Daily Digest

FreedomHouse2 on flickr

Daily Digest 6/11 - Syrian Opposition Elects New Leader, Borrowing To Stay Ahead In Europe, China Sells Abroad To Ease Slump

Monday, June 11, 2012, 10:46 AM
  • Chief Syrian Opposition Body Elects New Leader
  • South Carolina’s Pension Push Into High-Octane Investments
  • In Europe, Banks Borrowing to Stay Ahead of the Tide
  • Selling Abroad, China Eases Slump at Home
  • Flame and Stuxnet makers 'co-operated' on code

Follow our steps to prepare for a world after peak oil, such as how to store & filter water

Economy

Chief Syrian Opposition Body Elects New Leader (jdargis)

Sieda, 56, an expert on ancient civilizations, is a longtime exile who lives in Sweden, like his predecessor, who is based in Paris. Activists actually doing the fighting in Syria worry that if they succeed in deposing Assad, the exiles will swoop in and take over.

South Carolina’s Pension Push Into High-Octane Investments (jdargis)

What is sure is that while he was running things, South Carolina ended up paying hundreds of millions of dollars in fees — $344 million last year alone — to a Who’s Who of hedge fund managers and private equity deal makers. In return, it got a trove of investments that haven’t really provided the bang that people here had hoped for. Today, the pension fund has a higher share riding on private-equity and hedge-fund plays — called “alternative investments” in some circles — than almost any other state’s: $13 billion, or more than half its total.

In Europe, Banks Borrowing to Stay Ahead of the Tide (jdargis)

“It’s another step in a long process,” Charles Kantor, a portfolio manager at Neuberger Berman in New York, said on Sunday. “The Spanish banks, like the banks in France and Italy, all need capital.”

Selling Abroad, China Eases Slump at Home (jdargis)

China’s renewed success relies heavily on the American market, with Chinese exports to the United States soaring 23 percent in May from a year earlier, the data on Sunday showed. Chinese exports to the European Union rose only 3.2 percent.

Flame and Stuxnet makers 'co-operated' on code (jdargis)

Speaking about Flame, a spokesman for the Israeli government distanced the country from involvement following an interview in which a minister seemed to back the attacks.

"There was no part of the interview where the minister has said anything to imply that Israel was responsible for the virus," the spokesman said.

Article suggestions for the Daily Digest can be sent to dd@PeakProsperity.com. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the "3 Es."

14 Comments

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 2774
Time2help's picture
Time2help
Status: Platinum Member (Offline)
Joined: Jun 9 2011
Posts: 555
Italian Bank Holiday (BNI)

Italian Bank Holiday (BNI)

A local article on the closure*

* The preliminary closure duration estimate is one month.  Yikes!

Time2help's picture
Time2help
Status: Platinum Member (Offline)
Joined: Jun 9 2011
Posts: 555
Europe Brings Out The "Capital Controls" Bazooka (Zerohedge)

Europe Brings Out The "Capital Controls" Bazooka

Erik T.'s picture
Erik T.
Status: Diamond Member (Offline)
Joined: Aug 5 2008
Posts: 1232
Jim H's picture
Jim H
Status: Diamond Member (Offline)
Joined: Jun 8 2009
Posts: 1555
Good interview Erik...

EJ does not give up too much to the public domain... thanks very much for bringing him on FS and providing the link to the interview.  Everything made good sense in the discussion... the only thing you two didn't touch on was the overarching derivatives bomb..  and the more I think about it, the more that is all that matters when it comes to end game discussion.  How can we talk rationally about things like longer term dollar depreciation, etc., when we have derivatives valued notionally at some 25X world GDP, where once even a small fraction start going money good as the dominos fall, the deflationary black hole vortex either takes all markets down with it, or incites the largest wave of printing ever seen?

ewilkerson's picture
ewilkerson
Status: Gold Member (Offline)
Joined: Jul 18 2010
Posts: 390
Would you believe that the

Would you believe that the Governor of SC when it's pension fund got into trouble started his career at THE GOLDMAN SACS?

Doug's picture
Doug
Status: Diamond Member (Offline)
Joined: Oct 1 2008
Posts: 2763
Jim H.

Quote:
How can we talk rationally about things like longer term dollar depreciation, etc., when we have derivatives valued notionally at some 25X world GDP, where once even a small fraction start going money good as the dominos fall, the deflationary black hole vortex either takes all markets down with it, or incites the largest wave of printing ever seen?

http://www.zerohedge.com/news/isda-says-no-cds-trigger-subordination

Quote:
And just as ISDA was starting to become somewhat credible again, we get this from Bloomberg:
  • Spanish CDS Trigger Unlikely on Subordination, Says ISDA *Dow Jones

So..... Subordination? Thank you ISDA for confirming that the true reason of today's sell off has now been enacted.

I think we are beginning to see the writing on the wall.  Since the ISDA has to declare something a "credit event" to trigger a CDS, they might have a lot of difficulty finding a credit event among the proliferation of defaults and collapses, particularly if they are big ones.  Of course, all those entities who buy the CDSs to hedge their loans will have to eat their losses, but it may not trigger systemic failure.

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 2774
jumblies's picture
jumblies
Status: Silver Member (Offline)
Joined: Jun 13 2010
Posts: 244
Wall Street Shrugs As JPMorgan Trades Lop Off $27 Bn

http://www.bloomberg.com/news/2012-06-10/wall-street-shrugs-as-jpmorgan-trades-lop-off-27-billion.html

JPMorgan Chase & Co. (JPM) Chief Executive Officer Jamie Dimon plans to testify before Congress this week about his firm’s $2 billion trading loss. His Wall Street colleagues don’t understand why.

“Occasional losses are inevitable,” said Blackstone Group LP (BX)’s Stephen A. Schwarzman, 65, CEO of the largest private- equity firm. “Publicly excoriating JPMorgan serves no purpose except to reduce people’s confidence in the financial system.

Publically excoriating [insert criminal act here] serves no purpose except to reduce people's confidence in criminals.

Executives, lobbyists and analysts said in more than a dozen interviews that the public stir is an overreaction to a minor misstep.

I kind of shrug,” said Bill Archer, 58, a former co- chairman of Goldman Sachs Group Inc. (GS)’s capital markets committee and now a partner at buyout firm Veronis Suhler Stevenson LLC in New York. “That’s just the way the world is.”

And what I find kinda interesting is that those who lost nothing and profited the most don't get it. But you can see their point of view. If it didn't impact them in a negative way, how could they possibly see that there was a negative impact? And even if all hell broke loose, they'd simply toddle off to one of their mansions. And why not? I would. So would you.

Of course, for those impacted have another view. Perhaps even made all the stronger by jealousy. Perhaps because they didn't prepare or position themselves better. Perhaps because they were too slow to react, perhaps they didn't understand or know how, perhaps they were given poor advice.

If you haven't already, I'd suggest you read Adam Fergusson's When Money Dies. It has many parallels and may give some indication of what could happen in the future whilst explaining why people can't (or won't) see what's happening now.

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 2774
S&P warns of risk if Spain rescue comes from new fund

"Standard & Poor's warned Monday that holders of Spain's bonds could be at risk if the nation ends up needing more money than now expected from a new European bailout fund.
It is unclear whether Spain's banking rescue loan would come from the European Financial Stability Facility and/or a new bailout fund coming into force in July -- the European Stability Mechanism (ESM).

If the money -- up to 100 billion euros ($125 billion) -- comes from the ESM, then the bailout fund's credit would take priority for repayment over ordinary investors in any crisis.

Several analysts have warned that this change from the existing rules means that a rescue using the ESM could have the unintended effect of scaring ordinary investors away from Spanish government bonds.

"If the amount borrowed from the ESM were to materially exceed the currently expected 100 million euros, the ESM's self-declared preferred creditor status could, in our view, constrain Spain's access to the capital markets and therefore reduce the likelihood of bondholders being paid in full," Standard & Poor's warned."

saxplayer00o1's picture
saxplayer00o1
Status: Diamond Member (Offline)
Joined: Jul 30 2009
Posts: 2774
Banks brace for likely downgrade

Banks brace for likely downgrade

California Pension Fund Down Almost 5% as End of the Year Looms

"SPAIN REITERATED its determination to continue tapping private debt markets for day-to-day funds as financial markets delivered a cold response to Europe’s €100 billion support package for the country’s banks.

While the Spanish request for aid is predicated on access to markets for nonbank borrowing, the agreement did nothing to arrest the relentless upward pressure on the interest rates the country must pay. Amid uncertainty over the rerun of the Greek election next Sunday, Italian bond yields also rose yesterday.

If Spain is to avoid a full-blown bailout later this year, its borrowing costs are going to have to come down quickly. Some €82.5 billion in sovereign debt falls to be refinanced before 2013, alongside a further €15.7 billion for autonomous regional governments and a central government deficit of €52 billion."
 

 

Woodman's picture
Woodman
Status: Diamond Member (Offline)
Joined: Sep 26 2008
Posts: 1027
Hyper vs. High Inflation

terrific interview Erik, will you be doing these reguarly with FSN?

Travlin's picture
Travlin
Status: Diamond Member (Offline)
Joined: Apr 15 2010
Posts: 1322
Very good

Erik

That was an excellent interview.  Janszen was very impressive.  Of course it helps when the interviewer asks good questions, and then listens carefully to the responses.  Nice job.

Travlin 

Erik T.'s picture
Erik T.
Status: Diamond Member (Offline)
Joined: Aug 5 2008
Posts: 1232
Woodman wrote:  terrific

Woodman wrote:

terrific interview Erik, will you be doing these reguarly with FSN?

Jim H, Woodman and Travlin,

Thanks for the kind words, guys. Yes, this will be a weekly interview intended for professionals and very advanced retails. Next week's interview is Bron Suchecki on the Mechanisms and effects of Arbitrage in PM markets, then Chris M. the following week with a post-FOMC macro briefing, then back to metals the following week with a show about the mechanics of metals markets - LBMA vs COMEX, how the settlement process really works, etc.

I welcome suggestions for other topics and guests.

Erik

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Login or Register to post comments