Diary of a Financier

Top Newsstuffs (May 14-20)

In Bookshelf on Sun 20 May 2012 at 06:26

Facebook (FB) IPO with a kicksave and a beaut’ to defend this market into the weekend close.  While mine eyes have stuck to the Eurocrisis for over two years now–with nary a blink, I might add–the volume of Euro-centric items in these Top Newsstuffs communicates the mainstream’s renewed focus on the drama.  Enjoy…


Crude Oil Inventories at 21-year High | The Big Picture
Bottleneck in Cushing, Oklahoma storage hub since pipeline infrastructure ill-equiped to handle modern volumes of outflows from domestic supply.

KONY 2012 | YouTube
Campaign to save Uganda’s Invisible Children from guerilla terrorist Joseph Kony.

Comprehensive Guide to Greece: Exit and Eurozone Impact | Bank of America Merrill Lynch
Greece will likely only meet half of its revenue target, so “Greek authorities may decide to meet payments only for salaries, pensions and debt servicing…
“ECB is exposed to Greece through two channels, repo operations of various maturities and emergency liquidity assistance (ELA). The respective amounts are €109bn and ~€60bn. Should Greece default, we think it is highly likely that the ECB would terminate the repo operations. And, the ECB could veto the ELA, which would cause the Greek banks to run out of liquidity…
“ECB’s LTRO policy responses have only worsened the situation as banks have pledged what’s left of the quality paper in Europe in exchange for ECB loans…
“Worse than Lehman… cost Eurozone 4% of GDP.”

Competition Is Killing Higher Education (Part 1) | Bloomberg
Richard Kneedler, former president of Franklin & Marshall, estimated in 2009 that an astonishing two-thirds of the 700 private colleges he studied were at risk of financial failure.

The History of Glass Steagall (The Banking Act of 1933) | The Big Picture

China’s Economic Update: Real Estate & GDP | Mish Shedlock
Chinese builders rushed projects to completion in 1q12, now the pipeline is dry, shaving as much of 2.5 percentage points off GDP.

ECB Stops Loans to Some Greek Banks as Draghi Talks Exit | Bloomberg
ECB said it will temporarily stop lending to some Greek banks to limit its risk as President Mario Draghi signaled the ECB won’t compromise on key principles to keep Greece in the euro area.

Japan Reports 1q12 GDP | Bloomberg
GGP growth of 4.1% y/y (v 3.5% Expected), 1.0% q/q on Earthquake Reconstruction.

Several on FOMC Said Easing May Be Needed If Recovery Falters | Bloomberg
“A loss of momentum in growth or increased risks to our economic outlook could warrant additional action to keep the recovery going,” minutes of FOMC April 24 meeting showed.

Presentation: The Outlook of Global Agriculture | Deere & Co (DE)
Increase 2012/13 commodity price & crop yield estimates. Eurocrisis concentrated in non-agricultural Southern Europe has little effect.

Mortgage Principal Reductions Weighed for Fannie, Freddie | Bloomberg
Conservator of FNMA & FRE may let servicers writedown mortgage principal to 63 cents/dollar as part of California effort to use unspent TARP money. FHFA opposes plan.

Merkel’s First Hollande Meeting Yields Growth Signal for Greece | Bloomberg
Agree to help Greece overcome structural growth issues if voters adhere to austerity required by bailouts & Euro membership. At June summit “everything needs to be put on the table,” including investment spending & joint euro-area bonds, said Hollande.

Immediate Losses from Greek Exit Could Reach €400 Billion | J.P. Morgan
Estimate €400B in total losses from Grexit: ‘€240bn from Greek debt in official hands (EU/IMF), €130bn from TARGET2, and ~€25bn for European banks.’
Contagion could target Spain & Italy next: ‘€800bn Italian & Spanish government bonds (external), €500bn corporate bonds, and the €300bn in quoted equities.’

Has The Greek Bank Run Started? | ZeroHedge
President Karolos Papoulias said Greeks withdrew as much as €700mm ($893mm) from the nation’s banks since the May 6 election. Banks had ~€170B deposits & €250B loans as of March. Greece is shut out from external funding, with only liquidity source the €65 left in ECB’s ELA but no collateral to pledge.

De La Rue (DLAR-LN) | Peter Boockvar
DLAR produces currency, passports, licenses, stamps, etc. for 150+ countries, including Greece. DLAR already at 52-week highs, will rocket higher if Greece leaves Euro for Drachma.

Interview: Daniels Pavluts (Latvian Minister of Economics) Explains How Latvian Austerity Worked, but Won’t for the Eurozone | Business Insider

Eurodämmerung: The Whole Eurozone Could Unravel in a Matter of Months | Paul Krugman
Globally viral post (#QueDiceKrugman) says Greece could leave EMU in June, triggering bank runs in Italy & Spain that will make Germany choose between bailouts and bailing out.

China Cuts Reserve Requirement Ratio (RRR) from 20.5% to 20.0%, Joins Reflation Race | ZeroHedge

Germany Begins Quantifying Cost of Greek Exit from Euro, Discovers Contingent Liabilities Are All Too Real | ZeroHedge
If Greece leaves EMU, analysis finds €76.6B in German losses fm preexisting bailouts, plus additional contingent liabilities (32-56% of GDP) fm subsequent expansion of EFSF needed to stem contagion.

Europe Blinks: Troika Willing to Change Six Terms of Greek Bailout Deal | ZeroHedge




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