Greece Hasn't Made a Decision Yet on Bailout Referendum, Contrary to Finance Minster's Earlier Statement (Click for Market Reaction)
That today democracy died in Greece is no surprise to anyone (see note from Greek reader below). What may be unexpected, however, is that despite expectations that any talk of a Referendum is over and done with, this is hardly the case. In essence, what G-Pap said in parliament today is that there will be no referendum if and only if there is an agreement from the main opposition party. Alas, as the following headlines from Reuters indicate, this now appears to be a non-starter.
- GREEK OPPOSITION LEADER ASKS PM TO RESIGN
- GREEK OPPOSITION LEADER SAYS PM MUST QUIT, ELECTIONS MUST BE HELD
- GREEK OPPOSITION LEADER SAYS RESIGNATION IS A CONDITION FOR TALKS
As we have been claiming for months now, Italian banks will have no choice but to raise capital to prevent their undercapitalized status from stirring the insolvent bank vigilantes and making them into the next MF, or Lehman, or pick your favorite bankrupt bank metaphor. Today we get confirmation of this, after Reuters reported that Italy's UniCredit will proceed with a €4 to €7 billion capital raise. So far so good. Where it gets somewhat entertaining is the disclosure of who it is that will be "advising" UniCredit on its capital raise. Per Reuters, "Mediobanca and Bank of America-Merrill Lynch are advising Italy's UniCredit on a capital increase seen in a range of between 4 billion and 7 billion euros, although no formal mandate has been given yet to form a consortium for the operation, sources close to the matter said on Thursday. The sources said a decision on the size of the capital hike depended on a series of factors, including whether UniCredit would be allowed to calculate convertible notes worth some 3 billion euros as core capital." Did they just say Mediobanca and Bank of America advising another bank on... a capital raise? Uh, pardon our ignorance, but shouldn't Mediobanca and Bank of America be focusing on their own capitalization first before advising someone else? Does this mean that Bernie Madoff has somehow magically made his way to the Treasury Borrowing Advisory Committee and is now advising Tim Geithner on how to raise debt? Or that Jon Corzine is running for US Attorney General? Frankly, nothing would surprise us any more... Presenting the YTD performance of all three banks.
"A rapid deterioration in credit metrics led to a higher-than-average 14 multi-notch downgrades."
Final Tally - Outgoing Freddie CEO Gets $4 Million Bonus To Receive $21 Billion In Bailouts After Massive Q3 Loss
When last week we reported about the scandal of outgoing Freddie Mac CEO Ed Haldeman receiving at least $3.9 million as a reward for his two year tenure at the top of the insolvent and nationalized housing entity, we said: "As the chart below demonstrates, the total "draws" received under Haldeman's tenure amounts to $14.5 billion. This excludes the Q3 number which will be made clear next week. Something tells us with this abrupt departure, the number may be higher to quite higher than expected." As usual: when in doubt, be cynical, and be skeptical, and you will be right. Today, Freddie just reported that its Q3 draw, or required quarterly bailout amount from the Treasury, was $6 billion: the highest since Q1 2010, as a result of a massive loss of $4.4 billion. This means that during his tenure which ended just after the completin of Q3, Freddie has been "rewarded" with $20.5 billion in taxpayer capital merely to keep the zombie entity in operation! And for this, Ed gets $4 milliom. And this is why people in America are very, very pissed.
Here Comes The Politicization Of MF Global: Former Goldmanite Gensler Says MF Failure Example Of "Freedom To Fail"We find it supremely ironic that one former Goldmanite, in this case the CFTC's Gary Gensler, takes credit (doing the people's work this time?) for allowing the failure of what is now a documented criminal enterprise, MF Global, run by another former Goldmanite, Jon Corzine, and claiming this was nothing less than an example of "Freedom To Fail". The NYT quotes Gensler: "This was an example of a financial institution having the freedom to fail,” he said in response to questioning from Senator Carl Levin, the Michigan Democrat who chairs the Permanent Subcommittee on Investigations. “I don’t think there’s any taxpayer money behind this.”" No, Gary, there is just client money behind this. Anywhere between $700 million and $1.5 billion. Money that was stolen, and had MF global been bailed out, you, the CFTC and the US Government would have been complicit in a prima facie felony. So please - no need for the pathetic pandering to the lowest common denominator that only years of Goldman tenure can hone to this level of perfection. The only question is whether the CFTC, together with that other corrupt regulator which oddly enough is not yet run by a third Goldman alum, has the "freedom to jail."