Some Additional Perspective On Europe [View article]
"It seems the eurozone is split these days between those who produce and those who don't." I would broaden that quote to include the good citizens of the USA.
As Chesapeake (CHK) confirms its $3B bridge loan has turned into $4B, Sanford Bernstein notes if CHK’s debt pile amounts to more than 4X its trailing four quarters of EBITDA, it would trigger a cascading bond default. Given anticipated producing asset sales decreasing EBITDA, along with lower natural gas prices, "the ratio has the potential to approach, if not exceed" the threshold by Q3 or Q4. [View news story]
I bought CHK at 19 and I'm suffering from an excess of gas.
The Coming Meltdown In College Education [View article]
The financial system requires new debt to service the old through the issuance of the fiat currency. Student loans have exploded in the wake of the housing bubble which resulted from easy money policies following the Internet bubble. When the student loan bubble bursts, treasuries will be the last debt standing until it too collapses and ushers in The Big Reset.
Countries should have a democratic right to quit the eurozone, says the ECB's Luc Coene, allowing that Greece's exit "would be possible," even as it may not be in Europe's interest. It's a pattern now - no longer is the rhetoric from top EU policymakers one of assured Armageddon. [View news story]
On another thread, a liberal Californian (I know that's redundant) observed that CA could shore up its finances if only it could get back the same percentage of its tax revenues paid to the Feds as some of the poorer states. I love the contradiction, On the one hand, he's all in favor of redistribution. On the other, he complains when his hide is skinned. I never could understand the logic of liberals.
California faces a deficit of $16B, Governor Jerry Brown said yesterday (video), not the $9B he'd estimated in January. The ballooning gap is due to tepid tax revenues and slow progress in slashing budgets, which Brown blamed on the federal government and the courts. One bit of hope is Facebook's IPO, which could bring in $2B. (see also) [View news story]
What would happen if CA had a major earthquake and required Katrina type assistance?
Asia's closer to getting on board the regional trade pact bus, as Japan's Prime Minister Yoshihiko Noda boards a flight to Beijing and says he'll speed up negotiations on a trade structure with China and South Korea. The so-called FTA would match up in size with NAFTA and the EU. [View news story]
The Japanese don't always tell you when they're flying over to pay you a visit.
Just two days after JPMorgan (JPM) announced a massive $2B trading loss, Pimco's Bill Gross comes to its defense, calling it one of the “best-run banks in the world." It’s a decently capitalized bank, Gross says, with $120B of Tier-1 capital. "That’s 10.5%, which is higher than the 9% U.S. average.” And capital quality, according to Pimco, is what you need to trust most in a situation like this. [View news story]
Mark Thoma says ~200K people will lose unemployment benefits in California and other states today. Under the terms of last year's agreement in Congress, benefits would be cut off if jobless rates fell below certain thresholds; despite a weak job market, rates have been falling. "Will a cut in benefits motivate workers who have become dependent on the program to go out and find jobs?” [View news story]
The comments here are astounding. Don't you feel,any compassion for the poor souls who are out of work and need assistance? It is the responsibility of the collective to help those in need. Have you learned nothing? Only through collective action can we achieve fairness and equality. People who have more must assist those who have less. All this will come to pass in the second Obama administration.
When Something Goes Wrong: The Case Of JPMorgan Chase [View article]
JPM was thought to be best of breed. Its gargantuan derivatives book was thought to be well hedged. The economy was thought to be improving. Another thought: JPM is TBTF. My only question is whether its failure can be prevented. Just to keep it interesting, I am going to hold on to my small position.
JPMorgan (JPM) schedules an unusual conference call following the release of its 10-Q filing. The lender says its Chief Investment Office (CIO) unit has suffered significant mark-to-market losses. Shares -3.9% AH. [View news story]
The market should soar tomorrow on this news. I can hear the Fed's hard drive cranking out those electronic credits from where I sit in an undisclosed location.
Syriza party chief Tsipras tones things down a bit on the bailouts (from "barbaric," "null and void"), telling CNBC of his desire to keep Greece in the eurozone and his willingness to negotiate with the Troika to achieve such. Polls have Tsipras as the leading vote-getter if another election is held in June. [View news story]
When America's parasites are told their benefits will be cut and taxes raised to fund their massive ship of state, all hell will break out. The Greeks have nothing on our thugs who burn down their own cities for kicks on Halloween and overturn vehicle and loot just because their sports team lost or won. Think New Orleans after Katrina. The thugs will come out like roaches.
Some Additional Perspective On Europe [View article]
I would broaden that quote to include the good citizens of the USA.
As Chesapeake (CHK) confirms its $3B bridge loan has turned into $4B, Sanford Bernstein notes if CHK’s debt pile amounts to more than 4X its trailing four quarters of EBITDA, it would trigger a cascading bond default. Given anticipated producing asset sales decreasing EBITDA, along with lower natural gas prices, "the ratio has the potential to approach, if not exceed" the threshold by Q3 or Q4. [View news story]
The Coming Meltdown In College Education [View article]
The cover of Der Spiegel: "Acropolis adieu! Why Greece must leave the euro now." [View news story]
Countries should have a democratic right to quit the eurozone, says the ECB's Luc Coene, allowing that Greece's exit "would be possible," even as it may not be in Europe's interest. It's a pattern now - no longer is the rhetoric from top EU policymakers one of assured Armageddon. [View news story]
California faces a deficit of $16B, Governor Jerry Brown said yesterday (video), not the $9B he'd estimated in January. The ballooning gap is due to tepid tax revenues and slow progress in slashing budgets, which Brown blamed on the federal government and the courts. One bit of hope is Facebook's IPO, which could bring in $2B. (see also) [View news story]
Asia's closer to getting on board the regional trade pact bus, as Japan's Prime Minister Yoshihiko Noda boards a flight to Beijing and says he'll speed up negotiations on a trade structure with China and South Korea. The so-called FTA would match up in size with NAFTA and the EU. [View news story]
Germany (EWG) could face an energy catastrophe this winter, largely due to its overly aggressive green energy policy. [View news story]
Just two days after JPMorgan (JPM) announced a massive $2B trading loss, Pimco's Bill Gross comes to its defense, calling it one of the “best-run banks in the world." It’s a decently capitalized bank, Gross says, with $120B of Tier-1 capital. "That’s 10.5%, which is higher than the 9% U.S. average.” And capital quality, according to Pimco, is what you need to trust most in a situation like this. [View news story]
Mark Thoma says ~200K people will lose unemployment benefits in California and other states today. Under the terms of last year's agreement in Congress, benefits would be cut off if jobless rates fell below certain thresholds; despite a weak job market, rates have been falling. "Will a cut in benefits motivate workers who have become dependent on the program to go out and find jobs?” [View news story]
When Something Goes Wrong: The Case Of JPMorgan Chase [View article]
JPMorgan (JPM) schedules an unusual conference call following the release of its 10-Q filing. The lender says its Chief Investment Office (CIO) unit has suffered significant mark-to-market losses. Shares -3.9% AH. [View news story]
Do Panic Over Europe [View article]
Syriza party chief Tsipras tones things down a bit on the bailouts (from "barbaric," "null and void"), telling CNBC of his desire to keep Greece in the eurozone and his willingness to negotiate with the Troika to achieve such. Polls have Tsipras as the leading vote-getter if another election is held in June. [View news story]
Initial Jobless Claims: 367K vs. 366K consensus (prior week revised to 368K from 365K). Continuing claims -61K to 3.22M. [View news story]