The G7, inexplicably, announced that member finance ministers would convene for a conference call this afternoon. No other details emerged, but this seemed a bit unusual on the heels of the most recent G20 meeting a couple weeks ago. The Wall Street Journal reports that: "News of the conference call comes amid speculation that Spain might tap the EUR750 billion euro rescue fund set up to help euro-zone countries." And then Reuters published this report: "Spain sees credit squeeze but denies EU rescue bid" - here's the link: "You as well, Spain?"
The key feature of that news report is adamant denial by Spain's Treasury Secretary, Carlos Ocana. I believe that is at least the second or third time that Spain has officially denied the need to be financially bailed out. As per the old political adage: a rumor is just that until it's been officially denied three times - then it becomes fact. This is probably why gold was slammed from its overnight high of $1235.50 (August future) as soon as London trading commenced (usually they don't hit gold until the a.m. fixing, two hours into trading). It's also why gold was hit another $6 as soon as Comex trading commenced. The key event in this whole sequence is that gold rallied $7 from Friday's Comex settlement last night in Asian trading, indicating that Asia/India have resumed their physical buying.
In another Weimar-esque development, Obama asked Congress for $50 billion to give to the States in order to help keep public employees employed. This development of course occurred on Sunday, when very few people actually pay attention to the news. Please note that this $50 billion would be tossed on top of the more than $37 billion already given to States in order to fund jobless claims.
Can someone please explain to me why Obama is willing to spend $50 billion of printed taxpayer money to keep Government employees well-fed, while the private sector workers continue to face massive job losses? It grows more absurd by the day. At this point, I'm not sure what the bigger disaster is: the BP castastrophe or Obama's Presidency? Speaking of BP and Obama disasters...
It sounds like BP/Obama are negotiating to put some kind "fence" around BP's total liability for cleaning up the Gulf. I have yet to see any estimates of the cost, so I'm not sure why Obama would be willing to cap BP's exposure. Rest assurred, the Taxpayer will be paying for the rest, and thus probably the bulk of the clean-up cost. This is one time that I'm really cheering for the class-action lawyers to bury a big corporation in damage litigation.
Monday, June 14, 2010
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take a look at the BP balance sheet--not all that much liquidity there -maybe 10 billion which is 20% of the new 50 bil for teachers printing (and several hundred thousand locked up votes for the DEMs).
ReplyDeleteAnd tie in holders statement past week that not one cent of taxpayer money will be spent on the clean up. He must be using Madoff style accounting. Perhaps he thinks a higher tax on oil companies will not be borne by the taxpayer, which incidently that base gets continously smaller.
Now--if Obama succeeds at getting say 10 bil put aside, does he as an Atty get 40% plus expenses?
Once you start bullshitting it keeps getting piled higher and deeper.
Good color Hal. Wish I had time to pick thru BP's 10k/footnotes. But hey, BP is doing god's work.
ReplyDeleteI just looked at the balance sheeet and gleaned the amount of liquidity. I am certain if we read the 10k the actual situation worsens.
ReplyDeleteWonder how many other "accidents waiting to happen" are out there for BP? That would not be on 10k
incidently we had a friend from Florida stay with us this weekend. She told us of how people who had bought the last 3 years have simple left keeps on counter and walked away. Now HOA's getting tight on cash. These are nice gated and manned communities with high maintenance costs such as for clubhouse, pools, etc. Not so affordable now,.
south florida will eventually be a haunted house of squatters and vagrants. just wait until that oil starts throwing up on the shores of Naples and those nice little islands off the west coast.
ReplyDeleteIt's the least of our worries, and hardly something to be mourned, but this catastrophic event stands a very good chance of bringing down the Obama Administration.
ReplyDeleteIt's shocking how poorly he's managing this crisis. But then again we all ignored the criticisms - and the media buried such criticisms - about Obama not having real leadership experience of Governmental management experience. Hell, even W and Palin were State Governors, for what that was worth.
ReplyDeleteI hadn't noticed the SPAIN news until now. I had just been looking at the gold price.
ReplyDeleteI figured their must be some doozy of a crisis for gold to be hit so hard and the attempt a a rally in the price to be hammered.
Sure enough, the printing presses will be put in overdrive, better hammer gold.
What BS!
Yup. Check out this research paper just released by Janet Yellin's FRB branch:
ReplyDeletehttp://www.zerohedge.com/article/san-francisco-fed-makes-case-zirp4eva-says-no-need-fix-feds-bloated-balance-sheet
dave--what do you mean we ignored the critisms
ReplyDeleteGood point Hal. You were a skeptic from the beginning, rightfully so. I recall vividly. I was so hungry to get rid of W and his people that I overlooked the obvious w/Obama. Although, I will say that during the final week, if McCain has real running mate instead of the mongoloid-producing retard, I might have shifted allegiance...
ReplyDeleteKrugman had just written an article yesterday that the "markets" liked the Spain printer option better than the Ireland cut spending plan based on CDS/bond yields. What a clown. Maybe he was a juggling clown in college?
ReplyDelete"Mahoney, what kind of a clown do you think I am"
"A juggling clown sir??"
Police Academy
LOL - great analogy GYC. One of the big mysteries of modern economic is how the hell did Krugman get a Nobel Prize? He seriously borders on retardation.
ReplyDeleteto me, McCain and Palin was a throw away ticket. The Bush issues put the Republicans behind the 8 ball. And I never was impressed with McCain and the best I came up with was WTF on Palin. That was like a Doug Flutie hail Mary.
ReplyDeletePoliticians in general have a passion for themselves and their agenda--not whats right for the US as a whole.
David Axelrod probably has more power than Rahm--if you can believe a PR guy is probably running the show. This is more like the movie "Wag the Dog" which was a pretty good knock on the Clinton Adm.
Someone named "Bob" sent 3 great comments on BP and I can't the find them. Bob, if you are out there, let me know which post of mine under which you sent in those comments so I can cut and paste them under my most recent post.
ReplyDeleteThanks