Goodbye Greece?

Baltic Dry Index. 3020 +07

LIR Gold Target by 2019: $3,000.

“When you combine ignorance and leverage, you get some pretty interesting results.”

Warren Buffett.

For the latest on Goldman jump straight to Crooks Corner, but from far away London, it looks to me that God has just switched sides or perhaps it wasn’t “God’s work” after all. From the latest email releases, and I’ve got to think that the Senate committee has yet more damaging emails to release, today’s Bankster v Senator battle of the odious versus the loathsome promises to be riveting TV. If the Chief Squid and the “Fabulous Fab” make any serious errors in front of the “Comité de salut public” it will soon be guillotine time among the great vampire squids back in New York.

“It’s morally wrong to let a sucker keep his money.”

W.C. Fields.

Below, pity the poor tax and work shy Greeks. After years of partying and Lehman style accounting advised by the great vampire squids, they’ve run out of talent and cash and become a hapless football in far away Germany’s domestic politics. Is debt slavery bad or what? Where’s a great vampire squid when you really need one? Below, Germany puts the boot in. Perhaps it wasn’t a good idea last month for Greece to bring up the war and stolen gold.

Merkel Tells Greece, Euro Region That Bailout Isn’t a Done Deal
April 27 (Bloomberg) -- German Chancellor Angela Merkel hit the campaign trail with a warning to Greece and the rest of the euro region that a bailout of the debt-stricken nation isn’t a done deal.

“I’ve said for weeks that Greece must do its homework first,” Merkel said late yesterday, drawing applause from an audience in the town of Soest in North Rhine-Westphalia, where state elections are due on May 9. She said that while Germany is prepared to release funds for debt-stricken Greece, “first I want to see the program.”

-----Merkel dwelled on Greece at yesterday’s rally as her Christian Democrats defend their hold on the state, saying any rescue would have the aim of supporting the euro rather than bailing out a Greek state that lived beyond its means.

“We’re not doing this because we believe Greece needs help,” she said. “We’re doing it because we’re interested in the euro’s stability. We can’t idly stand by when our currency comes under threat.”

-----In Greece, Prime Minister George Papandreou will today brief lawmakers on the economic outlook at 10.30 a.m. local time. Transport workers will hold a strike and the ADEDY civil service union stages a rally at 6.30 p.m. GSEE, Greece’s biggest private-sector union, will also decide on whether to go on strike.

------A defeat for Merkel might wipe out her coalition’s majority in the upper house of the national parliament and hamper her government’s efforts to cut taxes and extend the life of German nuclear power plants.

Merkel told the rally she wants Greece to agree to several years of budget cuts before releasing any German aid. “Greece has put savings measures into effect this year, but one year won’t be enough” to restore confidence in the financial markets, she said.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aTxZ2H7c4iP4&pos=9

Below, the next Greece stumbles into view in Club Med. Those hard working, tax paying Germans are just going to have to work a whole lot harder and pay many more taxes if the Portuguese way of life is to be maintained.


Portugal Suffering Greek Contagion Puts Pressure on EU Markets
April 27 (Bloomberg) -- Portugal risks becoming the new Greece.

With a higher debt burden and a slower 10-year growth rate than Greece, Western Europe’s poorest country is being punished by investors as the sovereign debt crisis spreads. The risk premium on Portuguese bonds rose to more than double the past year’s average this month. Portugal’s credit default swaps show investors rank its debt as the world’s eighth-riskiest, worse than for Lebanon and Guatemala.

-----Portuguese Prime Minister Jose Socrates’ push to convince investors his country will avoid Greece’s fate is being hobbled by an economy that’s expanded less than an annual average of 1 percent for a decade and is reliant on tourism and industries such as cork and pulp.
While Portugal’s public debt of 77 percent of gross domestic product is on a par with that of France, the burden including corporate and household debt exceeds that of Greece and Italy, at 236 percent of GDP. The savings rate is the fourth-lowest among 27 members of the Organization of Economic Cooperation and Development, according to the Paris-based group’s data.

No Growing

“The reason we’re concerned about Portugal is not because its public sector debt ratios are excessively high, it’s more that the Portuguese economy doesn’t really grow,” said Kenneth Wattret, chief euro region economist at BNP Paribas SA in London.

EU policy makers’ difficulty in containing the Greek crisis is stoking the threat of contagion, just as the near-collapse of Bear Stearns Cos. in 2008 undermined other U.S. banks, exacerbating the credit crisis.

The risk for Portugal is that investors who are trying to protect their portfolios from a Greek-like rout will dump holdings of small euro countries, such as Portugal. Once that happens, surging bond yields could put Portugal in the same spiral that Greece is trying to escape.
‘Conspicuously Vulnerable’

Portugal is among countries that are “conspicuously vulnerable” and may need a bailout, said Kenneth Rogoff, a professor at Harvard University in Cambridge, Massachusetts, in a telephone interview.
http://www.bloomberg.com/apps/news?pid=20601087&sid=axf0_6ZHyUNg&pos=4

Below, don’t just sit there do something! In the panic to get US home sales moving again someone thought up another subsidy ruse. Not to worry, it’s only fiat money after all, and there’s plenty more where that comes from, why not just add it to the national debt. What could possibly go wrong? Sooner or later, and my money is on sooner as in 5 years or less, I suspect that we are about to find out. Stay long gold and silver, but on an allocated basis outside of John Bull and Uncle Sam’s reach. Any idea what a four year old does with a house?

“For some reason, people take their cues from price action rather than from values. What doesn’t work is when you start doing things that you don’t understand or because they worked last week for somebody else.”

Warren Buffett.

Home Tax Credit Called Successful, but Costly
By DAVID KOCIENIEWSKI
Realtors, home buyers and sellers are rushing to complete sales agreements before the tax credit for home purchases expires this week.

Home buyers must have a deal by April 30 and close by June 30 to qualify for the federal tax break, up to $8,000 for first-timers and $6,500 for those merely moving to a different residence.

Though the Treasury Department and the real estate industry have termed the program a success, helping 1.8 million people buy homes, many tax policy experts say it has been singularly cost-ineffective: most of the $12.6 billion in credits through end of February was collected by people who would have bought homes anyway or who in some cases were not even eligible.
The credit has caused a surge in sales and has been widely lauded for helping to stabilize prices. In places like Lafayette, Ind., where the number of homes sold in March was up 48 percent over last year, real estate agents say they have been inundated with buyers like James and Aubrey Green, students at Purdue University, who said the credit had persuaded them to jump into the market.

“We were happy in our apartment, but $8,000 was just too much to pass up,” said Mr. Green, 29, who shopped furiously with his wife for two months before signing a contract in March to buy a three-bedroom ranch.

“We bid on a couple places that didn’t work out,” he said, “but we always made sure we had a backup plan because we didn’t want to miss the deadline for the credit. And when we finally agreed to a contract, it was this huge relief.”

For every home buyer like the Greens, real estate agents say there are at least three others who collected the credit even though they would have bought without it. That means for each new buyer who was truly lured into the market by the credit, the federal government paid more than $30,000.

In addition to legitimate buyers, tens of thousands of people who collected the credit were not qualified. An audit by the Treasury Department’s inspector general released last year found that hundreds of millions of dollars in credits went to people who had not yet bought homes or who were not first-time home buyers, as the program initially required.

Hundreds of others who received the credit were not old enough to sign a binding contract, the audit found, with some as young as 4 years old.
http://www.nytimes.com/2010/04/27/business/27home.html

“Should you find yourself in a chronically leaking boat, energy devoted to changing vessels is likely to be more productive than energy devoted to patching leaks.”

Warren Buffett.

At the Comex silver depositories Monday, final figures were: Registered 51.25 Moz, Eligible 64.22 Moz, Total 115.47 Moz.


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Crooks & Scoundrels Corner.

The bent, the seriously bent, and the totally doubled over.

“It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently.”

Warren Buffett.

Let the games begin. It’s Bankster v Senator time in Washington D.C. It’s hard to find a side to root for. Below, more on how Goldman treated its “clients.” The US tort bar will pore over every word, nuance, and shifty glance. The great vampire squid seems to have skipped ethics 101, and opted instead for looting rape and pillage, the advanced course. Would you knowingly buy a used car from a present or former great vampire squid? When the salesman from Goldie calls, hang up!!! Governments all around the planet will now be relooking at deals that involved Goldman to see just how bad a deal they made. If it wasn’t so serious this would be really funny.

“First, many in Wall Street – a community in which quality control is not prized – will sell investors anything they will buy.”

Warren Buffett.

Goldman Sachs CDO Labeled ‘Shi**y Deal’ by Montag
April 26 (Bloomberg) -- Thomas Montag, the former head of sales and trading in the Americas at Goldman Sachs Group Inc., called a set of mortgage-linked investments sold by his firm “one shi**y deal,” according to an excerpt from internal e- mails released today by Senate lawmakers.

The transaction was Timberwolf Ltd., a $1 billion collateralized debt obligation holding pieces of other CDOs, according to a statement today from the Permanent Subcommittee on Investigations. The CDO also included optimistic side-bets on the performance of CDOs, or derivatives, in which the firm took the opposite pessimistic side in “many” cases, the panel said.

“Boy that timberwo[l]f was one shi**y deal,” Montag, who is now Bank of America Corp.’s president of global banking and markets, said in a June 22, 2007, e-mail to Daniel Sparks, who ran Goldman Sachs’s mortgage business at the time, according to the panel’s statement. Within five months of Timberwolf’s debut, the CDO had lost 80 percent of its value, and it was liquidated in 2008, according to the panel.

The CDO was among securities that Goldman Sachs sold to clients after deciding the New York-based firm needed to reduce its mortgage holdings, Carl Levin, a Michigan Democrat who leads the panel, said in the statement.

----- Montag, now 53, didn’t respond to a request for comment and Bank of America spokeswoman Jessica Oppenheim had no immediate comment. Blankfein, 55, will tell the panel his firm didn’t wager against clients, according to a prepared text of his remarks.

“We respectfully disagree with Chairman Levin’s statement,” according to an e-mail from Goldman Sachs spokesman Lucas van Praag. “We did not have a big bet against the housing market, as our performance in residential mortgages demonstrates, and we believe we at all times worked appropriately with our clients. We did try to manage our risk, as our shareholders and regulators would expect.”

The Timberwolf CDO was issued in March 2007, following a Goldman Sachs quarter that ended February 2007 in which one department of the bank shifted from $6 billion of bets that mortgage bonds would perform to $10 billion they would default, according to Bloomberg data and information the panel released.

----- Bear Stearns Asset Management, the manager of two hedge funds overseen by Ralph Cioffi whose collapse in June 2007 roiled global markets, was among the buyers, purchasing about $300 million, according to the committee.

Sparks, who left the bank in 2008, in one e-mail urged “personnel working on a potential Korean sale to ‘[g]et ‘er done,’ and sent a mass e-mail to the sales force promising ’ginormous credits’ for selling” the debt, according to Levin’s statement. “A congratulatory e-mail was sent to an employee who sold a number of the securities: ‘Great job … trading us out of our entire Timberwolf Single-A position,’ ” the panel said, potentially referring to $36 million of A rated notes.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aotXysmBnS_4

“When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is usually the reputation of the business that remains intact.”

Warren Buffett


Why A UK Hung Parliament is Likely. Stay long precious metals.
http://www.ukpollingreport.co.uk/blog/


The monthly Coppock Indicators finished March:

DJIA: +168 UP. NASDAQ: +370 UP. SP500: +196 UP. The great Bull market goes on with the all three continuing higher in positive numbers.

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