Credit default swaps not saving Greek investors

The infamous credit default swap is not saving "investors" (aka speculators) in Greek debt. The Greeks are broke and will not be able to pay off their debts. Everyone knows this, and has known it for a long time. Desperate Greeks are offering 8,9,10 percent interest, which is a helova lot more then you get for investing in US treasuries. So a number of gullible Euro banks have been buying Greek debt and hedging the risk by purchasing "credit default swaps" (CDS) on the Greek debt. A "credit default swap" is like insurance, an equally gullible bank or insurance company offers a CDS which works like this. You pay me a hefty premium up front, and if the Greeks default, I'll pay you what the Greeks owe you.
With connivance of the EU central bank, the Greek debt holders are being coerced into "extending" the maturity of their Greek bonds and accepting less interest. In short, the Greeks don't pay, and they cut the interest rate. The lucky gullible investors find that the CDS won't pay off until the rating agencies (Standard & Poor and Moody) declares the Greeks in default. So far, the rating agencies are claiming the Greeks aren't defaulting, so the CDS's aren't paying off even as the investors are getting a haircut.
All is not bad. Investors should not be pouring valuable capital down the drain by investing in Greek debt, they ought to be investing in things that make money and provide jobs. Having the gullible investors who thought they could reap high interest risk free get skinned will wise up the rest of the bunch.

The Debt limit crisis is mostly smoke & mirrors

Some things to keep in mind as the posturing goes on.
1. All the numbers are for 10 year savings. Which means they are malarkey. Even if this year's Congress cuts something down, next year's Congress can push it right back up where it used to be. And if the cut was to a juicy piece of pork, you can bet it will be added back in next year. Plus, predictions of the Federal budget for the next ten years cannot take into account wars, economic depressions, and technological change. In the last ten years we had 9/11, Afghanistan, Iraq, the Prius, fracking, and Great Depression 2.0. What bad news lies in wait for us in the next ten years? The debate would be more honest if we kept the projections to just next year.
2. The budget cuts are likely to be fake cuts. A real cut occurs when the agency gets less money than it got last year. A fake cut occurs when the agency gets less money than it asked for. Our well educated and un biased newsies cannot tell the difference between a fake cut and a real cut.

The Norway shooter

I hear attempts from left and right wing nutcases to blame the Norway shooter on political ideology. This is revolting.
The Norway shooter was a homicidal maniac (by definition) who took out his internal devils on 68 young people at a summer camp. Politics has nothing to do with it. Homicidal maniacs don't have politics, they have psychoses.

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FAA authorization?

Lost in the sound and fury over the debt limit is an interesting sidelight. The Federal Aviation Administration (FAA) authorization ran out last Friday. There was a dispute over $16 million in funding for "rural airports" and unionization of federal workers. The TV newsies did not say just who was in favor of what, but we can guess. Any how no compromise was reached and the authorization ran out.
So the FAA furloughed 4000 bureaucrats. The air traffic controllers were classified as "essential personnel" so they are on the job and the planes are flying. The Newshour had Ray Lahood, transportation secretary on last night. When asked what the 4000 laid off bureaucrats used to do, he mumbled "nextgen" and "improve the FAA". In short, they drew their pay but were not doing anything essential. Four thousand bureaucrats cost $400 billion a year, or $4 trillion over 10 years. Jeeze, just leaving them laid of would give a enough spending reduction to satisfy demands for spending cuts to cover a debt limit increase.

And the authorization to collect a 10% tax on tickets expired, which is a windfall to the airlines. They pocketed the money and didn't reduce air fares at all.

All and all, let's leave the FAA un authorized.

Is Washington broken ?

Subject of the talk session on Meet the Press this morning. Translating pundit speak into plain English, we don't have the votes to pass our pet programs. And that's terrible.
We lack bipartisanship in Congress. Translation, those nasty Republicans won't vote for our programs.
Everyone is so ideological now. Translation, they are voting their districts and the districts are up in arms. Few Congressmen dare to vote for more taxes or a debt limit increase lest their districts vote them out of office.
Nobody will compromise and compromise has become a bad word. Translation, those nasty Republicans won't vote for our programs.

Debt limit?

Saturday TV claims a total break down of negotiations between Obama and Speaker of the House John Bohner. Maneuvering to place the blame for a government shut down continues.
A failure to raise the debt limit will be confusing. Some people will not get paid, and it's Obama who chooses who to pay and who to stiff. Unless Obama is totally out of his mind he will make payments on the national debt, pay the troops, and pay social security. Remember even under Obama, 60% of federal spending still comes from taxes, so the feds can pay 60% of their bills.
The Wall St credit raters like Standard and Poor are going apeshit and threatening to reduce the credit rating of the US government. However this is a sideshow, after rating all those worthless mortgage backed securities AAA nobody takes them seriously any more.
Republicans need to find a way to shift the blame to Obama, the real issue is winning in 2012 as opposed to gaining some mostly worthless promises to reduce spending in the future. All spending bills have to pass the Republican house and they can cut and trim the pork as desired, and they have until 2013 to keep doing so. In fact they ought to retain control of the House past the 2012 elections, giving plenty of time to reduce spending the old fashioned way.

A Marvel Comics Superhero movie

Captain America. It was pretty good if you like that kind of movie. Better than Ironman, better than the last Spiderman. Once the movie gets past the origin story, it settles down to steady ass kicking and that's fun to watch. There is a girl friend, who has an impressive upper cut and a government model 45. She spends most of the movie making Capt America pay for an incautious office smooch with a passing blonde clerk-typist.
The whole thing is set in the 1940's and WWII. The vintage scenes are well done, I was unable to spot any anachronisms. It's in 3 D, 'cause every one is doing three D. I wish the 3 D thing would go away. The effects aren't that eye catching, the glasses are annoying and the theatre charges extra for 3D movies.
For opening night, the crowd wasn't that big, there were a lot more people last week for the third night of Harry Potter.