Frontrunning: January 6

• ECB Board member Juergen Stark says buck stops here, EU will not bail out Greece "The markets are deluding themselves when they think at a
  certain point the other member states will put their hands on
  their wallets to save Greece", comments whack euro (Bloomberg, FT)
• In the meantime, Greece, its head stuck deep up its...sand, says bailout not needed contrary to every indication to the opposite (Bloomberg)
• Iceland, and Iceman Mishkin, also thought so once, now country promises it won't default either, Dubai deja vu (Bloomberg)
• If Fed missed this bubble, will it see a new one (NYT)
• The rats are fleeing the global excess liquidity titanic en masse: first Dodd, now Japan Finance Minister - Naoto Kan named new fin minister (Bloomberg)
• Report from the "move your money" front (HuffPo and IRR)
• Recession over? Not unless we make a major shift (WaPo)
• Interview: Bill Gross sees 2010 as year of reckoning (Time)
• Gordon Brown faces secret ballot (Reuters)
• Hershey board divided over Cadbury bid (Bloomberg)
• To foretell the future, think like a banker (Silver Bear Cafe, h/t LK Lam)
• Silicon Valley bloodbath leaves buildings empty (Bloomberg)
• Banks take revenge for new consumer rules (LA Times)
• How visa, using card fees, dominates a market (NYT)
• Take your financial job and shove it: former head of analytics at one of leading Slovak financial firms finds a new passion (Absolutideas)

Comments

[Anonymous]

The Irish finance minister has just announced that he has pancreatic cancer - and that he's staying in the job!

[Leo Kolivakis]

Here is what one senior pension fund manager sent me on Greece (comments are not his):

Greece - The Odyssey Begins - Greece vs other credits.

Lovers of ancient Greek mythology will be all too familiar with the
Iliad and the Odyssey. I have had a recent refresher course as my
younger son has just started reading the former but it set me thinking
about Greece in a broader context and the journey it must make to put
itself on an even fiscal keel. Whether it ever makes it back to Ithaca
is open to question, after all as a nation Greece hardly has a history
of stable politics. Nevertheless I can't help wondering if we have all
got a little carried away in the short term.

Looking at global sovereign CDS certainly suggests that.

The current level of 5yr Greece is 280bp for BBB+

Below are other credits, their rating and current CDS.

Egypt    BB+  241bp
Lebanon  B-   277bp
Columbia BB+  134bp
Estonia  BBB+ 191bp
Hungary  BBB  236bp
Kazahstan BBB- 212bp
Indonesia BB  190bp
Panama   BB+  127bp
Peru     BBB- 116bp
South Africa BBB+ 139bp
Turkey   BB+  175bp
Phillipines BB 166bp
Romania  BB+  277bp
Russia   BBB  175bp
Vietnam  BB-  233bp
Mexico   BBB  125bp

This little list certainly raises my eyebrows with many of the above
countries suffering from the various handicaps of endemic crime, the
lack of political freedom or the proper rule of law, to name but a few
issues. Hmmmm.

At the very least it adds to the idea that EM is getting into bubble
territory but it does also suggest that the relative pessimism towards
Greece is somewhat overdone.

[Anton LaVey]

One couterpoint to the Euro/Greece hoopla: http://seekingalpha.com/article/179524-europe-s-weaknesses-grossly-exagg...

Here is the relevant money quote, so to speak:

Given that the U.S.'s fiscal catastrophe is far more severe than that experienced by Europe (either by comparing individual states, or collectively), this begs the question: why has this flimsy propaganda campaign been so successful?

The answer is obvious: EU officials are extremely grateful for this U.S. hatchet-job. Only a few weeks ago, with the U.S. dollar in free-fall, with nothing to prevent a further steep decline, and the euro already trading at $1.50US, leaders in the EU were frantically searching for some means to weaken their currency.

At the same time, the U.S. government was equally desperate in attempting to stop the dollar's collapse. The result: a lie “made in heaven”.

I think this explains a lot -- and it seems pretty much in line with my own analysis -- but I am still very worried about the TBTF European banks and their debt-to-capital ratios that way up there in the stratosphere.

If the U.S.A. fall into the debt trap, my opinion is that Europe cannot be far behind.

[Anonymous]

Anyone else see this?

TrimTabs says overnight that their data indicates that companies, retail investors, hedge/mutual/pension funds, etc, do not have enough buying power to boost the stock market…..TrimTabs thinks the only explanation is that the Fed and/or Treasury are buying stock futures to boost prices.

[Scooby Dooby Doo]

Ocean cargo/global logistics: Shippers may face higher rates in 2010 as space gets tight

"capacity management has become the key to restoring the industry to profitability in 2010".

The active capacity of the world’s leading ocean cargo carriers dropped by 2.4 percent over the last 12 months, most ships being mothballed or used for floating storage.

http://www.logisticsmgmt.com/article/442535-Ocean_cargo_global_logistics...

[Anonymous]

greece does not need a bailout and it will not need a bailout at least for the next 5 years.the reason why bloomberg,ft and the rest are busting our (greek)balls is that we are clearly in an unsustainable situation and the eu officials don't believe we are going to do anything about it unless they find a way to scare us.they would love to send us to the imf which will try to force reform measures because the eu can't.unfortunately for them the markets are still willing to lend money to greece with or without the eu implicit guarantee.if the markets were really convinced that the eu won't back us up the 10year bond would probably yield 7 or 8% which would still be ok i guess for 2 or 3 years.after that greece will have to default or cut on the huge number of public servants(maybe both).the thing is that you look cool if you tell your readers that a small country that 95% of them cannot find on the map,is going to be bailed out.but even if that country defaults you can't possibly know because you know nothing about it(tax base,debt composition etc.)of course you can keep on writing about a greece default everyday for the next 5 years and when it happens you can say "i told you so"(rubini) but that won't make you or those idiots at bloomberg an expert on the subject.
p.s.i wasn't trying to defend greece,no one but us is responsible for the situation we are into.

[Anonymous]

gets interesting after 2 minute mark

Kudlow vs Huffington

http://tinyurl.com/yhg3l5r

[-273]

Saudi Aramco, the world’s largest state owned oil producer, raised the official selling prices for lower sulfur, or “light” oil grades to be exported to US customers in February.

Saudi Aramco also raised prices for all crude types to be shipped to Europe next month and lowered prices for crude oil varieties sent to refiners in Asia, the Dhahran based company said in an emailed statement.

http://www.arabianbusiness.com/577955-saudi-arabia-increases-light-oil-p...