The Occupy Wall Street protesters are without a leader. Not so much in the sense the media has been trumpeting, the lack of a cohesive message within the ranks of anti-war, pro-choice, millionaire-hating and anything-green-loving activists. Instead, this gang of disgruntled citizens is without a presidential hopeful to rally behind against the onslaught of Perrys, Romneys and now Cains.
This protest is more to scold those perched on Capital Hill, than it is about humbling the one percent that live behind its tax-credit walls. Instead of going directly after President Barack Obama, since there is no viable alternative candidate, the protesters are taking aim at his political Achilles’ heel: big money.
Probably close to a majority of those marching voted Obama into office. Deafened by the chants of “Yes we can!” no one really understood what kind of change to expect, other than having the first African-American president. Maybe, that was enough. Whereas Obama was able to put down one demon (OBL), another one popped up in the form of global sovereign debt. The tangled web of collateralized debt and bad loans unraveled a bit only to get wound back up in the global sovereign debt crisis that is taking down countries such as Greece, Portugal, Spain and Italy. The can is kicking back in the form of recession and mounting unemployment.
This protest is more about broken promises than broken bank accounts. But, instead of going after political reform like the Tea Party, the masses decided to camp out in city parks. Maybe something, or someone, will come out of this soup of cardboard signs and angst to lead this wayward crowd in one direction…towards the next election.
Friday, October 14, 2011
Friday, October 7, 2011
'Till Death Do Us Part?
Whose name is behind Google?
In the same breath that people mourn the loss of Apple's great leader, Steve Jobs, many are speculating as to the future, or demise, of his revolutionary company. Will Apple ever be as great? Will Jobs’ mortality overshadow Apple's mythical reach?
I question the foresight, or ego, behind building a company around one man. Jobs was a marketing phenomenon, but he didn’t see it as a problem that when he sneezed Apple’s shares dipped.
Gone are the days of the magician. When Jobs last walked on stage in his blue jeans and black turtleneck, we were putty in his hands. This week, when Jobs' successor, Tim Cook, walked onto the stage, he was putty in ours, molding himself to what consumers needed to keep up the cultish allure of the iPhone. Granted, Jobs didn't leave his legacy without a pipeline of iProducts to come. But, every decision Cook makes will be followed with a "What would Jobs have done….?"
The past has proven the downfall of empires built on iconic CEOs. Post-Bill Gates Microsoft has remained steady after Gates stepped down, but is struggling to keep up with the competition, namely the Mac. Disney, on the other hand, was never the same after the death (or cryogenic freezing) of its creative genius. And with both of those examples, if asked who succeeded them, well, I'd need to Google the answers.
Will Apple's story be a lesson to the Mark Zuckerbergs of the world whose popularity, or notoriety, is the momentum behind the products? Maybe its better to take a step behind the product, instead of in front?
To answer my own question, there is little doubt that Google will stand by itself, without co-founders Larry Page and Sergey Brin.
In the same breath that people mourn the loss of Apple's great leader, Steve Jobs, many are speculating as to the future, or demise, of his revolutionary company. Will Apple ever be as great? Will Jobs’ mortality overshadow Apple's mythical reach?
I question the foresight, or ego, behind building a company around one man. Jobs was a marketing phenomenon, but he didn’t see it as a problem that when he sneezed Apple’s shares dipped.
Gone are the days of the magician. When Jobs last walked on stage in his blue jeans and black turtleneck, we were putty in his hands. This week, when Jobs' successor, Tim Cook, walked onto the stage, he was putty in ours, molding himself to what consumers needed to keep up the cultish allure of the iPhone. Granted, Jobs didn't leave his legacy without a pipeline of iProducts to come. But, every decision Cook makes will be followed with a "What would Jobs have done….?"
The past has proven the downfall of empires built on iconic CEOs. Post-Bill Gates Microsoft has remained steady after Gates stepped down, but is struggling to keep up with the competition, namely the Mac. Disney, on the other hand, was never the same after the death (or cryogenic freezing) of its creative genius. And with both of those examples, if asked who succeeded them, well, I'd need to Google the answers.
Will Apple's story be a lesson to the Mark Zuckerbergs of the world whose popularity, or notoriety, is the momentum behind the products? Maybe its better to take a step behind the product, instead of in front?
To answer my own question, there is little doubt that Google will stand by itself, without co-founders Larry Page and Sergey Brin.
Saturday, August 27, 2011
The Calm Before The Storm
The earth shook this week. For some, on the east coast, there was a 5.8 tremble. I didn't feel it because, like always, I missed the party for being upstate. For others, the tectonic shift was Steve Jobs resignation and/or Libya's Ghadafi firing....literally, even his traveling tent went up in smoke, poof! For me, it was seeing that my portfolio is actually in the green for once.
The markets ended the week happy as we await the next big natural disaster to hit our coast, Hurricane Irene. On one international business news web site, the top economic stories included the weather forecast and Burger King adding a new sandwich, the California Whopper. It’ll be interesting to see what kind of impact, if any, Irene will have on the markets come Monday. Disasters in the past, such as Japan’s earthquake and the tornadoes in the Midwest, have effected the markets only because of what those specific regions produced. Japan slowed down manufacturing and the Midwest bit into commodities. There may be a slight reactionary slip in the Dow, the workplace may close for a day and the MTA is taking off, but what does New York City really have to lose, as Wall Street prepares to work from home over the next few days.
The impending drama of a hurricane is giving investors a needed break to focus on, well, life. There has been little mention of global meltdowns, kicking cans or soft patches. Other than the Fed peeping out of his hole to tease the markets with the possibility of further action, and the IMF keeping the focus on banks, we’re all just taking in the calm before the storm.
The markets ended the week happy as we await the next big natural disaster to hit our coast, Hurricane Irene. On one international business news web site, the top economic stories included the weather forecast and Burger King adding a new sandwich, the California Whopper. It’ll be interesting to see what kind of impact, if any, Irene will have on the markets come Monday. Disasters in the past, such as Japan’s earthquake and the tornadoes in the Midwest, have effected the markets only because of what those specific regions produced. Japan slowed down manufacturing and the Midwest bit into commodities. There may be a slight reactionary slip in the Dow, the workplace may close for a day and the MTA is taking off, but what does New York City really have to lose, as Wall Street prepares to work from home over the next few days.
The impending drama of a hurricane is giving investors a needed break to focus on, well, life. There has been little mention of global meltdowns, kicking cans or soft patches. Other than the Fed peeping out of his hole to tease the markets with the possibility of further action, and the IMF keeping the focus on banks, we’re all just taking in the calm before the storm.
Friday, August 19, 2011
Gold Digger
Women in India, collectively, hold more gold than the U.S. Federal Reserve, is what the World Gold Council’s Managing Director for Investment said on CNBC a couple of days ago. Of course, he meant to say the U.S. Treasury, but that's beside the point. Gold has been hitting record highs as of late. Even Venezuelan President Hugo Chavez is running for the pot at the end of the rainbow. He's said to be looking to nationalize his country's reserves. People buy gold for mainly two reasons: fashion and fear.
There has even been chatter about going back to the gold standard in order to solve the global debt crisis. The U.S. is the largest holder of physical gold, outside of the typical Indian household. We dropped the gold standard – dollar to gold – several decades ago out of fear that foreign holders of our currency would cash in for the metal and bankrupt the nation. Today, our biggest fear is that China will cash in their bonds and send us right down the river. It seems that we may be working our way to a debt standard.
So, why don't we bounce back to gold standard? Instead of holding and buying debt, banks would be dealing with something a bit more tangible than an IOU slip. First, we have to understand that gold does not have any intrinsic value, it's price is based on market sentiment. Gold is priced to how we feel. It's like a mood ring of sorts. Going back to the gold standard now would mean having to bring up the value of gold, which has been kept at artificially low levels even in the face of inflation. This would sink the dollar while making foreign reserves more viable. It's the us or them scenario.
On an individual level, Indian women may have the answer stockpiling their matching gold sets in their closets and banks vaults. While the gold necklace does make that sari look fetch, it also loosens the economic noose we have around our necks.
There has even been chatter about going back to the gold standard in order to solve the global debt crisis. The U.S. is the largest holder of physical gold, outside of the typical Indian household. We dropped the gold standard – dollar to gold – several decades ago out of fear that foreign holders of our currency would cash in for the metal and bankrupt the nation. Today, our biggest fear is that China will cash in their bonds and send us right down the river. It seems that we may be working our way to a debt standard.
So, why don't we bounce back to gold standard? Instead of holding and buying debt, banks would be dealing with something a bit more tangible than an IOU slip. First, we have to understand that gold does not have any intrinsic value, it's price is based on market sentiment. Gold is priced to how we feel. It's like a mood ring of sorts. Going back to the gold standard now would mean having to bring up the value of gold, which has been kept at artificially low levels even in the face of inflation. This would sink the dollar while making foreign reserves more viable. It's the us or them scenario.
On an individual level, Indian women may have the answer stockpiling their matching gold sets in their closets and banks vaults. While the gold necklace does make that sari look fetch, it also loosens the economic noose we have around our necks.
Wednesday, August 10, 2011
Finance & Famine
Two different shortages of capital: bank reserves in Europe and water in Somalia.
For countries like Italy and Portugal, the catastrophe is man made. The situation is dire in that it's symptomatic of a global economic meltdown. We've come to realize how thin a wire our governments our walking when creating the illusion of fiscal responsibility. Whats at stake are jobs, houses, livelihoods. One slip could derail the rollercoaster ride our markets are currently riding.
In Somalia, the drought, and subsequent famine is natural, though a case can be made for it being our fault too. The capital is water and crops. There will be no bailouts or restructuring. Nations will not hold emergency meetings and presidents will not address the situation from their podiums. It's not the first time whole villages have starved, nor will it be the last. The loss will be in the thousands, not trillions; lives, not budgets. But, in the end, Somalia will subsist. The tragedy will be a headline buried with the bodies of so many.
Please help Somalia by contributing either through the link below or one of your own choice.
http://www.irusa.org/
For countries like Italy and Portugal, the catastrophe is man made. The situation is dire in that it's symptomatic of a global economic meltdown. We've come to realize how thin a wire our governments our walking when creating the illusion of fiscal responsibility. Whats at stake are jobs, houses, livelihoods. One slip could derail the rollercoaster ride our markets are currently riding.
In Somalia, the drought, and subsequent famine is natural, though a case can be made for it being our fault too. The capital is water and crops. There will be no bailouts or restructuring. Nations will not hold emergency meetings and presidents will not address the situation from their podiums. It's not the first time whole villages have starved, nor will it be the last. The loss will be in the thousands, not trillions; lives, not budgets. But, in the end, Somalia will subsist. The tragedy will be a headline buried with the bodies of so many.
Please help Somalia by contributing either through the link below or one of your own choice.
http://www.irusa.org/
Monday, August 8, 2011
On the one hand, we have the analysts, economists and editorials downgrading Standard and Poor's ability to rate anything above a used car. And on the other, investors are fleeing, and I don't use that term lightly, the stock market and sinking their reserves into the very thing that S&P is downgrading, bonds. So, it's pretty safe to say that today's market plunge is less about the downgrade and more about skiddish market sentiment running amuck on a possible recession.
When S&P released the downgrade announcement on Friday, everyone must have rolled their eyes and continued their already frantic pace selling off stocks. That's how I pictured the scene. S&P's downgrade was expected, with Fitch and Moody's rating agencies still holding on to their cheerleader status on US debt. The chatter today is saying the downgrade is more a rip on U.S. politics, than the government's ability to pay.
S&P's exact words were, "The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy"
Someone remind me, where exactly do the ratings agency fall in the whole check and balance scheme that we learned about in 8th grade social studies?
Regardless, the inevitable blame game ensues. Politicians point their fingers at each other and then at the rating agencies. Not that's its not deserved. The agencies' biggest sin to date is supporting the mortgages-backed-debt that pushed this economy off the ledge. So why are they still determining what's worth buying? And why are we still listening? If not them, than who will we listen to? China?
Next time, we're hopping back over the pond with France's possible downgrade on the horizon. Merci.
When S&P released the downgrade announcement on Friday, everyone must have rolled their eyes and continued their already frantic pace selling off stocks. That's how I pictured the scene. S&P's downgrade was expected, with Fitch and Moody's rating agencies still holding on to their cheerleader status on US debt. The chatter today is saying the downgrade is more a rip on U.S. politics, than the government's ability to pay.
S&P's exact words were, "The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy"
Someone remind me, where exactly do the ratings agency fall in the whole check and balance scheme that we learned about in 8th grade social studies?
Regardless, the inevitable blame game ensues. Politicians point their fingers at each other and then at the rating agencies. Not that's its not deserved. The agencies' biggest sin to date is supporting the mortgages-backed-debt that pushed this economy off the ledge. So why are they still determining what's worth buying? And why are we still listening? If not them, than who will we listen to? China?
Next time, we're hopping back over the pond with France's possible downgrade on the horizon. Merci.
Sunday, August 7, 2011
Four Walls and a Ceiling
Apartment hunting is a little bit like dealing with a trillion dollar deficit. One has to prioritize.
Can I afford to lift my rent ceiling in order to live close to work in an apartment where i don't trip over the heating plate in order to use the bathroom. I'd have to cut spending, live without internet, cable and eating out. I won't be saving much, but I'd enjoy my space.
Or should I try to save money this year? It would mean a much smaller space, but in the longterm, money saved means more space to maneuver next year. I could even splurge on Internet. But, the claustrophobia now would limit my desire to stay home. I'd be miserable. The lack of a decent kitchen means I'm eating out more. So, am I really saving?
My apartment search and the U.S. debt crisis ended in the same way. It came down to the wire, but we decided to raise the ceiling. As a county, we save by spending. This is the cost of living the 'baller' life.
Next week....downgrades and market volatility.
Welcome back!!!
Can I afford to lift my rent ceiling in order to live close to work in an apartment where i don't trip over the heating plate in order to use the bathroom. I'd have to cut spending, live without internet, cable and eating out. I won't be saving much, but I'd enjoy my space.
Or should I try to save money this year? It would mean a much smaller space, but in the longterm, money saved means more space to maneuver next year. I could even splurge on Internet. But, the claustrophobia now would limit my desire to stay home. I'd be miserable. The lack of a decent kitchen means I'm eating out more. So, am I really saving?
My apartment search and the U.S. debt crisis ended in the same way. It came down to the wire, but we decided to raise the ceiling. As a county, we save by spending. This is the cost of living the 'baller' life.
Next week....downgrades and market volatility.
Welcome back!!!
Sunday, July 24, 2011
Norway
****posts will at time deviate from the financial theme.
*******this is a rough post, and will be edited later today. Forgive the errors and such.
He's not one of us. He's one of you. For some Muslims, the capture of the Norwegian bomber/ mass murder was a relief. He was not some Jihadist fundamentalist, but a Christian. For others, it was a point of vindication.
After 9/11, Muslims sought refuge in the actions of Timothy McVeigh, the Oklahoma City bomber. He was the Christian counterpart of Osama bin Laden. Islam wasn't to blame for the actions of few crazed fundamentalists. There are bad apples in every religion. But, that defense never took hold in the light of such a horrific and cold-blooded act of killing as was infiltrated on NYC and Washington DC.
On Friday, a man set of a car bomb in front of federal building, and then went on a killing spree at a youth leadership camp. In the days to come, as more details are relieved to his motive, we will again have that familiar discussion. Why doesn't the media use the term Christian terrorist?
However, those thoughts must be quieted now as the world morns the loss of innocents. And as we, again, are reminded about how religion, in the hands of zealots, becomes a weapon of mass destruction.
*******this is a rough post, and will be edited later today. Forgive the errors and such.
He's not one of us. He's one of you. For some Muslims, the capture of the Norwegian bomber/ mass murder was a relief. He was not some Jihadist fundamentalist, but a Christian. For others, it was a point of vindication.
After 9/11, Muslims sought refuge in the actions of Timothy McVeigh, the Oklahoma City bomber. He was the Christian counterpart of Osama bin Laden. Islam wasn't to blame for the actions of few crazed fundamentalists. There are bad apples in every religion. But, that defense never took hold in the light of such a horrific and cold-blooded act of killing as was infiltrated on NYC and Washington DC.
On Friday, a man set of a car bomb in front of federal building, and then went on a killing spree at a youth leadership camp. In the days to come, as more details are relieved to his motive, we will again have that familiar discussion. Why doesn't the media use the term Christian terrorist?
However, those thoughts must be quieted now as the world morns the loss of innocents. And as we, again, are reminded about how religion, in the hands of zealots, becomes a weapon of mass destruction.
Friday, July 15, 2011
Budgets
Haven't written for awhile. I've been preoccupied with finding a home for myself for next month. Yes, it's time for what was, until now, an annual migration. I've been at my current apartment for more than a year, a landmark event. Now, I have two weeks left to find an apartment. This week, that search hit a low after my roommate broke up with me. Rating agencies would definitely downgrade my ability to find a decent 1 br on my budget.
Talking about downgrades. S&P is warning of downgrading U.S. debt this month, not waiting until Aug 2, the deadline on increasing the debt ceiling cap. It's like the ratings agency is scolding the children up in the white house to stop bickering and start learning how to share. They need to come a decision on debt ceiling, and make a move towards a balanced budget.
If, I could only think like our government, I'd be living the baller life in some amazing Brooklyn apartment without a worry and paying my rent with my AmEx card.
Also, this week is the start of earnings season. This is when, for the next weeks, publicly trading companies such as GM and Apple, will send out quarterly reports on how much money they made, or didnt make. At my job, which shall remain nameless, we're told to only work on stories regarding the really big companies. The standard is sorta vague, based on how well-known the company is, to how much revenue. When I first started at this job, a few years ago, if the revenue was in the $100 millions, that was considered big enough. Today we're talking about billions. Not just one billion, that kinda small, but several billion. Citigroup, the biggest earnings story of the morning reported increased profits of a little over $3 billion, with revenue, which slipped, of around $16 billion.
That's all I have kids, back to craigslist.
Talking about downgrades. S&P is warning of downgrading U.S. debt this month, not waiting until Aug 2, the deadline on increasing the debt ceiling cap. It's like the ratings agency is scolding the children up in the white house to stop bickering and start learning how to share. They need to come a decision on debt ceiling, and make a move towards a balanced budget.
If, I could only think like our government, I'd be living the baller life in some amazing Brooklyn apartment without a worry and paying my rent with my AmEx card.
Also, this week is the start of earnings season. This is when, for the next weeks, publicly trading companies such as GM and Apple, will send out quarterly reports on how much money they made, or didnt make. At my job, which shall remain nameless, we're told to only work on stories regarding the really big companies. The standard is sorta vague, based on how well-known the company is, to how much revenue. When I first started at this job, a few years ago, if the revenue was in the $100 millions, that was considered big enough. Today we're talking about billions. Not just one billion, that kinda small, but several billion. Citigroup, the biggest earnings story of the morning reported increased profits of a little over $3 billion, with revenue, which slipped, of around $16 billion.
That's all I have kids, back to craigslist.
Thursday, July 7, 2011
Wanted to share my friend's explanation on ratings agencies
S&P and Moody's access the ability of borrowers' capabilities to pay back to the investors - that is how they rate the countries and companies - if they rated Portugal bonds as junk - it only means that after analyzing the counties deficits, inflation, revenues, potential investment, growth rates, they believe that it is highly possible that Portuguese government might not be able to pay the face value and the coupons for the bonds issued - this makes the yields* on the bonds go real high - investors consider junk bonds very risky investments and hence demand higher returns for the risks they take.
S&P and Moody's access the ability of borrowers' capabilities to pay back to the investors - that is how they rate the countries and companies - if they rated Portugal bonds as junk - it only means that after analyzing the counties deficits, inflation, revenues, potential investment, growth rates, they believe that it is highly possible that Portuguese government might not be able to pay the face value and the coupons for the bonds issued - this makes the yields* on the bonds go real high - investors consider junk bonds very risky investments and hence demand higher returns for the risks they take.
As apposed to the AAA bonds, the returns are not high as the risk involved is also not high - so, the initial price an investor pays is inversely proportional to the yields.
Having said that - yes, rating agencies create a speculation in the market - both equities and fixed income - as the ratings drive the yields* and the stock prices. Although for me, they warn the investors who otherwise would consider an investment a less risk/high risk - helps them diversify their portfolios...
My question: Buying unsafe debt because of a higher yield* means you are purchasing a debt that you know will not get paid back. So who ends up taking the fall?
*Yields are interest or dividends, the income on your return. The riskier the bet, the bigger the return.
My question: Buying unsafe debt because of a higher yield* means you are purchasing a debt that you know will not get paid back. So who ends up taking the fall?
*Yields are interest or dividends, the income on your return. The riskier the bet, the bigger the return.
Tuesday, July 5, 2011
Mean Girls
I should've published yesterday's post, because it prefaces what's going on today. It's all about the rating agencies...and also Ireland and Portugal are back stepping into crisis quicksand. First, a little bit about the rating agencies, as I rejigger yesterday's post.
Moody's and Standard & Poors are rating agencies. These agencies forecast the future. They are the so-called prophets of profit, upgrading and downgrading corporations and countries on scale from AAA (not the auto club) to junk (very literal). When a rating agency downgrades, investors get scared and pull their money. When they upgrade, investors jump in balls first. So, it's sort of what comes first, chicken or egg. Do the agencies accelerate the downfall, and what if they make a mistake?
Moody's downgraded Portugal debt/bonds to junk yesterday- old news. This scared investors into thinking twice before buying. Now Europeans are thinking maybe its not a good idea to depend so heavily on this agencies. In theory, they are supposed to be the safety guard. In reality, dad they done their job correctly a few years ago, by predicting, as is their purpose, the mortgage meltdown, we may not be in this situation. Good or bad, these agencies are the little voices that whisper into the ears of the money movers as they throw the dice.
I don't want to give the impression that Greece is the only bad apple in the bunch. There are a lot of compromised Granny Smiths. Countries experiencing similar issues are Iceland, Ireland, Spain and Portugal. Not to mention our own little deficit problem here on this side of the Atlantic. The Greeks are just most recent, and the most dramatic.
Ireland: Already working its bailout, is asking for a cost reduction.
Portugal: Able to sell its debt/bonds despite downgrade.
Greece: Creditor banks are meeting today on a plan to ease Greece into its reform, this includes a debt rollover.
France: AAA rating is in jeopardy if it doesn't meet its budget deficit leve.
US: Pres. Obama, the eternal optimist, is seeing a light at the end of the deficit negotiations tunnel. Deadline to increase the deficit cap is Aug. 2.
Tomorrow, I promise, less Greece, more anything else.
Moody's and Standard & Poors are rating agencies. These agencies forecast the future. They are the so-called prophets of profit, upgrading and downgrading corporations and countries on scale from AAA (not the auto club) to junk (very literal). When a rating agency downgrades, investors get scared and pull their money. When they upgrade, investors jump in balls first. So, it's sort of what comes first, chicken or egg. Do the agencies accelerate the downfall, and what if they make a mistake?
Moody's downgraded Portugal debt/bonds to junk yesterday- old news. This scared investors into thinking twice before buying. Now Europeans are thinking maybe its not a good idea to depend so heavily on this agencies. In theory, they are supposed to be the safety guard. In reality, dad they done their job correctly a few years ago, by predicting, as is their purpose, the mortgage meltdown, we may not be in this situation. Good or bad, these agencies are the little voices that whisper into the ears of the money movers as they throw the dice.
I don't want to give the impression that Greece is the only bad apple in the bunch. There are a lot of compromised Granny Smiths. Countries experiencing similar issues are Iceland, Ireland, Spain and Portugal. Not to mention our own little deficit problem here on this side of the Atlantic. The Greeks are just most recent, and the most dramatic.
Ireland: Already working its bailout, is asking for a cost reduction.
Portugal: Able to sell its debt/bonds despite downgrade.
Greece: Creditor banks are meeting today on a plan to ease Greece into its reform, this includes a debt rollover.
France: AAA rating is in jeopardy if it doesn't meet its budget deficit leve.
US: Pres. Obama, the eternal optimist, is seeing a light at the end of the deficit negotiations tunnel. Deadline to increase the deficit cap is Aug. 2.
Tomorrow, I promise, less Greece, more anything else.
Friday, July 1, 2011
A Man, A Maid and A Hotel Room
It's funny how France, a country hell-bent on liberating Muslim women from their headscarves and their oppressors, is now backing a man who has been accused of attacking multiple women. They've not only set this misogynistic former head of the IMF (aka the great seducer) free, but saying he should be the leader of their country. Seriously.
Former IMF managing director, Dominique Strauss-Kahn, was accused in May of attacking a maid in a NYC hotel. You remember the IMF, they are pretty much heading the talks about the Greece bailout. DSK was a major player in those talks and now everyone is calling foul. He lost his position, which, ironically, has been filled by a French woman. Yes, DSK, the entire female contingency is out to get you. The defense says the woman in the middle is not credible for the following reasons: A) she lied on her political asylum papers saying she was raped in Africa B) she knows an alleged drug dealer C) there was a large amount of money added to her bank account.
The judge did not throw the case out of court, but did release DSK. He was on house arrest previously. Her lawyer says she came forth with this evidence earlier on in the case, and that there is a lot of physical evidence to show she was attacked.
Where is Greece in all of this? No more protests. The people have pretty much accepted their fate and it looks like the vote for the bailout is going to come through. The Euro zone has pushed up its meeting to Saturday from Sunday to vote on the bailout. I may be home for Fourth of July.
Just want to clear up one thing. What they are voting on this weekend, is the next tranche of the first bailout. Tranches are portions of a loan. Each tranche (let's say there are five) is given out once certain requirements (reforms) are fulfilled. They will also be discussing the second bailout at the meeting, after voting on what I believe is the last tranche of the first bailout.
Former IMF managing director, Dominique Strauss-Kahn, was accused in May of attacking a maid in a NYC hotel. You remember the IMF, they are pretty much heading the talks about the Greece bailout. DSK was a major player in those talks and now everyone is calling foul. He lost his position, which, ironically, has been filled by a French woman. Yes, DSK, the entire female contingency is out to get you. The defense says the woman in the middle is not credible for the following reasons: A) she lied on her political asylum papers saying she was raped in Africa B) she knows an alleged drug dealer C) there was a large amount of money added to her bank account.
The judge did not throw the case out of court, but did release DSK. He was on house arrest previously. Her lawyer says she came forth with this evidence earlier on in the case, and that there is a lot of physical evidence to show she was attacked.
Where is Greece in all of this? No more protests. The people have pretty much accepted their fate and it looks like the vote for the bailout is going to come through. The Euro zone has pushed up its meeting to Saturday from Sunday to vote on the bailout. I may be home for Fourth of July.
Just want to clear up one thing. What they are voting on this weekend, is the next tranche of the first bailout. Tranches are portions of a loan. Each tranche (let's say there are five) is given out once certain requirements (reforms) are fulfilled. They will also be discussing the second bailout at the meeting, after voting on what I believe is the last tranche of the first bailout.
Wednesday, June 29, 2011
Just a Stone's Throw Away
Greece's parliament passed its austerity plan. People were not so happy, but hell did not break loose either. Though the CNBC reporter decided to do her reporting while wearing safety gases and a gas mask, instead of, well, just going inside.
This Greece situation is a never ending saga. The politicians will continue to throw their verbal fictions and the police their tear gas canisters, and hopefully not stand downwind. The protesters were breaking up stairs and sidewalks because there is a shortage of common sense and stones. It was a typical hissy fit by the public. I understand why they are angry, but I don't understand the need to break into a store and steal a table lamp.
Let's move on to something new, a bit more closer to home, our own inability to balance the national budget. Ma, you're very good at this, writing down expenses and when a check is written. Our government, not so good.
The debt-ceiling, amount the gov is allowed to borrow, is a little over $14 trillion. And here we are wagging our finger at the silly Europeans. We hit that cap back in May. Now, they are looking to raise that cap, as if its not high enough. The Republicans won't budge unless they get cuts on Social Security and Medicare. The next vote will be Aug. 2, start of Ramadan. No one really know what will happen if they can't come to an agreement. If they do raise the ceiling, their all's-good answer is to basically just keep paying the interest back to the borrowers. How much interest does $14 trillion accrue?
http://money.cnn.com/2011/05/16/news/economy/debt_ceiling_deadline/index.htm
This Greece situation is a never ending saga. The politicians will continue to throw their verbal fictions and the police their tear gas canisters, and hopefully not stand downwind. The protesters were breaking up stairs and sidewalks because there is a shortage of common sense and stones. It was a typical hissy fit by the public. I understand why they are angry, but I don't understand the need to break into a store and steal a table lamp.
Let's move on to something new, a bit more closer to home, our own inability to balance the national budget. Ma, you're very good at this, writing down expenses and when a check is written. Our government, not so good.
The debt-ceiling, amount the gov is allowed to borrow, is a little over $14 trillion. And here we are wagging our finger at the silly Europeans. We hit that cap back in May. Now, they are looking to raise that cap, as if its not high enough. The Republicans won't budge unless they get cuts on Social Security and Medicare. The next vote will be Aug. 2, start of Ramadan. No one really know what will happen if they can't come to an agreement. If they do raise the ceiling, their all's-good answer is to basically just keep paying the interest back to the borrowers. How much interest does $14 trillion accrue?
http://money.cnn.com/2011/05/16/news/economy/debt_ceiling_deadline/index.htm
Tuesday, June 28, 2011
The "Can" is About to Hit the Fan
So, Ma, I might be working this Fourth of July. Apparently, on July 3rd, Good Ol' Greece may be going up in flames after the euro zone votes on its second bailout package. I was told, if Greece implodes, I'll be coming in to cover the fireworks.
Tomorrow, Greece's parliament is voting on its austerity package which includes a tax hike, pay freeze for the public sector and fuel price hike. Jobs will be lost and business will close down. But, that will happen regardless, even if the lawmakers fail to pass the bill. The Greeks are between a rock and a hard place....no pun attended to all the stone-throwers that are representing on the streets of Greece.
Reporters love their adages. This new one "kick the can down the road' was coined for the purpose of showing how inevitable all of this was. That's another thing reporters love, hindsight and tsk, tsk, tsk-ing. I visualize a boy in overalls, chewing on some hay, kicking an empty soup can down a dirt road. The 'can' being referred to is Greece's debt. The boy, I'm assuming, is Greece and/or all orgs and govs, who saw this coming and continued to ignore.
The news today showed the protesting in the streets of Greece, rocks against the tear gas. I really do empathize with the Greeks. Life is about to take a turn for the worst. The people, like all of us, trusted their government to protect their way of life. What happens when the governments fail. When parents fail, we throw a tantrum. But, eventually we forgive and move on because we're stuck with our parents. When a government fails, the people riot. It's not like they are going to be handed a clean slate, a do over. The only option on the table is reform, and the heads that will roll will not just be the politicians.
Good news. I made cod last night. Broiled the fish, added whatever spices I had on hand..which included garlic powder. It came out pretty good. I didn't get sick. Good times.
http://news.bbc.co.uk/2/hi/europe/8494849.stm
Tomorrow, Greece's parliament is voting on its austerity package which includes a tax hike, pay freeze for the public sector and fuel price hike. Jobs will be lost and business will close down. But, that will happen regardless, even if the lawmakers fail to pass the bill. The Greeks are between a rock and a hard place....no pun attended to all the stone-throwers that are representing on the streets of Greece.
Reporters love their adages. This new one "kick the can down the road' was coined for the purpose of showing how inevitable all of this was. That's another thing reporters love, hindsight and tsk, tsk, tsk-ing. I visualize a boy in overalls, chewing on some hay, kicking an empty soup can down a dirt road. The 'can' being referred to is Greece's debt. The boy, I'm assuming, is Greece and/or all orgs and govs, who saw this coming and continued to ignore.
The news today showed the protesting in the streets of Greece, rocks against the tear gas. I really do empathize with the Greeks. Life is about to take a turn for the worst. The people, like all of us, trusted their government to protect their way of life. What happens when the governments fail. When parents fail, we throw a tantrum. But, eventually we forgive and move on because we're stuck with our parents. When a government fails, the people riot. It's not like they are going to be handed a clean slate, a do over. The only option on the table is reform, and the heads that will roll will not just be the politicians.
Good news. I made cod last night. Broiled the fish, added whatever spices I had on hand..which included garlic powder. It came out pretty good. I didn't get sick. Good times.
http://news.bbc.co.uk/2/hi/europe/8494849.stm
Monday, June 20, 2011
The Big Bailout
Here goes nothing.
The Greek bailout is sort of like when I took out the loans to pay off my college debt and how you're dealing with mortgage. These examples are quite laughable compared to the deep deep hole Greece (and others) have dug over the past decade. Borrowing is the life blood of students, households and governments alike.
It's a lesson we learned already a couple of years ago, when Wall Street crumbled. Greece borrowed big, can't pay back its creditors, and now needs to borrow more money to keep afloat. It's the cycle of debt.
Think of it this way, ma. You are the International Monetary Fund (IMF) and/or the European Union Commission (EUC). IMF is an intergovernmental organization made up of over 100 countries, made famous by one man, a maid and a hotel room. The EU Commission is the executive body for the European Union. It's good to know these terms, they'll be popping up a lot. I'm not going to go into what kind of power each has, that gets complicated and requires a whole lot of wiki reading. But, basically think of yourself as the entity everyone goes to when there is a squabble.
Your other daughter, my sister, will be Greece. She's the big spender. We'll call her Rani (princess) in case I actually go public with the blog. So, Rani has a job working retail at the mall. Her revenue, what she earns, is spent improving the infrastructure (her closet) and providing social services such as movies and eating out. She's not making all that much, so she starts to borrow money from me and opens opens up a couple of credit lines. The cards have dad's name on them, which means he's holding Rani's debt.
This is where you, as the walking bank, comes into the picture. You'll give Rani a loan to pay of her credit cards, if she implements certain money management strategies, an austerity plan of sorts. These strategies shut down her new infrastructure projects and cut down, severely, on the social services. Of course, she needs to confer with her friends, determine if the clearing her debt is worth giving up the life she has built.
The big bailout is basically borrowing more money to pay off debt. The alternative is letting her and Greece default, which means a lot more people, the creditors will not get paid back, and will go down like the Titanic.
The problem is bigger than just having all this debt floating around. It's that a Western country is on the verge of defaulting. Countries have gone bankrupt before. But, most of them are third-world puny countries in Africa, of no consequence, sorry, where the big superpowers can swoop in and forgive debt. This is no longer case.
Now, we're waiting to see if Greece will pass their austerity plan. Greece's government will vote in a couple of days. The people are already angry and protesting because of all the cuts in social spending, and the tax increases. It doesn’t look good and will probably get worse.
To be continued.
Ok, any questions?
Related Link: http://economictimes.indiatimes.com/news/international-business/greek-debt-restructuring-could-eclipse-lehman-ecbs-stark/articleshow/9014744.cms
And so I Begin....
When I was a kid, my mom would pay my sister and me a dollar to read and verbally summarize a story from the front page of our local newspaper. It was her attempt at trying to get us to read about the world, when all we wanted to do was play Nintendo until our thumbs cramped up. The bribe didn't work, even though this was when a dollar was worth more than four chicken McNuggets. Eventually, my parents discontinued the subscription to our paper and we acquired Mario Bros. 2 and 3. Fast forward to 2011, I'm now working for a financial newswire service, being paid a bit more than just a buck, to pick out the top news of the day. I think this is what people call irony.
I do read a bit more news now, not that much more since there's also Facebook and gchat to contend with, but just enough to keep afloat on current events and avoid total embarrassment. The purpose for this blog is to explain the world of finance to my mother. However, in truth, this is an excuse to prove to myself that I actually know a thing or two about bailouts and bonds. I'll post a couple paragraphs oversimplifying the major financial news of the day. If my mom gets it, than I've got it!!!
Only disclaimer is that my explanations may not be worth the 99 cents. I'll try to provide links, so that you can fill in the gaps. Enjoy, because I'm going to have some fun with this, writing about finance on my own terms.
Subscribe to:
Posts (Atom)