Bloomberg

Paulson Calling For A Greek Default

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According to Paulson & Co., a hard default by Greece could spell economic disaster of unprecedented proportion along with the breakup of the Euro.  In his 2011 recap letter to clients, he estimates $117 billion will be needed to recapitalize banks and satisfy other monetary needs. Paulson & Co.: “We believe a Greek payment default could be a greater shock to the system than Lehman’s failure, immediately causing global economies to contract and markets to decline,” the hedge fund said in the letter, a copy of which was obtained by Bloomberg News. The euro is “structurally flawed and will likely eventually … Read more

Bear markets begin in good times. Bull markets begin in bad times.

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By: Harvey Sax I haven’t been able to conclusively cite the origin of the above quote, ‘Bear markets begin in good times.  Bull markets begin in bad times’ but undoubtedly it was from an investor who survived the bear market.  The good news is that you can make money in any kind of market.  You can profit from the market rising or going down.  You can even make money in a market that doesn’t move at all. But what you can’t do is make money without a plan.  Ultimately you will only be successful by trading on your own ideas … Read more

Greece: 20% Cut in Minimum Wage and 15,000 Public Sector Jobs Lost? Ouch..

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Prime Minister Papademos, Finance Minister Venizelos, and Greek Bank Governor Provopoulos are expected to sign a draft agreement to secure a $172 billion dollar rescue plan desperately needed by the insolvent country.  However a couple of stipulations in the document are sure to create backlash, specifically the large cut to the minimum wage and the loss of 15,000 public sector jobs. From Businessweek: Greece will pledge permanent spending cuts, including lower pension payments and a 20 percent reduction in the minimum wage, as the economy contracts this year at a faster pace than originally estimated, according to the draft of … Read more

Pension Pulse: Hidden Burden of Ultra-Low Interest Rates?

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Guest Post By: Leo Kolivakis via Pension Pulse: Hidden Burden of Ultra-Low Interest Rates?.   Matthew Philips and Dakin Campbell of Bloomberg report, Banks Join Pensions in Squeeze as Federal Reserve’s Low Rates Erode Profit:   The Federal Reserve, which cut its target for the federal funds rate to a zero-to-0.25 percent range on Dec. 16, 2008, said last month that rates would remain “exceptionally low” at least through late 2014. While the unprecedented period of near-zero rates is meant to aid an ailing economy, it poses challenges for banks, insurers, pension funds, and savers. The hope is that by making mortgages and … Read more