November 2012 archive

Euro Zone, IMF Reach Deal to Cut Long-Term Greek Debt

By REUTERS

Published: November 26, 2012 at 8:39 PM ET

The IMF’s share, less than a third of the total, will only be paid out once a buy-back of Greek debt has occurred in the coming weeks, but IMF Managing Director Christine Lagarde said the Fund had no intention of pulling out of the program.

To reduce Greece’s debt pile, ministers agreed to cut the interest rate on official loans, extend their maturity by 15 years to 30 years, and grant Athens a 10-year interest repayment deferral.

They promised to hand back 11 billion euros in profits accruing to their national central banks from European Central Bank purchases of discounted Greek government bonds in the secondary market.

They also agreed to finance Greece to buy back its own bonds from private investors at what officials said was a target cost of around 35 cents in the euro.

…

Germany and its northern European allies have hitherto rejected any idea of forgiving official loans to Athens, but EU officials believe that line may soften after next year’s German general election.

Schaeuble told reporters earlier that debt forgiveness was legally impossible, not just for Germany but for other euro zone countries, if it was linked to a new guarantee of loans

…

A source familiar with IMF thinking said a loan write-off once Greece has fulfilled its adjustment program would be the simplest way to make its debt viable, but other methods such as forgoing interest payments, or lending at below market rates and extending maturities could all help.

…

No figures were announced for the debt buy-back in an effort to avoid triggering a rise in market prices in anticipation of a buyer. But before the meetings, officials had spoken of a 10 billion euro buy-back, that would achieve a net reduction of about 20 billion euros in the debt stock.

How the official sector restructures, Greece edition

Felix Salmon, Reuters

Nov 27, 2012 14:36 UTC

This deal isn’t just the latest chassé in the long dance between Greece and its creditors; it’s a blueprint for every other European country with unsustainable official-sector debts as well. Including Greece itself, which will surely require another deal like this down the road. And it encapsulates the big difference between the way the private sector likes to deal with big debts, in contrast to the way the official sector does it.

The private sector likes a big one-and-done deal, where you start with a massive debt stock, and then you swap it for something smaller. The key number is the “NPV haircut”: the value of a bond is the net present value of its future cashflows, and so a big cut in coupons, or a terming out of interest payments, can be just as drastic, from a bondholder’s point of view, as a cut in principal. There’s nothing sacred about principal: what matters is the mark-to-market value of the bond.

The official sector, by contrast, holds principal highly sacred. That allows the Germans and others to say that they aren’t forgiving any debt; it also means that no national parliament needs to ratify a bill writing off any Greek debt. On the other hand, the official sector is happy to term out maturities until, as Buchheit puts it, the 12th of never, and also cut coupon payments at the same time.

…

This is the big difference between the private sector and the official sector. The private sector, if it’s owed $1 billion on April 15, expects $1 billion on April 15, whether the debtor can really afford it or not. Failure to make that payment is a default, and if default is a real possibility, then there’s certainly no way the private sector will lend the country new money to make the payment.

The official sector, in contrast, if it sees a big $1 billion payment due on April 15, will simply term it out for a few years. That doesn’t impair the value of the asset on any official-sector balance sheet: it was $1 billion before, and it’s still $1 billion. And so it doesn’t really help with respect to anybody calculating Greece’s debt-to-GDP ratio, since the nominal amount of debt outstanding never actually does down. But in reality, Greece’s ability to manage those debts is much greater than it would be if the debts were mostly private. Because the official sector, deep down, in its heart of hearts, doesn’t actually expect to ever be repaid.

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

Wednesday is Ladies’ Day

Follow us on Twitter @StarsHollowGzt

Amanda Marcotte: Sorry, John McCain, But Anti-Choicers Are Judged on Actions, Not Words

This video of John McCain on Fox News Sunday morning is getting a lot of traction, because it seems like he’s telling Republicans to back off their opposition to abortion rights.

But as with Bobby Jindal before, if you actually listen to what he’s saying, he’s not actually telling Republicans to make substantial changes to either what policies they advocate for or even necessarily telling them to tone down their actual passion for stripping women of their reproductive rights. He’s just telling them to be quiet about it, and hope the voters don’t notice.

Ana Marie Cox: Fiscal cliff hype and the future of Grover Norquist’s taxpayer pledge

The renewal of President Obama’s mandate showed Americans favour a more complex solution to US debt than just ‘no’ to taxes

There are many the similarities between Los Angeles and Washington, DC (the most true one having to do with DC being “Hollywood for ugly people), but the hullabaloo around the “fiscal cliff” – technically, a snorefest of sequestration agreements – brings to mind the importance of raising the stake every time you make a sequel. Just as the non-specific excitement of “Star Wars: A New Hope” gave way to the menace of “The Empire Strikes Back”, and then the personal vengeance promised by “The Return of the Jedi”, so must the muscular comity of the “supercommittee” morph into a joined-at-the-hip leap off the “fiscal cliff” – which, itself, in the manner of all trilogies, is followed by more of the same but with bigger explosions: that is, “Taxmaggedon.” [..]

If nothing else, Washingtonians’ hyperbole has proven another LA maxim: violence is good for ratings. More Americans followed the debate over the sequestration package than they did the Petraeus’ own euphemistic scandal. Or at least, that’s what they told Pew Research.

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future

Find the past “On This Day in History” here.

November 28 is the 332nd day of the year (333rd in leap years) in the Gregorian calendar. There are 33 days remaining until the end of the year.

On this day in 1970, George Harrison’s “My Sweet Lord” is released.

Yes, it’s true. If the White House would like to disavow David Plouffe’s words now is the time. Time is running short but it’s pretty obvious that he speaks for the White House given that David Plouffe is the President’s closest confidante. If you have the stomach to sit through this forum it’s right there for you to see, but I’ll post the relevant portion that matches up with Lloyd Blankfein’s mentality that the 99% need to sacrifice Medicare and retire later for the fantasy deficit crisis he, the White House, and Congress are peddling to the American people.

The President’s closest adviser is telling his base that additional cuts to pay down the deficit(not the 716 billion to Advantage, fraud, or providers from the 2010 CBO baseline on the effects of the ACA) in Medicare and Medicaid are coming and to be ready for them.

Senior White House advisor David Plouffe warns Republicans and Democrats alike must take political hits in order for deal to be had

“The only way that gets done is for Republicans again to step back and get mercilessly criticized by Grover Norquist and the Right, and it means that Democrats are going to have to do some tough things on spending and entitlements that means that they’ll criticized on by their left,” Plouffe said at his alma mater in conversation with former McCain campaign manager Steve Schmidt.

[………]

Plouffe added that while the White House wants to engage in comprehensive tax reform, they know they must also “carefully” address the “chief drivers of our deficit”: Medicare and Medicaid.

Lloyd “Sell them shitty deals with the blessing of the US DOJ” Blankfein whole heartedly agrees with Plouffe. He’s also visiting the White House today. I have a feeling whatever good feelings labor and progressive groups had yesterday were perhaps misguided given the statement we just heard from David Pouffe. That and of course basically the priority of making capital whole on the backs of labor as 93% of the “recovery” goes into Lloyd Blankfein’s pocket since 2010.

Goldman Sachs CEO: Entitlements must be contained

BLANKFEIN: You’re going to have to undoubtedly do something to lower people’s expectations — the entitlements and what people think that they’re going to get, because it’s not going to — they’re not going to get it.



PELLEY: Social Security, Medicare, Medicaid?

BLANKFEIN: You can look at history of these things, and Social Security wasn’t devised to be a system that supported you for a 30-year retirement after a 25-year career. … So there will be things that, you know, the retirement age has to be changed, maybe some of the benefits have to be affected, maybe some of the inflation adjustments have to be revised. But in general, entitlements have to be slowed down and contained.

‘Cannibal cop’ planned to kidnap, eat woman for Thanksgiving: prosecutor

By BRUCE GOLDING, The New York Post

8:48 AM, November 21, 2012

Forget white meat or dark meat – he wanted “girl meat” for Thanksgiving.

Gilberto Valle, the NYPD officer busted by the feds as an alleged cannibal wannabe, saw his alleged holiday hopes dashed yesterday when prosecutors said he’d planned to dine on human flesh tomorrow.

…

Public defender Julia Gatto argued that Valle’s online chats were only “sick, twisted” sexual fantasies he shared on the Web with like-minded fetishists.

Gatto said her own, reluctant investigation into her client’s “subculture” – which she likened to “Star Trek geeks and science-fiction movie guys who dress up and go to conventions” – had apparently uncovered the site Valle frequented.

“All over the Web site, it says: No matter how real this sounds, this is all fantasy,” she insisted.

It is well known that we now have the problem relatively under control.

Man pleads not guilty to cooking wife

UPI

Published: Nov. 22, 2012 at 8:51 AM

VISTA, Calif., Nov. 22 (UPI) — A California man pleaded not guilty to the murder of his wife, who police found dismembered, with body parts cooking on the stove and her head in the freezer.

…

Police found three pans of “meat” cooking on the stove and realized it was pieces of the victim, Anna Faris, 73, Deputy District Attorney Katherine Flaherty said. They found Faris’ head in a plastic bag inside the freezer and multiple pieces of freshly cut bone throughout the house.

“They also found a work area set up in the bathroom, with saws, a boning knife and other cutting instruments,” Flaherty said.

“There is no evidence of cannibalism at this time,” she added.

Millions chase record $425M Powerball jackpot

By JEFF McMURRAY, Associated Press

18 minutes ago

It’s the gambler’s mantra: Somebody’s gotta win, so why not me?

…

It’s true to say that you have a better chance of being struck by lightning than winning the Powerball. But that woefully understates the danger of lightning.

Tim Norfolk, a University of Akron mathematics professor who teaches a course on gambling, puts the odds of a lightning strike in a person’s lifetime at 1 in 5,000 (or 1 in 9 million on one particular day). The odds of winning the Powerball jackpot: 1 in 175 million – with no assurances that you won’t have to split the prize with others.

…

While it may seem counterintuitive, Barrow (Clyde Barrow, professor director of the Center for Policy Analysis at UMass-Dartmouth) says gambling activity often increases as the economy gets worse and people have less disposable income. However, his research – which focused mainly on New England – found the trend reversed in the latest downturn.

“The Great Recession has been so deep and so long, it’s suppressed any kind of discretionary spending across the board,” said Barrow, who added about the same percentage of people are playing the lottery – they’re just buying fewer tickets.

…

“For 2 bucks, it’s worth a chance,” he said. “What else am I going to do with that $2? I’ll just waste it on something else.”

While Republicans at the federal level appear to understand that they have a huge demographics problem with Latino and women voters, the lesson of the loss has failed to reach the Republicans at the state level. As Rachel Maddow explains in states where Republicans control the legislature and governorship, they are taking further steps to pass legislation that cracks down on undocumented immigrants, gay rights and women’s access to abortion and reproductive health care:

But where Republicans are really in control of government, as in Kansas for example, Maddow said the party is taking steps to “crack down on immigrants who want to go to college.” She also said that the Republican leadership in Indiana is moving to add a constitutional ban on gay marriage to the state constitution-in a state where gay marriage is already illegal. In Ohio, Maddow said, one of the first things the state government did after the November election was hold a hearing on defunding Planned Parenthood. [..]

Maddow added that Republicans at the state level are still “waging wars” on issues like immigration, abortion, and gay marriage, even though members of the party seem to be saying otherwise on a national level. Speaking of the differences between Republican messages, Maddow said, “Somebody should tell the Beltway, or maybe it’s funnier if we don’t.”

Keep in mind some of these same Republican governors, like Wisconsin’s union and women hating Scott Walker and Louisiana’s creationist Bobby Jindal, are considered top contenders for the 2016 presidential ticket. And you thought they couldn’t do worse that Mitt Romney.  

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

Follow us on Twitter @StarsHollowGzt

New York Times Editorial: Leadership at the S.E.C.

In appointing Elisse Walter, a Democratic commissioner at the Securities and Exchange Commission, to serve as the agency’s next chairwoman, President Obama appears to be aiming for continuity when Mary Schapiro, the current chairwoman, steps down next month.

That’s understandable on one level. With markets especially touchy in fear of the so-called fiscal cliff, now is no time to leave the agency with an interim chief. By elevating Ms. Walter, Mr. Obama ensures that she has the full power of the position, while leaving open the door to nominate someone else later, as he is expected to do. Seen in that light, Ms. Walter is a place holder, but with authority.

But on another level, the naming of Ms. Walter is problematic. The S.E.C. badly needs to be revitalized, not held to its present course.

Joe Nocera: Obama’s New Cabinet

Is that really whom President Obama named on Monday to be the new chairwoman of the Securities and Exchange Commission? A woman who has been at the S.E.C. for the last four years? And, to boot, someone practically joined at the hip with her predecessor, Mary Schapiro? Say it ain’t so, Mr. President.

No doubt, Commissioner Walter is a fine public servant. What she is not, however, is a fresh face with new ideas. And isn’t that half the point of second-term appointments? They give a president a chance to name cabinet or agency directors who can breathe new life into their departments. Second-term appointments are presidential do-overs.

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future

Find the past “On This Day in History” here.

November 27 is the 331st day of the year (332nd in leap years) in the Gregorian calendar. There are 34 days remaining until the end of the year.

On this day in 1703, a freak storm over England, that had begun around November 14, peaks.

The unusual weather began on November 14 as strong winds from the Atlantic Ocean battered the south of Britain and Wales. Many homes and other buildings were damaged by the pounding winds, but the hurricane-like storm only began doing serious damage on November 26. With winds estimated at over 80 miles per hour, bricks were blown from some buildings and embedded in others. Wood beams, separated from buildings, flew through the air and killed hundreds across the south of the country. Towns such as Plymouth, Hull, Cowes, Portsmouth and Bristol were devastated.

However, the death toll really mounted when 300 Royal Navy ships anchored off the country’s southern coast-with 8,000 sailors on board-were lost. The Eddystone Lighthouse, built on a rock outcropping 14 miles from Plymouth, was felled by the storm. All of its residents, including its designer, Henry Winstanley, were killed. Huge waves on the Thames River sent water six feet higher than ever before recorded near London. More than 5,000 homes along the river were destroyed.

Eddystone Lighthouse is on the treacherous Eddystone Rocks, 9 statute miles (14 kilometres) south west of Rame Head, United Kingdom. While Rame Head is in Cornwall, the rocks are in Devon.

The current structure is the fourth lighthouse to be built on the site. The first and second were destroyed. The third, also known as Smeaton’s Tower, is the best known because of its influence on lighthouse design and its importance in the development of concrete for building. Its upper portions have been re-erected in Plymouth as a monument.

The first lighthouse on Eddystone Rocks (first picture above) was an octagonal wooden structure built by Henry Winstanley. Construction started in 1696 and the light was lit on 14 November 1698. During construction, a French privateer took Winstanley prisoner, causing Louis XIV to order his release with the words “France is at war with England, not with humanity”.

The lighthouse survived its first winter but was in need of repair, and was subsequently changed to a dodecagonal (12 sided) stone clad exterior on a timber framed construction with an Octagonal top section as can be clearly seen in the later drawings or paintings, one of which is to the left. This gives rise to the claims that there have been five lighthouses on Eddystone Rock. Winstanley’s tower lasted until the Great Storm of 1703 erased almost all trace on 27 November. Winstanley was on the lighthouse, completing additions to the structure. No trace was found of him.