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“Too Big To Fail” … Fails
Bloomberg reports that Citigroup has failed the Fed’s new round of stress tests:
Citigroup Inc.’s capital plan was among five that failed Federal Reserve stress tests, while Goldman Sachs Group Inc. and Bank of America Corp. passed only after reducing their requests for buybacks and dividends.
Citigroup, as well as U.S. units of Royal Bank of Scotland Group Plc, HSBC Holdings Plc and Banco Santander SA, failed because of qualitative concerns about their processes, the Fed said today in a statement. Zions Bancorporation was rejected as its capital fell below the minimum required. The central bank approved plans for 25 banks.
And former FDIC chief Sheila Bair said that the whole bailout thing was really focused on bringing a very dead Citi back from the grave.
For example, the New York Times wrote in 2009:
Over the past 80 years, the United States government has engineered not one, not two, not three, but at least four rescues of the institution now known as Citigroup.
So why did the U.S. government give Citi a passing grade in previous stress tests?
Because they were rigged to give all of the students an “A”.
Time Magazine called then Secretary Treasury Tim Geithner a “con man” and the stress tests a “confidence game” because those tests were so inaccurate.
But the bigger story is that absolutely nothing was done to address the causes of the 2008 financial crisis, or to fix the system:
- Even though everyone knows that breaking up the big banks is essential to stabilizing the economy, it hasn’t happened. Indeed, they’re bigger than ever
- The faulty incentive system – huge bonuses that encourage reckless risk-taking by bankers – arestill here
- Even though rampant speculation helped destabilize the economy, speculation has shot through the roof
- Another big problem – shadow banking – has only gotten worse
- Derivatives? Washington has poured gasoline on the fire
- Cracking down on fraud and holding criminals accountable is perhaps the most important thing to fix the economy. So has this happened? Nope … just phony P.R.
Remember, Nobel prize winning economist George Akerlof has demonstrated that failure to punish white collar criminals – and instead bailing them out- creates incentives for more economic crimes and further destruction of the economy in the future.
Indeed, professor of law and economics (and chief S&L prosecutor) William Black notes that we’ve known of this dynamic for “hundreds of years”. (Actually, the government has ignored severalthousand years of economic wisdom.)
Heck of a job, guys …
The Chevron Newspaper, Collapsing Consciously & Prison for Internet Trolling | Peak Oil News and Message Boards
On this episode of Breaking the Set, Abby Martin remarks on a Richmond, California newspaper sponsored by Chevron, calling out the absurd propaganda about the oil industry featured in the publication. Abby then talks about the crackdown on individuals who choose to live ‘Off the Grid’ citing a examples such as a man in Oregon who faced jail-time for collecting rainwater and a Florida woman who was forced to re-connect to the state’s electrical grid. Abby then speaks with Carolyn Baker, Author of ‘Collapsing Consciously’ about confronting our emotions concerning the inevitable collapse of industrial civilization, and what actions we can take to address those fears. Abby then talks about two Supreme Court cases involving the Affordable Care Act’s mandate that private companies offer free access to birth control, and the absurd fight against providing this coverage due to religious corporate personhood. BTS wraps up the show with an interview with attorney Tor Ekland, and journalist, Nicole Powers, discussing the case of internet hacker, Andrew Auernheimer, better known under the pseudonym ‘Weev’, who received a 41 month prison sentence after finding a flaw in AT&T’s public server.
Anyone who cares about our natural environment should be marking with great sadness the centenary of World War I. Beyond the incredible destruction in European battlefields, the intense harvesting of forests, and the new focus on the fossil fuels of the Middle East, the Great War was the Chemists’ War. Poison gas became a weapon — one that would be used against many forms of life.
Insecticides were developed alongside nerve gases and from byproducts of explosives. World War II — the sequel made almost inevitable by the manner of ending the first one — produced, among other things, nuclear bombs, DDT, and a common language for discussing both — not to mention airplanes for delivering both.
War propagandists made killing easier by depicting foreign people as bugs. Insecticide marketers made buying their poisons patriotic by using war language to describe the “annihilation” of “invading” insects (never mind who was actually here first). DDT was made available for public purchase five days before the U.S. dropped the bomb on Hiroshima. On the first anniversary of the bomb, a full-page photograph of a mushroom cloud appeared in an advertisement for DDT.
War and environmental destruction don’t just overlap in how they’re thought and talked about. They don’t just promote each other through mutually reinforcing notions of machismo and domination. The connection is much deeper and more direct. War and preparations for war, including weapons testing, are themselves among the greatest destroyers of our environment. The U.S. military is a leading consumer of fossil fuels. From March 2003 to December 2007 the war on Iraq alone released more CO2 than 60% of all nations.
Rarely do we appreciate the extent to which wars are fought for control over resources the consumption of which will destroy us. Even more rarely do we appreciate the extent to which that consumption is driven by wars. The Confederate Army marched up toward Gettysburg in search of food to fuel itself. (Sherman burned the South, as he killed the Buffalo, to cause starvation — while the North exploited its land to fuel the war.) The British Navy sought control of oil first as a fuel for the ships of the British Navy, not for some other purpose. The Nazis went east, among several other reasons, for forests with which to fuel their war. The deforestation of the tropics that took off during World War II only accelerated during the permanent state of war that followed.
Wars in recent years have rendered large areas uninhabitable and generated tens of millions of refugees. Perhaps the most deadly weapons left behind by wars are land mines and cluster bombs. Tens of millions of them are estimated to be lying around on the earth. The Soviet and U.S. occupations of Afghanistan have destroyed or damaged thousands of villages and sources of water. The Taliban has illegally traded timber to Pakistan, resulting in significant deforestation. U.S. bombs and refugees in need of firewood have added to the damage. Afghanistan’s forests are almost gone. Most of the migratory birds that used to pass through Afghanistan no longer do so. Its air and water have been poisoned with explosives and rocket propellants.
The United States fights its wars and even tests its weapons far from its shores, but remains pockmarked by environmental disaster areas and superfund sites created by its military. The environmental crisis has taken on enormous proportions, dramatically overshadowing the manufactured dangers that lie in Hillary Clinton’s contention that Vladimir Putin is a new Hitler or the common pretense in Washington, D.C., that Iran is building nukes or that killing people with drones is making us safer rather than more hated. And yet, each year, the EPA spends $622 million trying to figure out how to produce power without oil, while the military spends hundreds of billions of dollars burning oil in wars fought to control the oil supplies. The million dollars spent to keep each soldier in a foreign occupation for a year could create 20 green energy jobs at $50,000 each. The $1 trillion spent by the United States on militarism each year, and the $1 trillion spent by the rest of the world combined, could fund a conversion to sustainable living beyond most of our wildest dreams. Even 10% of it could.
When World War I ended, not only did a huge peace movement develop, but it was allied with a wildlife conservation movement. These days, those two movements appear divided and conquered. Once in a blue moon their paths cross, as environmental groups are persuaded to oppose a particular seizure of land or military base construction, as has happened in recent months with the movements to prevent the U.S. and South Korea from building a huge naval base on Jeju Island, and to prevent the U.S. Marine Corps from turning Pagan Island in the Northern Marianas into a bombing range. But try asking a well-funded environmental group to push for a transfer of public resources from militarism to clean energy or conservation and you might as well be trying to tackle a cloud of poison gas.
I’m pleased to be part of a movement just begun at WorldBeyondWar.org, already with people taking part in 57 nations, that seeks to replace our massive investment in war with a massive investment in actual defense of the earth. I have a suspicion that big environmental organizations would find great support for this plan were they to survey their members.
Yesterday we showed the end result of what happens in a China, in which bankruptcy and default are suddenly all too real outcomes for the country’s hundreds of millions of depositors, when the risk of losing all of one’s money held in an insolvent bank becomes a tangible possibility in “What A Bank Run In China Looks Like: Hundreds Rush To Banks Following Solvency Rumors.” Today, we look in detail at all the discrete elements that culminated with hundreds of Chinese residents lining up in front of a bank in Yancheng and rushing to withdraw their money only to find their money not available (at least until the regional government was forced to step in with a bail out to avoid an even greater panic).Why is this a useful exercise? Because since we will certainly see many more example of it in the near future, it pays to be prepared. Or least it certainly prevents one from losing all of their money…
This is what happened, and when it happened, it happened quick. From Reuters:
The rumour spread quickly. A small rural lender in eastern China had turned down a customer’s request to withdraw 200,000 yuan ($32,200). Bankers and local officials say it never happened, but true or not the rumour was all it took to spark a run on a bank as the story passed quickly from person to person, among depositors, bystanders and even bank employees.
Savers feared the bank in Yancheng, a city in Sheyang county, had run out of money and soon hundreds of customers had rushed to its doors demanding the withdrawal of their money despite assurances from regulators and the central bank that their money was safe.
The panic in a corner of the coastal Jiangsu province north of Shanghai, while isolated, struck a raw nerve and won national airplay, possibly reflecting public anxiety over China’s financial system after the country’s first domestic bond default this month shattered assumptions the government would always step in to prevent institutions from collapsing.
Rumours also find especially fertile ground here after the failure last January of some less-regulated rural credit co-operatives.
And since nothing beats a first person account here is just that, courtesy of Jin Wenjun who saw the drama unfold.
He started to notice more people than usual arriving at the Jiangsu Sheyang Rural Commercial Bank next door to his liquor store on Monday afternoon. By evening there were hundreds spilling out into the courtyard in front of the bank in this rural town near a high-tech park surrounded by rice and rape fields.
Bank officials tried to assure the depositors that there was enough money to go around, but the crowd kept growing.
In response, local officials and bank managers kept branches open 24 hours a day and trucked in cash by armoured vehicle to satisfy hundreds of customers, some of whom brought large baskets to carry their cash out of the bank.
Jin found himself at the bank branch just after midnight to withdraw 95,000 yuan for his friend from a village 20 kms (12 miles) away.
“He was uncomfortable. It was late and he couldn’t wait, so he left me his ID card to withdraw his cash,” Jin said.
By Tuesday, the crisis of confidence had engulfed another bank, the nearby Rural Commercial Bank of Huanghai.
“One person passed on the news to 10 people, 10 people passed it to 100, and that turned into something pretty terrifying,” said Miao Dongmei, a customer of the Sheyang bank who owns an infant supply store across the street from the first branch to be hit by the run.
Claiming to be a Yancheng resident, one user of Sina Weibo’s Twitter-like service repeated the story on Monday about the failed 200,000 yuan withdrawal, adding that “rumours are the bank is going bankrupt.”
When later contacted by Reuters online, he said he had heard the rumour from his mother when she came back from town. Huanghai and Jiangsu Sheyang banks declined to comment.
China’s banks are tightly controlled by the state and bank bankruptcies are virtually unheard of, so the crisis has baffled many outsiders.
Yet in Sheyang, fears of a bank collapse resonate.
In recent years, this corner of hard-strapped Jiangsu province has experienced a boom in the number of loan guarantee, or ‘danbao’, companies and rural capital co-operatives.
These often shadowy private financial institutions promised higher returns on deposits than banks, but many have since failed.
Qu Guohua, a spiky haired former migrant worker in his 50s, nearly lost 30,000 yuan in a credit guarantee scheme that went up in flames.
What saved him one day in January 2013 was a tip-off from a friend at a rural co-operative just down the street from the loan guarantee company where he had his money.
“He told me the other one was going to go out of business and I better go get my money quick,” he said.
Qu managed to get his cash, but others behind him in line were not so lucky, he said.
That helps explain why lines formed so quickly once the rumours started circulating this week. Luck has it, he deposited the cash in a bank next door: Sheyang Rural Commercial Bank.
Banks are different than credit co-operatives and guarantee companies in that they are regulated by China’s banking watchdog and subject to strict capital requirements.
On Wednesday, officials’ painstaking efforts to drive that message home were in full swing.
Bank managers stacked piles of yuan behind teller windows in full sight of customers to try to reassure them that they had plenty of cash on hand. Local officials used leaflets, radio and television to try to calm nerves.
Near one of the troubled banks, a branch of the China Commercial Bank – one of China’s ‘Big Four’ state-owned banks – was running a ticker message on an electronic board over the entrance stating: “Sheyang Rural Commercial Bank is a legal financial organisation approved by the state, just like us”.
While small groups of depositors still gathered at several bank branches in and around this part of Yancheng, some arriving by motorbike, others by three-wheeled motor vehicles common in the Chinese countryside, there were signs that the banks’ efforts were bearing fruit.
Jin said he did not panic when the rumours were spreading and on Wednesday, like many others, he made a deposit.
Others, like Qu, are holding their nerve. On a visit to see his hospitalised daughter, he decided to nip into a local bank where he still has about 10,000 yuan – just for a look.
“I’m not nervous about my money in the bank. It’s protected by national law.
* * *
The same international law that “protected” the Cyprus banking system?
In the meantime, perhaps one should ask: why is it that people everywhere around the globe are so jittery, be it Chinese bank depositors, or E*trade baby high frequency “investors” in US stocks?Is it because everyone sense that fundamentally the system is more broke and insolvent than ever?
* * *
In short, the US has a stock market, which everyone knows is fake and manipulated, but as long as it keeps going higher, it is “safe” to put even more cash into epically overvalued equities. And since everyone is confident they can pull their money before everyone else does, the downswings are sharp and violent (and usually require the Plunge Protection Team to get involved and halt them), and in many ways a complete one-sided panic.
Just like in China. Only in China, instead of being stuck behind their computers, people actually have to go out on the street and withdraw their physical cash before everyone else does.
The problem, of course, is that once the lies and the illusions end, and they will, there will not be enough physical claims to satisfy everyone, be it due to a deposit or equity flight. Because in a fractional reserve system already stretched to the max and leveraged to record levels, one thing is certain: once the upward momentum dies, only devastation and guaranteed 90%+ losses for most, await.
Risk analyst Nassim Nicholas Taleb predicted the 2008 financial crisis, by pointing out that commonly-used risk models were wrong. Distinguished professor of risk engineering at New York University, author of best-sellers The Black Swan and Fooled by Randomness, Taleb became financially independent after the crash of 1987, and wealthy during the 2008 financial crisis.
Now, Taleb is using his statistical risk acumen to take on genetically modified organisms (GMOs).
Taleb’s conclusion: GMOs could cause “an irreversible termination of life at some scale, which could be the planet.”
Sure it does … but only because we don’t understand statistics, and so we have no handle on what’s risky and what’s not.
Taleb and his 2 co-authors write in a new draft paper:
For nature, the “ruin” is ecocide: an irreversible termination of life at some scale, which could be the planet.
Genetically Modified Organisms, GMOs fall squarely under [the precautionary principle, i.e. the rule that we should err on the side of caution if something is really dangerous] not because of the harm to the consumer because of their systemic risk on the system.
Top-down modifications to the system (through GMOs) are categorically and statistically different from bottom up ones (regular farming, progressive tinkering with crops, etc.) There is no comparison between the tinkering of selective breeding and the top-down engineering of arbitrarily taking a gene from an organism and putting it into another. Saying that such a product is natural misses the statistical process by which things become ”natural”. [i.e. evolving over thousands of years in a natural ecosystem, or at least breeding over several generations.]
What people miss is that the modification of crops impacts everyone and exports the error from the local to the global. I do not wish to pay—or have my descendants pay—for errors by executives of Monsanto. We should exert the precautionary principle there—our non-naive version—simply because we would only discover errors after considerable and irreversible environmental damage.
Taleb shreds GMO-boosters – including biologists – who don’t understand basic statistics:
Calling the GMO approach “scientific” betrays a very poor—indeed warped—understanding of probabilistic payoffs and risk management.
It became popular to claim irrationality for GMO and other skepticism on the part of the general public —not realizing that there is in fact an ”expert problem” and such skepticism is healthy and even necessary for survival. For instance, in The Rational Animal, the author pathologize people for not accepting GMOs although ”the World Health Organization has never found evidence of ill effects” a standard confusion of evidence of absence and absence of evidence. Such a pathologizing is similar to behavioral researchers labeling hyperbolic discounting as ”irrational” when in fact it is largely the researcher who has a very narrow model and richer models make the ”irrationality” go away).
In other words, lack of knowledge of basic statistical principles leads GMO supporters astray. For example, they don’t understand the concept that “interdependence” creates “thick tails” … leading to a “black swan” catastrophic risk event:
Fat tails result (among other things) from the interdependence of components, leading to aggregate variations becoming much more severe than individual ones. Interdependence disrupts the functioning of the central limit theorem, by which the aggregate is more stable than the sum of the parts. Whether components are independent or interdependent matters a lot to systemic disasters such as pandemics or generalized crises. The interdependence increases the probability of ruin, to the point of certainty.
(This concept is important in the financial world, as well.)
As Forbes’ Brian Stoffel notes:
Let’s say each GM seed that’s produced holds a 0.1% chance of — somehow, in the intricately interdependent web of nature — leading to a catastrophic breakdown of the ecosystem that we rely on for life. All by itself, it doesn’t seem too harmful, but with each new seed that’s developed, the risk gets greater and greater.
The chart below demonstrates how, over time, even a 0.1% chance of ecocide can be dangerous.
I cannot stress enough that the probabilities I am using are for illustrative purposes only. Neither I, nor Taleb, claim to know what the chances are of any one type of seed causing such destruction.
The focus, instead, should be on the fact that the “total ecocide barrier” is bound to be hit, over a long enough time, with even incredibly small odds. Taleb includes a similar graph in his work, but no breakdown of the actual variables at play.
Source: Author’s input, based on Taleb, Read, and Bar-Yam paper
Taleb debunks other pro-GMO claims as well, such as:
1. The Risk of Famine If We Don’t Use GMOs. Taleb says:
Invoking the risk of “famine” as an alternative to GMOs is a deceitful strategy, no different from urging people to play Russian roulette in order to get out of poverty.
And calling the GMO approach “scientific” betrays a very poor—indeed warped—understanding of probabilistic payoffs and risk management.
2. Nothing Is Totally Safe, So Should We Discard All Technology? Taleb says this is an anti-scientific argument. Some risks are small, or are only risks to one individual or a small group of people. When you’re talking about risks which could wipe out all life on Earth, it’s a totally different analysis.
3. Assuming that Nature Is Always Good Is Anti-Scientific. Taleb says that statistical risk analysis don’t use assumptions such as nature is “good” or “bad”. Rather, it looks at the statistical evidence that things persist in nature for thousands of years if they are robust and anti-fragile. Ecosystems break down if they become unstable.
GMO engineers may be smart in their field, but they are ignorant when it comes to long-run ecological reality:
We are not saying nature is the smartest possible, we are saying that time is smarter than GMO engineers. Plain statistical significance.
3. People Brought Potatoes from the Americas Back to Europe, Without Problem. Taleb says that potatoes evolved and competed over thousands of years in the Americas, and so proved that they did not disrupt ecosystems. On the other hand, GMOs are brand spanking new … created in the blink of the eye in a lab.
As if “ecocide”isn’t enough, there are many other reasons to oppose GMO foods … at least without rigorous testing, including decreased crop yield, increased pesticide requirements, and potentiallysevere health effects.
On the plus side? A few companies will make a lot of money.
Freshly fracked wells sent U.S. oil production soaring 39 percent since 2011. That’s the steepest climb in history, and if production continues apace, the U.S. would become the world’s biggest source of oil by 2015, according to the U.S. Energy Information Administration.
Rapid well declines threaten to spoil that promise. The average flow from a shale gas well drops by about 50 percent to 75 percent in the first year, and up to 78 percent for oil, said Pete Stark, senior research director at IHS Inc.
‘The decline rate is a potential show stopper after a while,’ said Stark, a geologist with almost six decades in the oil patch. ‘You just can’t keep up with it.’ 
That’s an interesting comment, given that the company Mr. Stark works for is more commonly known for its sunny optimism about our future fossil fuel supply.
FRACKING ISN’T FREE OR EASY
The reality is that rapid decline rates are a common feature of fracked wells. Drilling faster, more, and at higher costs just to keep pace with current production is not exactly a winning strategy. Higher costs for them are supported by the higher costs we pay. At some point, consumers balk, and when they do, there goes a lot of investable funds for more production. Then what?
The article from which that quote was sourced describes some of the admittedly-fascinating overview of the artificial intelligence systems now being considered—and it some cases already deployed—to improve the drill results from fracking (the hydraulic fracturing of shale in order to facilitate the flow of “tight” oil trapped in those rocks.) The article notes that “four out of every 10 clusters of fractures in an average horizontal well are duds.” Given that each well can cost millions of dollars, much more than wells drilled in conventional crude oil fields, that can be a problem.
AN UNSPOKEN CHALLENGE OR TWO
The use of fiber-optics and 3D seismic imaging are among the technological advances now being used to aid scientists “scientists see and hear what’s going on two miles underground.”
An executive of Schlumberger Ltd is quoted in this same article announcing that the combination of their own scientists’ expertise with the “U-ROC” software program “has led to an almost 30 percent increase in production in some wells in the Eagle Ford [TX].”
An official from another petroleum company that after collaborating with Halliburton and using a “science-based approach,” his company’s “shares doubled in the five months after” a conference call with investors.
If that’s not enough good news, by last summer the company enjoyed its “best-ever results” in the shale formations of western Texas’ Permian Basis, “and that it was‘among the best’ among its competitors at that location. The improvements were attributed in part, as a spokesman noted, to the company’s “own internal efforts to pump more time and money into the science of drilling and production.”
A LOOK AT THE UNSPOKEN
Improved performance is improved performance. But for those of us interested in how depleting and finite fossil fuel resources—with a healthy concern that technology and economics will continue to make extraction and production feasible to begin with—will keep up with demand in the years ahead, the doubling of a company’s shares, “an almost 30 percent increase in production in some wells,” being “among the best,” and pumping “more time and money into the science of drilling and production” suggests that all is not well in Oil Production Land.
That’s precisely what those of us concerned about peak oil continue to stress to listeners and readers.
It’s probably safe to assume that none of those efforts or the technologies employed are inexpensive. It’s also a certainty that whatever costs are associated with developing, testing, supplying, and using those impressive advances get passed on to consumers.
The impressive technologies now in play, with their higher costs, to locate and produce a product harder-to-come-by and not of the same quality as the conventional crude oil we’ve used to power our civilization for more than a century all point to the fact that we clearly can no longer rely on Business As Usual in oil production itself and fossil fuel usage by all of us.
Taking a bit of a detour in the headlong pursuit of ever more expensive technologies in order to plan for what happens in years to come when that resource just doesn’t do what we all need it to do; or devote more resources to the alternatives which will be needed when it makes little sense to continue the fossil fuel chase; or even provide more information to the public now so that they can get into the game doesn’t seem all that unreasonable, does it?
~ My Photo: Corona del Mar, CA – 02.16.18
Greek Government, And Bailout Deal, On Verge Of Collapse Due To Definition Of "Fresh Milk" | Zero Hedge
The Greek economic collapse, depression and bankruptcy has seen many odd things in its brief and often times violent history (in those days when the violent elements were not on strike), but this surely is the first time when one of the countless Greek bailouts may be on the rocks due to the disagreement over the definition of “fresh milk.” No, really. Reuters explains that Greece’s government risks another rebellion over bailout terms this week after milk producers lobbied against a move to free up prices as part of efforts to make the economy more competitive. Basically, for Greeks, milk is fresh if it is 5 days old or less, yet according to the always fascinating codex of the Troika, “fresh” can be labeled anything that is as old as 11 days…. including the salmonella bacteria it contains. What’s worse, is that the “spoiled milk” scandal, far from a joke, has swept over the country, and now even threatens to topple the government.
The country’s international lenders want it to ditch rules, such as limiting the shelf life of fresh milk to five days, that effectively deter importers.
But Greek dairy producers and lawmakers representing farming constituencies are fighting the move to call milk up to 11 days old ‘fresh’ – the latest in a long line of last-minute disruptions to Greece’s bailout reviews with the European Union and International Monetary Fund.
Six lawmakers from within the ruling coalition – three from Prime Minister Antonis Samaras’s New Democracy party and three from the Socialist PASOK – have opposed the proposal that will be submitted to parliament on Friday as part of an omnibus reform bill that Greece must pass to secure bailout aid.
If they vote against it, Samaras and PASOK leader Evangelos Venizelos could be forced to expel them, further reducing the government’s slim majority of just 153 seats in the 300-seat assembly.
In other words, there is a possibility that Samaras’ government, which nearly brought down the Eurozone after the summer of 2012 elections were almost won by the “anti-bailout” Samaras, will have no choice but to expel enough people from his party to leave it without an absolute 50%+1 majority, and potentially lead to a government collapse! All because of the definition of fresh milk.
Yup: it sure sounds like the European “Union.”
The bill – which will pave for the way for up to 10 billion euros ($14 billion) of aid – is expected to pass after last-minute wrangling, but the row has highlighted how powerful lobbies can undermine the country’s bailout lifeline.
“You don’t need to be an expert to understand that extending the shelf life is aimed at allowing milk from abroad to be labelled as fresh,” PASOK lawmaker Mihalis Kassis told Greek radio at the weekend. “If that’s a prerequisite by the (EU/IMF) troika then we deserve what we get.”
The controversy has captured headlines and days of debate on Greek television, overshadowing expectations that the country will soon be able to raise money on bond markets again.
“It is unfair and saddening, at a time when Greece is spreading its wings to emerge from a rut, that there is such dissonance,” Samaras said during a trip to Brussels on Friday.
“MPs drowning in a glass of milk!” the daily Ethnos wrote on its front page on Saturday. “Spoiled milk” proclaimed the center-left Eleftherotypia newspaper’s headline.
Why are foreign exporters so interested in penetrating the Greek milk market? Simple: prices. “Greece is the only country in Europe that has legislation to determine the shelf life of fresh milk and the price, at around 1.30 euros per litre, is among the highest in the EU. The Paris-based Organisation for Economic Co-operation and Development (OECD) says Greeks paid about a third more for dairy produce than the EU average in 2012.”
One would think that the Greeks would welcome the competition from abroad, and that the lower price would be a good thing. Well, if cow farms and milkmen account for a substantial portion of the Greek GDP, not to mention employment pool, which apparently in Greece they do, it becomes clear why the nation which is now a complete and utter economic disaster quarantine area, would be leery of allowing any foreign influence to raise its already laughter inducing unemployment rate.
So aside from that, the Grecovery is on pace.
When we left China last night, it was all shits and giggles that bad news is great news and a Chinese stimulus plan will be here any minute to save the day. Having realized the sad fact that is not going to happen (as we explained here most recently) and the specter of banks runs looming, this evening’s session has seen property developer stocks tumble – retracing all of last night’s losses – the Yuan plunges by the most in a week back above 6.2150. Copper is holding in for now at the magic $300 level but corporate bond prices are falling once again (worst run in 4 months).
The Yuan is dumping at its fastest rate in a week…erasing all the hope-strewn gains from yesterday
Property Developers are taking it on the chin…
And it’s no wonder, as Bloomberg notes…
Chinese developers’ gross margins declined by a weighted average 294 bps last year.
Most developers have forecast a recovery. Further declines in prices could present a threat.
Chinese developers that have reported 2013 results have set an average 2014 sales growth target of 16%, about half last year’s 30% rate. This is likely recognition of a need for better inventory management and of a more challenging sales environment. Developers will also probably curb construction because of slowdowns in some tier two and three cities.
Longfor Properties summed up the attitude among major Chinese and Hong Kong property developers in its company filings… .“In 2014, the Group’s key operating focus will be inventory clearance and cost control… For the coming 6-12 months period, we wil strive to reduce the leve of unsold inventory, hereby gradually improving our sale through rate.”
But apart from that… China’s fixed and the world economy will be back to normal as soon as the US weather clears up…
Nothing to see here, move along. While it appears the Russians are willing to pay the price of modest sanctions from the west to ‘liberate’ their fellow countrymen, the fallout from further tension with Ukraine could “boomerang” once again on the divided nation. As RBC Ukraine reports, the Minister of Energy and Coal Industry Yuriy Prodan said at a press conference today that “oil reserves will last for 28-29 days” in Ukraine. After that, the negotiation begins as Ukraine already owes billions for previously delivered gas – as Ukraine’s storage levels more than halved in the last 3 months.
Stocks of petroleum products in Ukraine will last for 28-29 days, said at today’s press conference, the Minister of Energy and Coal Industry Yuriy Prodan.
“Speaking on the situation with oil, then ensure there is quite stable. Today oil reserves will last for 28-29 days,” – he said, the ” RBC-Ukraine . ”
At the same time, the Minister noted the significant risk reduction in the supply and rising gas prices. As of March 25, 2014 in Ukrainian underground gas storage facilities located 7 billion cubic meters of gas.
“Up there can be about 2 billion is not the quantity that scares experts, it would be possible to hold only a week. It all depends on what kind of regime will be whether we can take about 20 million cubic meters. Meters of gas to reverse and so on “- said Prodan.
According to the company “Ukrtransgaz” abnormally warm winter 2013 2014. has reduced gas extraction from underground storage by an average of 37% compared to the same period last year: it was 60 million cubic meters per day.
In late December 2013. occupied at the time the post of Minister of Energy and Coal Industry of Edward Stawicki reported that Ukrainian gas reserves in underground storage is 16.5 billion cubic meters.
We suspect any further military intervention will only crimp this supply even faster.