Markets in turmoil as Lehman collapses

[deja vu]

Bonus payments totaling $100 million to AIG employees from the same unit that prompted a massive taxpayer bailout are "outrageous" but allowed under the law, the Obama administration's pay czar said Wednesday.

Kenneth Feinberg said the retention bonuses were contractual obligations agreed upon years ago, before American International Group Inc. received a $180 billion federal rescue at the height of the financial crisis in late 2008. "These are the old grandfathered payments," Feinberg told ABC's "Good Morning America," adding: "I do not for a minute ignore the outrage out there, which I share. But the fact of the matter is we've got to abide by the law."


http://www.msnbc.msn.com/id/35222999/ns ... _business/


So why did Obama give them a financial bailout?

[CielOnTap]

Any hint that certain issuers of those government bonds and other borrowings are flirting with deadbeat status will jack up the interest rates bond-buyers will demand. That could easily lift the general level of interest rates worldwide. Which in turn would raise the cost of capital for businesses and individuals. And that would be a major impediment to economic recovery at a time when central banks are trying to keep their key lending rates at or near zero to encourage investment and job creation.

In order not to set off this "global debt bomb," as Forbes describes the plight on its latest cover, the EU and the better-off EU nations haven't much choice but to rescue Greece. Recalling how the failure of just one New York brokerage, in September 2008, turned a local banking problem into a full-blown global crisis, EU officials now regard Greece as "Europe's Lehman Brothers."

A coordinated EU bailout of Greece, spearheaded by Germany, would defend the value of the euro. It would bolster an EU whose reputation would otherwise suffer from having abandoned one of its members. And it could stave off a currency and debt crisis that would likely be a worldwide spectre.

http://www.thestar.com/news/article/761755--olive-will-greece-set-off-global-debt-bomb

A week ago, Spiegel was printing articles about Greece's finances, as well as those of other European nations. The matter seems quite worrisome.

I have to ask-how much of the Greek debt relates to staging the Olympic Games? http://www.greekembassy.org/Embassy/Content/en/Article.aspx?office=3&folder=200&article=14269

Alogoskoufis said that the largest proportion of expenditures was carried out in 2003 and 2004, noting that the initial forecast put the cost for the Olympic Games at 4.5 billion euro, while the overall cost (state and private funding) was estimated to reach 8.954 billion euro, not including the cost of projects that were completed or the construction of which were accelerated due to the Games, but which had been planned for construction regardless of the Games. Those projects included the Attiki Road highway, Athens' new Eleftherios Venizelos international airport, the tram, and the suburban railway. Of that 8.954 billion euro total, an estimated 7.202 billion was footed by the State, with the remaining 1.752 billion euro coming from the Athens 2004 Organizing Committee (ATHOC) and financed by the committee's revenues from ticket sales, television broadcast rights, Olympic-logo product sales, and sponsorships.

The European Union is putting pressure on Greece to work on its money woes: http://www.spiegel.de/international/europe/0,1518,675793,00.html

[CielOnTap]

'Economy needs ethics', pope says
Benedict underscores role of greed in global recession
10 February, 18:56

(ANSA) - Vatican City, February 10 - The economy needs ethics to survive the recession, Pope Benedict XVI said Wednesday in a return to a recurring theme in his addresses focusing on the need to rethink the global economy along moral lines.

''The global financial crisis has impoverished no small number of people,'' he stated during a general audience at the Vatican.

Underscoring the need to put ''people back at the center of economic decision-making,'' the pope said ''a new code of business ethics'' was required to usher in the transformation.

As an example, he pointed to the figure of St Anthony of Padua (1195-1231) who spent his life preaching against avarice and pride, two qualities Benedict blames for the recession. http://www.ansa.it/web/notizie/rubriche/english/2010/02/10/visualizza_new.html_1702423217.html

Wall Street: Money Never Sleeps is the sequel to the original film and is intended for an April release. How much will that film reflect the financial events of the past couple of years? Will greed have a leading role?

[Rhet-or-Ric]

.
I don't mean to give the Pope a hard time, but greed is sure not something new in the world.

Plus, there have been all sorts of financial "crises" since there has been such a thing as money. Tulips always come to mind when I think about a financial crisis. Might be the only thing I paid attention to in my first economics class, whenever that was. Can't even remember that.

And back to greed.

Whenever I think of money and greed I think of a bunch of gold that has been rumored over the years to have been hidden after that French king couldn't get his hands on it when he went after the Knights Templar, if that history lesson is archived in my brain correctly. Of course, I don't think I learned about that in a normal classroom.

Still, I suppose a Pope has got to do his job, and warning against greed is one part of his job, right?

As a matter of fact, speaking of history lessons, I now seem to recall that some of those church representatives were thought of as greedy a few centuries or so back. Not sure if that's archived in my brain correctly, either.

.

[CielOnTap]

As a matter of fact, speaking of history lessons, I now seem to recall that some of those church representatives were thought of as greedy a few centuries or so back. Not sure if that's archived in my brain correctly, either.

Actually, the gold gilding some Catholic churches/fixtures came from exploration expeditions and exploitation of native peoples to attain said precious metals. That is part of the reason that native peoples protested the 500th anniversary (1992) of Christopher Columbus' discovery (of the New World) as one of exploitation.

[CielOnTap]

"Greek Economy"

The Greek Government has to figure how to keep people employed but also work on recovering money from people who don't keep up with taxation.

There has to be some legacy from the 2004 Games to draw tourists in. The subway had been spruced up for the occasion--how does it look now, is it kept clean by commuters?

[CielOnTap]

Dubai govt drops preferred creditor status in debt talks
Reuters/Dubai
Monday22/2/2010February, 2010, 10:06 PM Doha Time

Dubai dropped plans yesterday to seek preferred creditor status in the restructuring of state-owned Dubai World, a reversal which removed a key stumbling block in talks with lenders.
It said the restructuring of some $22bn in debt would be “equal” for all creditors. A source said Dubai World will likely not repay a $980mn Islamic bond linked to its property unit Nakheel and due in May. Dubai debt talks

[manga2read]

Many digit accounting basically for that debt situation. The solution to getting the money likely will require the handover of some buildings or properties that lenders could then manage/own them or renovate them and sell, if spare cash is not at hand.

[CielOnTap]

Add one more person who sees a pattern in the stock market that signals a drop--it's about math and more.

Creator of feared market indicator the Hindenburg Omen explains coming market crash
Published On Thu Aug 19 2010
Lesley Ciarula Taylor
Staff Reporter
Even though his newly famous market indicator is ominously called the Hindenburg Omen, creator Jim Miekka says the coming crash is good news.

“I’m watching the numbers right now,” Miekka tells the Star from his summer home in rural Maine. “It looks like the probability of a decline. I would expect it would happen at the end of September, the beginning of October.”

When and if it does, the markets will present “a good buying opportunity,” he says.http://www.thestar.com/business/article/849909--creator-of-feared-market-indicator-the-hindenburg-omen-explains-coming-market-crash