Archive - Mar 2010

Yet more rape and pillaging of US taxpayers as Portugal now plans to join the long and exalted list of nearly bankrupt countries who wish to join the dollar devaluation bandwagon, and issue debt denominated in dollars. The P in PIIGS is in the same position as the US, needing to plug a massive budget deficit, so it has decided to do what the US does so well - issue bonds with a $ sign on them. Bloomberg reports: "Portugal is selling bonds in dollars for the first time since November as part of a plan to issue 25 percent more debt this year to fund its budget deficit. The nation is marketing $1 billion of five-year bonds that may be priced to yield about 100 basis points more than the benchmark mid-swap rate." And this is merely the beginning: as most European countries are convinced the pain in Spain is nothing compared to what Washington is about to experience, we expect to see many more deficit whores attempting to jump on the dollar collapse bandwagon.

The Greek saga continues, exactly as was anticipated. For all of those who don't regularly read me, this is really not about Greece but about the start of either default or significant depression throughout a large swath of the Eurozone. Greece is the firestarter and it looks as if we are starting to burn...

A smattering of the relevant headlines which are causing Greek spreads to widen as investors realize they have been lied to once again.

04:51 03/18 GREEK PM: GREECE WILL NOT DEFAULT
04:51 03/18 GREEK PM: NOT LOOKING FOR PARALLEL NATIONAL CURRENCY
04:50 03/18 GREEK PM: OFFER OF HELP ON TABLE WOULD HELP FIGHT SPECULATORS
04:50 03/18 GREEK PM: WOULD PREFER A EUROPEAN SOLUTION
04:49 03/18 GREEK PM: GREECE IS TALKING TO THE IMF
04:49 03/18 GREEK PM: MUST PURSUE REFORMS TO INCREASE COMPETITIVENESS
04:45 03/18 GREEK PM: IF NO SUCH PLAN IN PLACE, GREECE MAY NEED IMF HELP
04:44 03/18 GREEK PM: IMF-STYLE HELP COULD BE OFFERED ON "AD-HOC" BASIS
04:44 03/18 GREEK PM: EUROPE MUST BE PREPARED TO OFFER IMF-STYLE HELP
04:43 03/18 GREEK PM: GREEK NOT IN NEED OF IMF LOAN
04:32 03/18 GREEK 10-YR SPREADS WIDEN 6 BPS TO +306 BPS AS GREEK PM SPEAKS
05:40 03/18 GREECE PM:IMF SAYS OUR PLAN QUALIFIES US FOR IMF AID IF NEEDED

• Bernanke urges to let the Fed keep all of its banking oversight.
• BoJ's loan program may resound more with Government than economy.
• Brazil central bank leaves key rate at 8.75%.
• China conducts stress tests to gauge impact on industry of end to yuan peg.
• Euro weakens and Greek stocks and bonds fall due to bailout plan.
• Gov't bank regulators got big bonuses despite missing warnings signs of crisis.
• Greek PM Papandreou says austerity program not sustainable due to high borrowing costs.

Sometimes I have to actually read articles twice, because it really seems that I have somehow missed the point the first time around. Well, on my third glance at this Bloomberg article, I still don't get it: SLM Sells Debt at Higher Interest Rate Than Students Pay

RANsquawk 18th March Morning Briefing - Stocks, Bonds, FX etc.

After a decade in the penalty box, is the son of the Dotcom Bubble returning? The industry represents the last, best hope that America has for competing globally. Tech companies are among the few that make things foreigners want to buy. Foreign stocks wearing cowboy hats and pearl snap buttoned shirts There will be product shortages and much higher prices in any recovery. (CSCO), (JNPR), (JDSU), (SNDK), (MU), (ASML).

We comb through today's key Q&A by Ron Paul, Brad Sherman, Spencer Bacchus and Scott Garrett to find all the relevant instances in which Ben Bernanke either a) pleads the fifth, b) provides reasons to doubt his sanity, c) confuses what monetary policy is all about (not to mention cause and effect), d) forces Zero Hedge to send an Econ 101 textbook to the Marriner Eccles building c/o Ben Shalom Bernanke, or, e) lies outright.

One of the world's largest pension funds is suing Bank of America for more than $90m over its 2008 takeover of Merrill Lynch, claiming the banking giant failed to disclose the full extent of losses at the US investment bank. It's about time pensions got tough, but is it too little, too late?

A lot of people theorize or blog about the future of media. However, a handful of people actually walk the walk. One such person is Larry Kramer.

Larry spent 20 years as a reporter and editor at the San Francisco Examiner, the Washington Post, and the Times of Trenton. However, during the tech boom in the 90s, Larry seized the opportunity to become a successful media entrepreneur when he founded MarketWatch and managed the company as Chairman and CEO.

What is $50 billion between a couple of psychopaths? It's basically “a drop in the ocean” according to Max Abelson's account of how the Repo 105 fiasco is seen by the other side. Several ex-Lehman bankers speak off the record in "The repo men's new Lehman shrug" and confirm that not only is Wall Street terminally deluded in its own self-importance, but that basically everyone in finance is a megalomaniac, with no sense of relative worth, or any worth, for that matter, unless it goes straight into their back pocket. “I’m like, whatever" says London managing director #1, when asked what his reaction to the Repo 105 disclosure is. So when is it not "whatever?" $500 billion? $500 trillion? In its pursuit of finding ever more complex ways of defrauding the middle class silly (without the latter even being aware its share of net global wealth is about to decline from 1% to half that), Wall Street's bankers have passed the clinical psychopathology barrier, and will stop at nothing to destroy the wealth of everyone else not only with impunity, but with a smirk and a smile. Now that's net worth change you can believe in.

I recently provided evidence that banks create credit out of thin air.I've just found two more pieces of evidence ...

Seek and ye shall find. Never has this been more true than combing through theStreet's (much delayed if at all available) financials. As investors may have been digging through the company's SEC reports to find out just what the financial website's unadjusted EBITDA is (hint: much, much less than its "adjusted" cousin), one stumbles upon this gem just filed in today's Form 12B-25:

As a result of the need for the Company and its independent registered public accounting firm to focus attention on matters related to the Company's previously-announced review of the accounting in its former Promotions.com subsidiary, which subsidiary the Company sold in December 2009 -- including matters related to the preparation and filing by the Company in February 2010 of a Form 10-K/A for the year ended December 31, 2008, a Form 10-Q/A for the quarter ended March 31, 2009 and Forms 10-Q for the quarters ended June 30, 2009 and September 30, 2009, respectively, and matters related to an investigation commenced by Securities and Exchange Commission in March 2010 -- the Company requires additional time  to prepare its financial statements, assess its internal controls and file its Form 10-K for the year ended December 31, 2009 ("2009 Form 10-K"). 

Oops. We can't wait to see how Mr. Cramer will explain to the Mad Money faithful this particular twist on the hangover of the show's five year birthday bash. Also, we wonder if CNBC will finally cancel the ludicrous Jim "truth" Cramer campaign once this news breaks. We doubt it- in the quest for evaporating eyeballs, all is fair.

Germany is openly saying what we all really know, Greece is probably !@#!$%. The problem is, how can Greece go down without pulling half the Euro zone with it? The Greek tragedy saga is much worse than the mainstream media is making it out to be. Reference my annotation on today's Bloomberg article...

Another day, another meltup. Regional banks on a meltup, junker community banks getting squeezed, REITs and retail stocks up like 20 days in a row, fueled by the Perpetual Motion "Wash, Rinse, Repeat" machine.