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Eurozone debt crisis: should investors prepare for a Greek exit?

May 27, 2012 in Finance, Politics, Update, World News

As the euro crisis sends the stock market tumbling, investment experts remain surprisingly upbeat about equities.

By   -  telegraph.co.uk

Investors have been told that Greece leaving the euro will not be a disaster Photo: McWilliams

The chances of Greece exiting the euro intensified last week – so much so that EU leaders were warned to have contingency measures in place.

Such was the demand for safe-haven assets that investors rushed to snap up German bonds that paid a coupon of 0pc. That’s right, investors piled in to buy government bonds that will not deliver a return but are deemed among the eurozone’s safest assets.

Morgan Stanley, the investment bank, published a note on Friday to warn: “We think that the ramifications of a Greek exit are more serious than the market anticipates. While a euro zone break-up is not our base-case scenario, we raise our subjective probability to 35pc from 25pc, and reduce the timescale of this move to 12-18 months from five years.

“We believe that the most likely scenario for a divorce is a Greek exit preceded and followed by strong contagion. There are three main channels for contagion: the sovereign, the banking sector and the political situation. The countries most at risk of material contagion seem to be Italy, Spain, Ireland and Portugal.”

Brian Dennehy, a financial adviser, has already prepared his clients’ portfolios for the FTSE100 plunging to 4,000 by the end of the year. “Our clients have largely been de-risked for many months,” he said. “In practice, this means none tend to have more than 20pc in equities. Although there could be some good news if the FTSE hits these levels, if investors are unprepared the risk is that they panic into selling at precisely the wrong time.”

It has been a tortuous few days – headlines of Armageddon and the death of equities will have caused anxiety among investors. They will be asking themselves whether they should be preparing their portfolios for an exit too. Read the rest of this entry →

FBI: ‘We are losing to hackers’ Hacktivists Win

March 30, 2012 in Headline, Occupy, Politics, World News

rt.com

if you thought hacktivists only messed with the FBI on Fridays, think again.

On Wednesday the Federal Bureau of Investigation admitted they are fighting a losing battle in cyberspace.

Shawn Henry, the FBI executive assistant director said fighting on the future “battleground” has been harder than initially thought.

I don’t see how we ever come out of this without changes in technology or changes in behavior, because with the status quo, it’s an unsustainable model,” Henry told The Wall Street Journal.

Unsustainable in that you never get ahead, never become secure; never have a reasonable expectation of privacy or security,” he added

Henry has gone on record saying he believes “the cyber threat is an existential one, meaning that a major cyber-attack could potentially wipe out whole companies,” said Henry on the FBI news website. Read the rest of this entry →

While Banks Have the Upper Hand, the Global Economic Crisis Will Continue

March 25, 2012 in Editorial, Finance, Headline, Politics, World News

The stock market may be up, but for working people the global political economy is likely to remain in crisis for at least another three to five years.

By William K. Tabb

Because the state of the economy looms so large in the outcome of the 2012 presidential election there is a tendency on the part of those who would like to see the president re-elected to be optimistic about recent job creation, factory orders and other indicators that there may be light at the end of the tunnel. The reality may be very different however and the changes needed go far beyond what Mr. Obama is proposing or is likely to get now or in the new Congress. The stock market may be up but for working people the global political economy is likely to remain in crisis for at least another three to five years, with high unemployment and slow growth. The character of this period makes a grim cyclical crisis worse by adding to it both a financial component and a deeper structural crisis which challenges a model of accumulation dependent on financialisation and corporate globalisation. A year ago, then European Central Bank president Jean-Claude Trichet expressed the view that the next ten years could be a ‘lost decade’. Median income in the US declined by 7% between 2000 and 2010 and the Wall Street Journal’s poll of 50 leading business economists expects the losses will not be made up before 2021. These are not the testimonies of radical Marxists (who generally hold similar opinions). Read the rest of this entry →

Busted for Busting Out at Bank of America

March 14, 2012 in Finance, Headline, Occupy, Politics

nationofchange.org

“Stripping Protestors In Pink Bras Crashed Bank Of America CEO Brian Moynihan’s Speech,” declared Business Insider on March 8, showing Moynihan’s stern photo with a pink bra playfully dangling in the air beside him.

It’s true, things did get a bit wild at Citi’s Financial Services conference at New York’s Waldorf Astoria when Brian Moynihan got on stage and began flipping through his tedious powerpoint.

While the hotel security was busy watching anti-bank protesters rallying outside, CODEPINK cofounder Jodie Evans, dressed in a hot pink bustier, burst into the conference room. “Bust up Bank of America before it busts up America”, she shouted, before being hauled out by security guards. “As I was saying,” continued a deadpan Moynihan to the laughter of the crowd, returning to the dreary slides that tried to put a rosy spin on this dinosaur of a company whose share price has plummeted while it continues to foreclose on families’ homes and faces tens of billions of dollars in damages from lawsuits over mortgage investments.

Little did Moynihan know that the excitement at what is normally a bankers’ snoozefest had just begun. CODEPINK codirector Rae Abileah and I were already seated in the front of the room. Wearing dark business suits, we did our best to blend into the crowd of stodgy white men in black business suits. Read the rest of this entry →

3 Mega – Banks Screwing You With Sneaky Fees — Again

March 4, 2012 in Finance, Headline

In recent years, the U.S. government has imposed important new regulations on big Wall Street banks — rules designed to keep banks from preying on consumers. But ironically, the mega-banks have responded to those regulations in a decidedly anti-consumer manner, with a relentless campaign to impose unfair new fees on the very consumers the regulations were designed to protect.

For years, big shiny banks like Chase and Bank of America were where you went to get “no fee,” “no hassle” checking accounts. We all got so used to seeing ads touting free checking accounts that many of us just came to accept free checking as the norm. At the same time, many of us have had our checking accounts with the same big bank (and/or the big bank that bought out our original bank) for years, giving some of us the impression that we’re still getting the same great deal as when we signed up.

But think about it for a second: How many advertisements for “free checking” have you heard in recent months? Probably not very many, because free checking is no longer standard at big banks. Quietly, banks have ratcheted up the fees associated with their accounts, and now, according to research firm Moebs Services, virtually all of the big banks have stopped offering free checking accounts. At the same time, the banks have increased fees for everything from lost debit card replacements to account minimums and even the “privilege” of speaking to a bank teller — fees that often disproportionately affect poor consumers who may have less flexible schedules and a harder time maintaining account minimums. Read the rest of this entry →

Argentine advice for Greece: ‘Default Now!’

February 23, 2012 in Finance, Headline, Politics, World News

Here in Argentina, when we watch the terrible things that are happening today in Greece, we can only exclaim, “Hey!! That’s exactly what happened in Argentina in 2001 and 2002…!”

­A decade ago, Argentina too went through a systemic Sovereign Public Debt collapse resulting in social turmoil, worker hardship, rioting and street fights with the police.

Some months before Argentina exploded, then-President Fernando de la Rúa – forced to resign at the height of the 2001 crisis – had called back as finance minister the notorious pro-banker, Trilateral Commission member and Rockefeller/Soros/Rhodes protégée Domingo Cavallo.

Cavallo was the gruesome architect of Argentina’s political and economic capitulation to the US and UK when he was President Carlos Menem’s foreign minister and economy minister in the ’90s. Read the rest of this entry →

How Greece could take down Wall Street

February 23, 2012 in Finance, Headline, World News

In an article titled “Still No End to ‘Too Big to Fail,’” William Greider wrote in The Nation on February 15: “Financial market cynics have assumed all along that Dodd-Frank did not end ‘too big to fail’ but instead created a charmed circle of protected banks labeled ‘systemically important’ that will not be allowed to fail, no matter how badly they behave.”

That may be, but there is one bit of bad behavior that Uncle Sam himself does not have the funds to underwrite: the $32 trillion market in credit default swaps (CDS). Thirty-two trillion dollars is more than twice the U.S. GDP and more than twice the national debt.

CDS are a form of derivative taken out by investors as insurance against default. According to the comptroller of the currency, nearly 95% of the banking industry’s total exposure to derivatives contracts is held by the nation’s five largest banks: JPMorgan Chase, Citigroup, Bank of America, HSBC, and Goldman Sachs. The CDS market is unregulated, and there is no requirement that the “insurer” actually have the funds to pay up. CDS are more like bets, and a massive loss at the casino could bring the house down. Read the rest of this entry →

Crisis and the People in Greece

February 22, 2012 in Finance, Headline, Occupy, Politics, Update, World News

By: Stavros Panagiotidis

“They are not frightening us, they are just making us furious!”

The so-called negotiations between the Greek Government and the Troika (European Union – International Monetary Fund – European Central Bank) have come to the prescribed result. A cut on the minimum wage of 22% (and up to 40% for the rest), which means that people in Greece will have to live on a 400 Euro monthly income, combined with a 15% cut on the already extremely low pensions and the dismissal of 150.000 public servants, has been decided.

The announcement of the governments’ intentions created waves of rage in Greece and the General Confederation of Trade Unions called for a 48-hour strike. On Sunday, the day of the voting procedure, an enormous demonstration took place. Hundreds of thousands of demonstrators flooded all the streets around the Parliament. The provocative action on the side of the police forces (along with the propaganda of dominant media saying that the people gathered were not more than 20,000!) proved the governments’ fear of the people’s reactions and its decision to destroy the demonstration and terrorize the citizens. The first task was accomplished when police forces, after hours of terrorizing attacks against people in the nearby streets, without any excuse attacked the main body of the demonstration shooting gas bombs inside the blocks, causing many people to faint out, get injured or even suffer suffocation for a few moments. More than 50 demonstrators went to the hospitals, injured or with respiratory problems and once again the Internet was flooded with videos showing the police’s illegal actions. Read the rest of this entry →

FEMA wants to monitor news coverage of its activities nationwide, 24/7 – WHY?

February 17, 2012 in Headline, Politics

By: Jacob Goodwin

FEMA is planning to award a 100% small business set-aside contract to a media monitoring firm that can monitor, archive and measure all local news in “major Nielsen markets,” all nationally broadcast news and all cable outlets for their news coverage of FEMA activities in the field across the U.S.

“To monitor the effectiveness of public affairs messaging, and respond to critical events, FEMA requires the ability to monitor and retrieve clips and transcripts from network and local television affiliates in a rapid manner upon demand 24/7 through an on-line distribution service,” explains the agency in a solicitation it posted online on Feb. 15.

The monitoring service will be expected to provide “media statistics including the audience exposure and publicity value” for that news coverage, said FEMA’s statement of work. It did not explain what it meant by “publicity value,” not did it indicate whether the selected monitoring firm would be expected to provide a subjective evaluation of the positive or negative nature of individual news reports.

FEMA’s office of external affairs is currently responsible for monitoring news coverage for its Joint Field Offices (JFOs) and its headquarters broadcast operations.

Read the rest of this entry →

Greece in Flames After Austerity Measures Pass

February 13, 2012 in Finance, Headline, Occupy, Politics, Update, World News

Numerous buildings were burned during the clashes in central Athens on Sunday. (PANAYIOTIS TZAMAROS/REUTERS) )

Fires raged in Athens overnight with reports that more than 40 buildings had been set ablaze in a violent response to the Greek parliament’s passage of an unpopular austerity package negotiated with its European creditors – the EU, ECB, and IMF – in exchange for a tranche of new bailout funds.

Reuters reports:

Cinemas, cafes, shops and banks were set ablaze in central Athens and black-masked protesters fought riot police outside parliament before lawmakers voted on the package that demands deep pay, pension and job cuts — the price of a 130 billion euro ($172 billion) bailout needed to keep the country afloat.

State television reported the violence spread to the tourist islands of Corfu and Crete, the northern city of Thessaloniki and towns in central Greece. Police said 150 shops were looted in the capital and 34 buildings set ablaze.

Altogether 199 of the 300 lawmakers backed the bill, but 43 deputies from the two parties in the government of Prime Minister Lucas Papademos, the socialists and conservatives, rebelled by voting against It. They were immediately expelled by their parties. [...]

The rebellion and street violence foreshadowed the problems the Greek government faces in implementing the cuts, which include a 22 percent reduction in the minimum wage — a package critics say condemns the economy to an ever-deeper downward spiral.

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My Journey from Iraq to Working on Wall Street to Occupy Wall Street

February 12, 2012 in Editorial, Headline, Occupy, Politics, World News

By Derek McGee

Photo Credit: edenpictures on Flickr

In late September 2001, I was living in a tent in Lower Manhattan with the 2nd Battalion, 25th Marines, a reserve unit just outside the city. We were occupying Battery Park, which at the time served as the National Guard’s headquarters. “Guarding the guard,” we called it.

The two weeks I spent there were profoundly affecting. There I was, at the center of the world, watching America at its finest, showing at once nearly impossible perseverance and limitless compassion. Generosity sprouted everywhere throughout New York City; people gave out food, shoe inserts, massages, coffee, flowers, hugs, kind words and anything you needed. I told someone I liked Red Bull, and hours later he came to my tent, dragging a handcart with eight cases of the stuff. I would slip one under each of the other marines’ pillows while they slept, and when we woke up for guard duty I would say the Red Bull fairy had come.

Exploring the city on my one afternoon off, I stumbled upon the Wall Street Bull. The smooth metal sculpture is stunning, always on the verge of some wild movement—a lunge or a charge, at the least, a bellow with a head toss. Too tarnished to be gold, too big to be a calf, it’s revered nonetheless. I would come fairly close to worshiping it myself years later. But for now, I just had my picture taken on top of it. From where I stood, the whole world seemed to feel empathy. It was one of the only times in my life that I felt like I was exactly where I needed to be.

Another time was when I was living under a bridge along the Euphrates River. A nearly ceaseless convoy rolled overhead. I wasn’t particularly keen on the invasion of Iraq, but if we had to have one, I knew I needed to be there with my fellow marines. A Subaru filled with reporters pulled up and offered us cigarettes to hasten our search of their car. “They’re just outside Baghdad,” they told us. The whole world is watching, I thought.

Read the rest of this entry →

Greece – leader urges lawmakers to pass austerity bill

February 12, 2012 in Finance, Headline, Politics, Update, Video Perspective, World News

Greek PM Lucas Papademos has warned parliament of “uncontrollable economic chaos” if it fails to approve a new austerity bill that will cut 15,000 public-sector jobs and lower the minimum wage by 20 per cent.

The Greek parliament is asked to take a historic responsibility, to examine and authorize the new economic program of Greece, the pre-condition for financing the country over the coming years,” Papademos said in a televised address on Saturday.

Read the rest of this entry →

Banks Walk, Dept. of Justice Makes Excuses

February 9, 2012 in Uncategorized

By the end of the S&L crisis, vast financial fraud had devastated the real estate market, contributed to the early-90′s recession, and banks have cost the US taxpayer $124 billion. Bad as this was, at least a reckoning was made: thousands of bank executives were prosecuted, and more than 1,000 went to jail.

This time around, vast financial fraud has wrecked the entire world’s economy, put millions of people out of work, and cost trillions of dollars. And how many banks execs have gone to jail?

Zero.

Gee, why not? The Wall Street Journal today lists the excuses explanations:

Since the financial crisis erupted in 2008, many legal experts have said the U.S. government faced an uphill battle in prosecuting financial-industry executives. Criminal intent is especially hard to prove in complex financial cases, because prosecutors must convince jurors, beyond a reasonable doubt, that a fraud was intentional.

Some financial executives have said it is unfair to punish them for what is nothing more than their failure to predict the financial crisis. Many legal experts have said much of the most controversial behavior likely was a product of poor judgment, not criminal wrongdoing.

Uh-huh. But maybe there’s a simpler explanation,  maybe banks aren’t all bad…:

Read the rest of this entry →

On the rocks: Greece may sink with all hands

February 6, 2012 in Finance, Headline, Politics, World News

By Richard Cottrell   –   endthelie.com

The Greek ship of state is close to the rocks, like the Italian mega-vessel Concordia which ripped itself apart on a sharp reef just over two weeks ago.

The captain apparently jumped ship instead of going down with it. We may shortly witness a repeat political performance in Greece, where the government demonstrates every sign of imminently capsizing.

For sure there is certainly no “concord” in the fractious Greek coalition headed by the Bilderberg/Trilateralist/EU regent Lukas Papademos.

Despite the endless predictions of agreements tomorrow, the day after, and the endlessly postponed “soon,” it is clearer by the hour that there is unlikely to be any binding deal on draconian austerity measures intended to precede the fabled €130 billion bailout.

Read the rest of this entry →

Europe coughing up cash for US military gamble in Iran

February 5, 2012 in Editorial, Finance, Headline, Politics, Video Perspective, World News

from  –  rt.com

Nimitz-class aircraft carrier USS Abraham Lincoln (CVN 72) transiting the Arabian Sea. (AFP Photo / Handout / US NAVY / MCS3 Will Tyndall)

Europeans should question why they are being asked to pay for an American-Israeli adventure in Iran during a time of unprecedented austerity, political analyst Chris Bambery told RT.

Iran says it will definitely put a swift stop to oil exports to “certain” European countries. A possible cut in supplies to other EU states is still under discussion.

The move comes in response to an EU oil embargo scheduled to come into force on July 1.

Read the rest of this entry →

Goldman Sachs is betting against European nations it is “advising”

February 3, 2012 in Finance, Headline, Politics, World News

By  David Smith  -  from EconomyWatch.com

Goldman Sachs: Masters of the Universe? Photo Credit: duke.roul

In part two of our feature on Goldman Sachs, we look at Goldman’s networks of power in Europe and consider the ways in which Goldman is using the same dangerous financial products, which caused the 2007 crisis, to bet against Europe’s floundering economies whilst governing, or advising those countries. Finally, we ask what can be done to reduce Goldman’s power.
The secret of Goldman Sachs’ power over the global financial system can be summed up in one word: Alumni. In his book, 13 Bankers, the former International Monetary Fund economist Simon Johnson argued that the relationship between Goldman Sachs and the US Government was so close in the run-up to the 2007 crisis, that the country was effectively “an oligarchy”.

Although European nations are not bought off by the banks in the same way as in the US, Johnson says that European financiers and politicians have formed alliances to perpetuate their mutual interests. Often, today’s European politicians have backgrounds in the financial sector, and more often than not connections to Goldman Sachs. The new prime ministers of Greece and Italy, for example, as well as the president of the European Central Bank, are all former investment bankers.