I guess I was wrong Today, Greece went out and raised a whopping E1.6 billion from the open market at 4.46%, well below what the ECB would have charged them. The coverage ratio was 3.6x which is gettig up to U.S. Treasury kind of numbers. Of course the maturity was only six months and with the EU already proclaiming that all bets were covered, investors bravely figured that for six months it was a risk well worth taking. My God, the Greeks even announced that TEN BANKS bid on the issue! The pundits pronounced that the European crisis was behind us and the stock market over here, aided by some good earnings reports, rose 145 points. The fact that the the Greeks traded through the Bund the wrong way by some 400+ basis points was considered, as a point for discussion, rather bad form indeed.
While all of this was going on over there, over here The Leader's numbers went right in the toilet in every poll that could be read indicating a somewhat nervous state within the gereral population as to the quality of leadership. And interestingly, over on the other side of the big water a new bunch that calls themselves Dagong International Credit Rating Co. opened business with the idea that S & P, Moody's and Fitch might not be up to the task that has been ascribed to themselves by Congress and announced that henceforth, THEY would begin issuing debt ratings for sovereign credits. First up, why the US of A and guess what? We aint Triple A...as a matter of fact we are AA+ WITH A NEGATIVE OUTLOOK! So who cares, you may ask? Well, this bunch is located in Shanghai and for those who are not geography majors, that's in China. You might think about the fact that between Shanghai and Hong Kong, the center of financial underwriting will rival the numbers put up in the US very shortly, especially if the idiots in D.C. don't stop with moronic regs like SOX. You might also think about the fact that the Chinese hold around a $trillion of our IOUs and with the level of our debt how much more in debt service does it takes to stay ahead of a double-A credit than a triple-A...not to mention the effect such a downgrade might have on sheer issuance alone. Somehow I get the feeling that the mob in the Chinese investment part of government might, at some point in time--like tomorrow--begin listening to their home-grown product. But that's just me. Nevertheless, if any of you out there are in touch with Alfred E. Newman, have him give me a call. Then again, The Leader now has enough votes to pass the Dodd/Frank bill. Why don't I feel better?
Finally, George Steinbrenner died today. Love him or hate him, the guy had style. He died in 2010, the one year in which the estate tax is 0.00%. Bet he laughed all the way to.......?
We are off to the East Coast tomorrow for two weddings and a visit with the Virginia branch of the James' clan including young Charlie and his sister. Hopefully, we will have some time to stop on the Jersey Shore to visit an old friend. Hey! Ya do whatcha gotta do! Back on July 28. Have a great summer
So we don't disagree very often and, I confess, I have yet to read the full legislation (although the extracts I have read don't do much for me or the industry). Indeed one might argue that it's essentially the status quo with more bureaucracy. Higher capital requirements for the banks can only be a good thing - even if the calculations are less than intelligent. So to our disagreement: of all the morons I have had to listen to over the past twelve months, Elizabeth Warren has appeared to me both intellectually capable of understanding the issues and indeed the most practical in terms of possible solutions. furthermore, she at least dances to her own tune, even if sometimes it appears a little off key. So what prompts the somewhat violent objection of our fearless blogger, Mr James?
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