Frontrunning: March 31

Tyler Durden's picture
  • Former Bernanke colleage and co-author Vince Reinhart: "Geithner and
    Bernanke Are Wrong about Fed Power. Letting the Federal Reserve keep a
    hand in bank supervision and regulation is a mistake.
    "  (The American) Please read : Monetary Policy Alternatives at the Zero Bound: An Empirical Assessment Author(s): Ben
    S. Bernanke, Vincent R. Reinhart, Brian P. Sack Source: Brookings
    Papers on Economic Activity, Vol. 2004, No. 2 (2004), pp. 1-78
    in which the authors (among whom is Brian Sack, head of the Fed's
    trading desk) recall the golden days of Roosevelt's dollar devaluation,
    and hint at what's to come for the US currency
  • The Greek ex-Goldman guy who just blew up the 12 Year fly by is now preparing to issue $16 billion in dollar denominated bonds by early May. Ah yes, nobody can see behind the ruse of issuing bonds in the world's worst currency. Brilliant. Here's the funny part - Tim Geithner plans to issue $16 trillion denominated in Greek Drachma (Bloomberg)
  • Emerging market currencies show short-term cracks (Reuters)
  • Gartmore may face withdrawals after investigation (Bloomberg, Telegraph)
  • Steve Forbes: "President Obama and Speaker Nancy Pelosi rammed ObamaCare through the House by unprecedented parliamentary trickery, bribery and deceit." (Forbes)
  • Obama to permit oil exploration off Virigina coast (Reuters)
  • Bill Clinton's $20 million break up with Ron Burkle (Daily Beast)
  • iPad sales anyone's guess as analysts skip estimates (Bloomberg)
  • Macarthur coal rejects Peabody's $3 billion bid (Reuters)
  • Fraud on the street: Where on earth has the SEC been (Robert Reich)
  • Natural gas ETF flaming out versus oil (Fundmastery)
  • Man plunges to death from 66th floor of Empire State Building (WSJ)
  • The case for higher real rates (Morgan Stanley)
  • Rahn: Learning from Switzerland (Washington Times)

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ED's picture

Yo! Eat your heart out, Steve!

Jim in MN's picture

Gaa-ROO-ga (klaxon noise or something)....

(BRUSSELS) - The EU's competition watchdog opened an in-depth probe Wednesday into Irish state aid to the Anglo Irish Bank, and the restructuring plan for the lender.

The announcement came as the European Commission, the top Brussels anti-trust watchdog, authorised emergency recapitalisation of 10.44 billion euros (14.05 billion dollars) for the bank for a six-month period, recognising that a capital injection was necessary.

EU Competition Commissioner Joaquin Almunia said "there is no doubt" the bank, one of Ireland's biggest, needs "significant recapitalisation to meet their obligations."

However "Anglo Irish Bank has to restructure profoundly in a way that effectively tackles the weaknesses of the past business model and ensures a sustainable future without continued state support," he added, explaining why the probe is deemed necessary.

M.B. Drapier's picture

Probably no biggie. The Commission has already approved the bailout, now the Competition Authority just wants to micromanage it a bit. Apparently they're worried that Anglo is going to be outcompeting privately-owned banks as some sort of subsidised national champion, but I think there's little risk of that: all the public money's going into the black hole of debt repayments. If they wanted to find lack of competition in Irish banking, they'd be better looking at how the government is allowing the cartel of banks in Ireland to replenish itself through extortionate lending rates. There's little chance that the government would allow Anglo or anything else to disturb its precious darlings' recovery.

In fairness, the Competition Authority's influence on the Irish banking bailouts seems to have been pretty helpful in general. It doesn't want governments giving free money to private firms, which has really helped to stymie the Irish government's Plan A of bailing out the banks while leaving them privately owned and run by the same bozos. In particular, the NAMA payments would probably have been a much bigger snowjob without their intervention. 

Alexandra Hamilton's picture

Argentina is one step ahead it seems. They are going to use the reserves of their central bank (BCRA) to pay foreign government debt.

Could (and should) Greece learn from them?


Popo's picture

Bad Link?


Is the "Case for Higher Real Rates" link correct?  I get "Venezuela: A Hard Currency Tipping Point?"

-273's picture

Obama is to open up drilling to reduce U.S. dependence on foreign oil?

They say there MAY be 130 million barrels in Virginia. That comes in at a day and a half of global supply or 5 days of US demand if it is all recoverable.

Guess they are getting desperate.

Declining energy availability means that the accumulated worldwide debt held by governments, businesses and individuals will never be repaid. “Stutters” in the financial system like the one that occurred in 2008 (which not coincidentally occurred at the height of a global oil shock) will keep occurring until bailouts lose their effectiveness and people lose confidence in the current system. 

The connection between declining energy and the financial system is almost always overlooked, which has allowed people to mistakenly think that alternative energy sources will smoothly make up for declining fossil energy.

Jim in MN's picture

Obama's trying to make a deal on pricing carbon, using moves on oil production and nuclear power.  There is no illusion that this additional drilling (baby, drilling) will actually help anything of substance.  Nor that the nuclear loan pledges will.  It's just politics.  They do, however, hope that pricing carbon and the green jobs/energy efficiency strategies are 'real'.  But that is in line with the main political agenda: bringing 'wins' on health care, energy/climate, and some cloudy area of economic security (financial sector reform, the stimulus, etc.).  The calculation is that this seals reelection in 2012.  They are likely correct barring a(nother) total economic dislocation, which anyone reading this site knows could happen any time.

Grand macro visions, as you note, are not in the mix in DC.

Jim B's picture

Agree, it is just a game.  It's a ploy to get moron's like Lindsey Graham to support Cap and Tax

caconhma's picture

May be, just may be I am NOT bright but I cannot understand how someone in his/her sound mind would buy Greek bonds with maturities longer than 6 months.

Can somebody help me?

Alexandra Hamilton's picture

Government bonds from Greece, Ireland, Sweden and
Portugal appear as attractive purchase opportunities.

But I think they recommend short term (interest rate risk).


nedwardkelly's picture

"rammed ObamaCare through the House by unprecedented parliamentary trickery, bribery and deceit"

More partisan bullshit. Was it voted on? Yes. Did it get enough votes? Yes. Apparently that's how the system is supposed to work.

I say the system is completely broken, but rather than trying to fix the system most commentators are busy pointing the finger at 'the other side'.

If it was 'rammed through' and we don't like it when things get rammed through, then why don't we talk about changes to the system to stop things being rammed through?

If it was facilitated by trickery, bribery and deceit, why don't we talk about changes to the system to stop trickery, bribery and deceit?

Could it be that both parties are perfectly happy with a system that 'works' the way the current one does?

Bob's picture

Good question.  And we've got Forbes, Great Business Leader, who faithfully made the MSM rounds during the "height of the crisis" late 2008 omniciently championing Mark To Myth as the solution. 

That seems to have worked well. 

ewmayer's picture


Agreed that the "lies and deceit" is the proverbial pot calling the metaphorical kettle black, since the GOP used the same kinds of parliamentary-procedures tricks when they had the majority and it suioted them ... however, it appears to be beyond dispute that the CBO numbers used to support passage were bogus:


The CBO’s rules make it hard for the group to fulfill its own mandate. You’d think, for example, that the CBO would use its own parameters when it crunches numbers. Instead, the CBO must use the same mathematical assumptions supplied by the very lawmakers who wrote the bill the group is evaluating. No matter how improbable those formulas are.

Former CBO director Douglas Holtz-Eakin, writing in the New York Times, described the group’s process as “fantasy in, fantasy out.”


Mr Lennon Hendrix's picture

Max Keiser is telling us something!!!!!  Virtual Currentseas here we come!!!!!!

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