Griechenland: Ratingagentur Moody’s stuft griechische Banken herunter!

Haben sich S&P und Moody’s abgesprochen? S&P knöpft sich die PI(I)GS-Staaten vor und Moody’s schaltet die Banken in den jeweiligen Länder aus? ;-) Gefunden bei


Moody’s stuft neun griechische Banken herunter

30. April 2010, 15:24

Die Ratingagentur kündigte zudem an, auch die Kreditwürdigkeit Griechenlands abstufen zu wollen

New York – - Die Ratingagentur Moody’s hat die Bonitätsnoten für neun griechische Banken gesenkt. Betroffen sind unter anderem die National Bank of Greece (NBG), die Alpha Bank und die Emporiki Bank, wie Moody’s am Freitag mitteilte.

Zudem hat Moody’s bereits am Donnerstag angekündigt, die auch die Kreditwürdigkeit Griechenlands voraussichtlich deutlich herabzustufen. Zunächst bleibe die Einschätzung aber noch unverändert bei “A3″, teilte die Agentur mit. Eine Entscheidung über eine Herabstufung werde gefällt, sobald die Details über das geforderte Sparprogramm des Landes vorliegen würden. Es werde dann aber wahrscheinlich zu einer Herabstufung um mehrere Stufen kommen. Die Überprüfung werde sich daran ausrichten, wie die mittelfristigen wirtschaftlichen Fundamentaldaten eingeschätzt würden und wie “ambitioniert” das Sparprogramm der Regierung sei.

Die Agentur S&P hatte in dieser Woche ihr Rating für Griechenland auf “Ramsch”-Status gesenkt. Dabei war S&P kritisiert worden, den Ausgang der Sparverhandlungen der Regierung mit EU und IWF nicht abgewartet zu haben.

Die Regierung Griechenlands verhandelt gegenwärtig mit IWF und EU über Bedingungen, zu denen das hochverschuldete Land dringend benötigte Finanzhilfen in Milliarden-Höhe bekommen könnte. Binnen Tagen sollen Ergebnisse vorliegen. Wahrscheinlich sind heftige Einschnitte bei Löhnen und Renten, höhere Steuerbelastungen und andere harte Einschnitte im Sozialbereich. (APA/Reuters)

When You’re A Kleptomaniac, Stealing Looks Normal

The WSJ has an interesting article that deserves some exposition:

As debate started in the Senate Thursday on the broad overhaul, some administration officials and lawmakers said they worried the amendments could backfire, steering lending and trading in complex financial instruments to hedge funds and other finance companies that are less regulated than banks. There are also fears that tight limits on U.S. banks could put them at a competitive disadvantage, because similar restraints don't exist for their overseas rivals.

Notice the weasel in here.  One part (trading complex financial instruments) should be diverted to hedge funds and other unregulated - and free-to-fail, no-backstopped firms.

The other part (lending) will always be done by banks - you have one on the corner, or a credit union, that will write you a loan, yes? 

Sens. Ted Kaufman (D., Del.) and Sherrod Brown (D., Ohio) plan an amendment that would prohibit any bank from ever holding more than 10% of the country's deposits and put strict caps on the debt banks issue.

This is the amendment that I highlighted with two Tickers, one text and one, for the "visually inclined", in video.  This amendment deserves to be law right now - one way or another.

Sens. Maria Cantwell (D., Wash.) and John McCain (R., Ariz.) have worked on an amendment that would force commercial banks to separate from investment banks—revisiting the Glass-Steagall Act of the 1930s.

That plus the above would effectively BE Glass-Steagall. 

I like that a lot.

Obama administration officials have declined to weigh in on any specific amendments, with one exception: a move by Sen. Bernie Sanders (I., Vt.) to give the government more power to audit certain operations at the Federal Reserve. Fed and administration officials have signaled they would fight to stop it at all costs. Mr. Sanders has more than a dozen co-sponsors.

Why should the administration fight such a thing?  What possible purpose - that doesn't involve scams and fraud - is served by The Fed being able to operate in secrecy?

"Hopefully, common sense and maturity will take control, and the hyperbole and populism, while good for the TV cameras, will be put aside," said Mr. Gregg said.

Mr. Gregg (and the rest of you) ought to read this (warning - not mine, and full of colorful language.  Not suitable for children and all that:)

“I’m sure you have the answer, you and Ron Paul and all the other pot-smoking libertarian do-gooders have it all figured out. But what I’m saying is, no confidence means end of the confidence game. That’s what Lehman showed. Every single player in finance suddenly had to face the fundamental problem—this whole fu!@ing economy is built on fraud and lies and garbage. So when Lehman collapsed, every single player panicked, going, ‘If Lehman was nothing but a Ponzi scheme—and I know what I’m running is a Ponzi scheme—holy shit, that means everyone else is running a Ponzi scheme too! Run for the exits!’ No one trusted anyone else, everyone pulled out, and the entire global economy collapsed just like that. And that meant your parents, my parents, every teacher, every fireman, every person in the country going into retirement, every price on every asset—wiped out.

Oh.  You mean that "if we scam and screw people enough, then you must let us keep doing that, lest we have riots or even civil war"?

That seems to be the argument that Judd Gregg and others - including Geithner and Obama - are putting forward.

Here's the problem with the argument: It doesn't work in the long haul.

It got a lot more vicious and personal than this, but when our verbal slap-fight ended—and he paid the bill—I thought about what he said, and it made a lot more sense. Fraud has become so endemic in this country that it’s woven its way into America’s DNA, forming a symbiotic relationship that can’t be undone without killing off the host. If they push it just a little too hard, the entire American economy could crash, asset values could tank, and that means tens of millions of extremely pissed off retirees and Baby Boomers. As the Wall Streeter put it: “Whoever is responsible for bursting this latest bubble by exposing all the fraud—and tanking all the markets—will not only be out of power for at least a generation, but they’ll all have to get radical reconstructive surgery on their faces and seek political asylum somewhere remote. No one wants to be that guy, and that’s why it’s not going to happen.”

That may be true, but all bubbles to eventually burst, all Ponzi schemes do collapse. The only question is when. For those of us not on the verge of retiring, the sooner we have this day of reckoning and get it over with, the better.

What the author forgets is that for those who are on the verge of retiring, you'd be better off getting it over with now and choosing not to retire, than having it happen once you do and being completely and irredeemably hosed.

In case you've forgotten, this isn't uniquely (or even largely) the fault of one political party or the other.  It's both.

But here's the key: The party that does not put a stop to this and gets tagged with obstructing locking all these ignoble, felonious bastards up will be the one that - at best - never darkens the halls of Congress or The White House again.

Core Ideas in Trading Psychology: Solution-Focused Change

One of the key themes running through the TraderFeed blog, as well as the books that I've written on trading psychology, is that effective change comes from building on positive patterns of thoughts and behavior. We can think of these as "solution patterns", as opposed to the "problem patterns" that typically become the focus of coaching and counseling efforts.

The essence of the solution-focused approach is that we can often find the answers to our problems by looking at instances in which those problems are not occurring. For instance, if a trader who is troubled by a problem of overtrading exercises good restraint on a particular day, we would try to find out how he accomplished that. We would examine his preparation for the market day, his efforts to guide his decision-making with rules, his thought process while positions were on, etc. Out of this examination, we can figure out what he did right: what works for him. By crystallizing those positive actions into solution patterns, we can do more of what works and begin to build new, positive habit patterns.

The value of the solution focused method is that it does not impose answers from the outside: it builds upon the existing strengths of the trader. The key idea is that, in some ways, at some times, we trade well: we do not fall into problem patterns and instead enact the skills that define who we are when we are at our best. This requires a major mind shift for many traders: they are so focused on their problem patterns that they never note their strengths. And if they aren't aware of what they are doing right and how they're doing it, how can they hope to build on those competencies?

This is why it is valuable, in keeping trading journals, to identify clearly what you are doing well as well as what you need to improve. By turning positive trading behaviors into forward-looking goals, we build on strengths and move ourselves closer to our ideals.

For more on solution-focused methods, check out The Daily Trading Coach and the posts on Focusing on Trading Solutions and this post (and its links) on Becoming Solution Focused.

John Taylor: „Switzerland, Surrounded Again“

Switzerland, Surrounded Again
April 29, 2010
By John R. Taylor, Jr.
Chief Investment Officer

In the late 1930’s the Fascist and National Socialist tide rose around the democratic confederation of Switzerland and, with the fall of France in 1940, completely surrounded it until late 1944. A careful reading of Swiss history, as Europe was being swallowed by this right-wing tide, shows a sharp influx in refugees and a dramatic increase in population that burdened the local infrastructure, which was still coping with the rigors of the Depression. There are thousands of anecdotal memoirs of the horrors of those times and the stresses that the Swiss were under. Although the Swiss accepted many, many more were turned away, and for those Jews not accepted their rejection most certainly ended in death.

The story is tragic and the Swiss made harsh decisions when faced with waves of desperate people fighting for their lives. In the end, the Swiss fought hard to retain their freedom as all around them lost theirs, compromising with those that encircled them on the one hand and threatening them on the other. By centering their armies in the mountains, in the national redoubt, and being willing to sacrifice the cities and destroy all the passes and tunnels which were critical to the Germans and Italians, the Swiss held their enemies at bay. Every Swiss city worth its salt has a street named after General Guisan who led the Swiss Army through that war.

World War II was fought over the control of people, whether they lived or died, their philosophical beliefs, and their land. In the end, the Swiss were willing to give up almost everything to not succumb to the National Socialists. Today, the Swiss are in a less stark, but surprisingly similar spot. They are surrounded by another all-encompassing concept: the euro. At first glance this might seem comical, but the German government stands ready to pay very large sums of money to any thief who can produce a list of German account holders at Swiss banks and the Italians are photographing the license plates of all cars crossing into Switzerland to check them against their tax records. Government agents and spies are involved as well. As far as we know there are no deaths in this war, but there are many financial losses, jail terms, and bankruptcies. In the past, the victims were wealthy men and corporations, and the battles had significant moral overtones, but the recent movement toward euro disintegration expands the battlefield, increases the risks astronomically, and will victimize all of western continental Europe, including Switzerland , from the lowliest clerk to the mightiest corporation.

Right now the flood of money attempting to enter Switzerland legally and illegally has caused the euro- Swiss exchange rate to drop from 1.51 in mid-December to 1.4325, where the Swiss National Bank has been the final bid for all euros offered for most of this month. The Swiss added 16 billion euros to their reserves in March and M-2 is growing faster than China ’s. So much money wants to get in that the Swiss are overwhelmed. It might be money not people, but it bears a clear resemblance to 1940.

Most of the world seems to think that the Americans are the ones who do the crazy things, but it is really the Europeans who commit the colossal blunders. Americans are empiricists – they will try anything, but if it doesn’t work they stop doing it. Europeans are thinkers, philosophers. They theorize and analyze brilliantly creating castles in their minds, turning them over and over to perfect them. The tradition starts with Plato, then Machiavelli, and goes through Karl Marx, Nietzsche, and Pareto, to the creators of the euro. Every philosophy can be discredited. It is only when a concept works in the real world over time and is adjusted to fit changing circumstances – like Communism in China – that one can be sure of success. All empiricists know that the euro can not work as constructed, but the Euroleaders will destroy their economies, harming the Swiss as well, until they are forced from power.

h/t Teddy KGB

5 Reasons We Must Break Up the Giant Banks

As everyone from Paul Krugman to Simon Johnson has noted, the banks are so big and politically powerful that they have bought the politicians and captured the regulators.

But the giant banks are not only dangerous because they skew the political system. There are five economic arguments against the mega-banks as well.

Impaired Competition

Fortune pointed out last February that the only reason that smaller banks haven't been able to expand and thrive is that the too-big-to-fails have decreased competition:

Growth for the nation's smaller banks represents a reversal of trends from the last twenty years, when the biggest banks got much bigger and many of the smallest players were gobbled up or driven under...

As big banks struggle to find a way forward and rising loan losses threaten to punish poorly run banks of all sizes, smaller but well capitalized institutions have a long-awaited chance to expand.

So the very size of the giants squashes competition.

Less Loans, More Bonuses

Small banks have been lending much more than the big boys.

The giant banks which received taxpayer bailouts actually slashed lending more, gave higher bonuses, and reduced costs less than banks which didn't get bailed out.

Lack of Transparency in Derivatives

JP Morgan Chase, Bank of America, Goldman Sachs, Citigroup, and Morgan Stanley together hold 80% of the country's derivatives risk, and 96% of the exposure to credit derivatives.

Experts say that derivatives will never be reined in until the mega-banks are broken up.

Increased Debt Problems

As I pointed out in December 2008:

The Bank for International Settlements (BIS) is often called the "central banks' central bank", as it coordinates transactions between central banks.

BIS points out in a new report that the bank rescue packages have transferred significant risks onto government balance sheets, which is reflected in the corresponding widening of sovereign credit default swaps:

The scope and magnitude of the bank rescue packages also meant that significant risks had been transferred onto government balance sheets. This was particularly apparent in the market for CDS referencing sovereigns involved either in large individual bank rescues or in broad-based support packages for the financial sector, including the United States. While such CDS were thinly traded prior to the announced rescue packages, spreads widened suddenly on increased demand for credit protection, while corresponding financial sector spreads tightened.
In other words, by assuming huge portions of the risk from banks trading in toxic derivatives, and by spending trillions that they don't have, central banks have put their countries at risk from default.
Now, Greece, Portugal, Spain and many other European countries - as well as the U.S. and Japan - are facing serious debt crises. See this, this and this.

By failing to break up the giant banks, the government is guaranteeing that they will take crazily risky bets again and again and again.

We are no longer wealthy enough to keep bailing out the bloated banks. We have serious debt problems. See this, this and this.

(Anyone who claims that Chris Dodd's proposed "reform" legislation will prevent banks from getting bailed out again is wrong. If the giant banks aren't broken up now - when they are threatening to take down the world economy - they won't be broken up next time they become insolvent, either. And see this.)

Unfair Competition and Manipulation of Markets

Moreover, Richard Alford - former New York Fed economist, trading floor economist and strategist - recently showed that banks that get too big benefit from "information asymmetry" which disrupts the free market.

Nobel prize winning economist Joseph Stiglitz noted in September that giants like Goldman are using their size to manipulate the market:

"The main problem that Goldman raises is a question of size: 'too big to fail.' In some markets, they have a significant fraction of trades. Why is that important? They trade both on their proprietary desk and on behalf of customers. When you do that and you have a significant fraction of all trades, you have a lot of information."

Further, he says, "That raises the potential of conflicts of interest, problems of front-running, using that inside information for your proprietary desk. And that's why the Volcker report came out and said that we need to restrict the kinds of activity that these large institutions have. If you're going to trade on behalf of others, if you're going to be a commercial bank, you can't engage in certain kinds of risk-taking behavior."

The giants (especially Goldman Sachs) have also used high-frequency program trading which not only distorted the markets - making up more than 70% of stock trades - but which also let the program trading giants take a sneak peak at what the real (aka “human”) traders are buying and selling, and then trade on the insider information. See this, this, this, this and this. (This is frontrunning, which is illegal; but it is a lot bigger than garden variety frontrunning, because the program traders are not only trading based on inside knowledge of what their own clients are doing, they are also trading based on knowledge of what all other traders are doing).

Goldman also admitted that its proprietary trading program can "manipulate the markets in unfair ways". The giant banks have also allegedly used their Counterparty Risk Management Policy Group (CRMPG) to exchange secret information and formulate coordinated mutually beneficial actions, all with the government's blessings.

Again, size matters. If a bunch of small banks did this, manipulation by numerous small players would tend to cancel each other out. But with a handful of giants doing it, it can manipulate the entire economy in ways which are not good for the American citizen.

No wonder virtually every independent economist and financial expert is calling for the big banks to be broken up.

Some argue that it is logistically impossible to break up the behemoths. But if we broke up Standard Oil, we can break up the giant banks as well.

Restaurant Index shows Expansion in March

This is one of several industry specific indexes I track each month.

Restaurant Performance Index Click on graph for larger image in new window.

This is the first time in 29 months that the index is showing expansion.

Unfortunately the data for this index only goes back to 2002.

Note: Any reading above 100 shows expansion for this index.

From the National Restaurant Association (NRA): Restaurant Industry Outlook Continues to Improve as Restaurant Performance Index Tops 100 for the First Time in More Than Two Years
[T]the National Restaurant Association’s Restaurant Performance Index (RPI) ... stood at 100.5 in March, up 1.4 percent from February and its strongest level since September 2007. In addition, the RPI rose above 100 for the first time in 29 months, which signifies expansion in the index of key industry indicators.

The RPI’s solid performance in March was driven by improvements among both the current-situation and forward-looking indicators,” said Hudson Riehle, senior vice president of the Research and Knowledge Group for the Association. “Restaurant operators reported net gains in both same-store sales and customer traffic in March, the first time in 31 months that both indicators stood in positive territory.”

“In addition, restaurant operators are increasingly optimistic about growth in sales and staffing levels in the months ahead, while their outlook for the economy soared to its strongest level in five years,” Riehle added.
For the first time in 22 months, restaurant operators reported net positive same-store sales.
Restaurant operators also reported a net increase in customer traffic in March, the first positive reading in 31 months.
emphasis added
Restaurants are a discretionary expense, and they tend to be 'first in, last out' of a recession for consumer spending (as opposed to housing that is usually first in and first out).

Handelsblatt Illustrates German Opposition

At right is the front page of Today’s Handelsblatt (April 29), a business newspaper in Germany of about 150,000.  It competes with the German editions of the Wall Street Journal and Financial Times.

On a normal day, the Handelsblatt cover looks like the example at bottom — full of words and stories.  Today, however, their cover is all black to powerfully illustrate the extreme distaste and opposition to a Greek bailout. They called yesterday “black Wednesday” in reference to German Prime Minister Angel Merkel’s change of heart regarding the need for a bailout of Greece.

Markets are rallying (again) on the idea that Greece will be bailed out and once and for all this issue will be put behind us.  We say “again” because this is the fourth or fifth time risk markets have rallied on the idea a bailout is coming and this story will be over.  In all those cases, they were disappointed.

  • Bloomberg.comMerkel Pressed to Enlist Banks in Greek Rescue as Bill Drafted
    German lawmakers considering a bill to aid Greece challenged Chancellor Angela Merkel to involve banks in the rescue, refusing to back down after her government said that would send a “fatal signal” to markets. The main opposition Social Democratic Party threatened to withhold support for aid next week when the bill is fast-tracked through parliament unless banks are asked to contribute. Members of Merkel’s Christian Democrats said the government should ask banks to voluntarily accept losses on their investments.
  • Der SpiegelEuro Fears Force Merkel To Act
    After weeks of hesitation over the German response to the Greek crisis, Chancellor Angela Merkel is suddenly calling for swift action.  “It is clear that the negotiations must now be accelerated,” she said Wednesday at an appearance with Dominique Strauss-Kahn, the head of the International Monetary Fund (IMF), in Berlin. A serious-looking Merkel called for an agreement to assist Greece “within the next few days,” adding: “We will not back out.”  Observers were surprised by Merkel’s strong words. Until now, the chancellor has not exactly come across as a driving force when it comes to action on the Greek crisis. Merkel has long been reluctant to promise the Greeks billions of euros in European aid, something which has earned her the nickname “Madame Non” in the European Union. At home in Germany, however, she has been feted by the tabloid press as the “Iron Chancellor” because she had rebuffed the “bankrupt Greeks.”
  • MarketnewsEBRD Head Warns Against Banks Absorbing Costs Of Greek Rescue
    The president of the European Bank for Reconstruction and Development (EBRD), Thomas Mirow, warned Friday against making banks shoulder part of the aid for Greece because this would weaken them again. “Therefore a bailout that would include the banks could be more costly for taxpayers than a straight bailout by states,” Mirow, a German national, told reporters on the sidelines of a conference organized by the Aspen institute here. “This is what one has to be very careful [about],” he said. A senior member of German Chancellor Angela Merkel’s CDU/CSU-FDP government coalition said Thursday that there should be discussions with Greece’s creditors about a voluntary haircut on their claims. “We should talk with banks and other investors about voluntarily forgoing their claims” against Greece, Leo Dautzenberg, the CDU/CSU’s parliamentary financial policy speaker, urged. Nobert Barthle, the CDU/CSU’s parliamentary budget speaker, said on Wednesday there was significant resistance inside the CDU/CSU parliamentary group against aid for Greece without participation of the creditors.

Just Because Washing Down Endless Daily Porn Surfing With Some Taxpayer Funded Happy Hour Never Felt So Good

From a reader:

Surprised to find out that the tax payer may be footing the bill for the SEC’s bar tab.  Tried to grab a beer at the Gin Mill Bar in NYC the other night, but with 100 members of the SEC inside, it kinda killed the vibe.   See attached.    

Well, in all honesty this beats the AIG taxpayer funded trip to Ritz Carlton Half Moon Bay. Plus, being so corrupt and so incompetent (telling someone you work for the SEC creates a whole new category in mental visualization) as the average SEC worker, is in fact hard work. These are traits that in a different century, Charles Darwin would likely say should be critical for sexual selection... cue porn jokes here.

And seriously, what better use of their time to SEC staffers have? Suddenly Goldman isn't hiring SEC drones direct into its Correlation and Mortgage trading desks. As for enforcement - well, they can always just read a blog or two and catch up on those criminals they fell like dealing with.

Now back to porn and bitching about a sub-$1 billion budget.

Chart on Silver (by Mike Paulenoff)

It is staggering to think that spot gold prices have rocketed well beyond the January 1980 high, while spot silver prices are about 60% off of the 1980 high! Let’s notice that the silver price structure is heading for a confrontation with its long-term resistance line, now at $19.54, which if hurdled and sustained just might be the catalyst for upside acceleration that plays catch-up in a hurry with the advance in gold prices. In any case, my work points to an approaching confrontation with the 1980-2010 resistance.

The iShares Silver Trust (SLV) has hurdled its Dec-Apr resistance line at 18.05, and has traded above its prior high at 18.17 (from Apr 15). Both of these are technical signs of strength that point to upside acceleration that confronts much more important resistance along the March 2008-present trendline, now at 18.70/75.


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