis of 2008.’ Soros, whose hedge-fund firm gained about 20 percent a year on average from 1969 to 2011, has a net worth of about $27.3 billion, according to the Bloomberg Billionaires Index. He began his career in New York City in the 1950s and gained a reputation for his investing prowess in 1992 by netting $1 billion with a bet that the U.K. would be forced to devalue the pound.”

http://www.bloomberg.com/news/articles/2016-01-07/global-markets-at-the-beginning-of-a-crisis-george-soros-says

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The SEC Pulled the Plug on Stop-Loss Orders – What You Can Do About It

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“The policy, subject to U.S. Securities and Exchange Commission (SEC) rule filings, goes into effect on Feb. 16, 2016, so there’s plenty of time to prepare. Besides, GTC orders usually expire in 90 days, anyway. And of course the brokerages will continue to offer these types of orders. They’ll simply trigger in-house and then be sent as limit or market orders for execution.  But it is a very big deal. Partly for its effect on investors – though I’m going to show you how to get around it – but even more so for what the NYSE and its regulator, the SEC, are telegraphing with this decision: That they’re essentially washing their hands of what’s about to happen.”

http://moneymorning.com/2015/12/04/the-truth-behind-the-nyses-decision-to-end-stop-orders/

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Fed ends ‘too big to fail’ lending to collapsing banks, with caveats

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“The Fed’s new restrictions come from the Dodd-Frank Act of 2010, which brought in a wave of reforms after the financial crisis.  Under the new rule, banks that are going bankrupt — or appear to be going bankrupt — can no longer receive emergency funds from the Fed under any circumstances.  However, it’s important to note that the new rule allows the Fed to judge by its own measures whether a firm qualifies for its emergency aid.  The idea is the Fed can still lend to banks during times of emergency, but the bank must be able to pay it back. Yet the true health of a bank in turmoil can be very difficult to assess.”

http://money.cnn.com/2015/11/30/news/economy/fed-adopts-rule-to-end-too-big-to-fail/

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