The yield on Greek one-year government bills hit 60% Tuesday.
Not only does this suggest default is now all but certain and will come soon, it also implies that the terms of the default will be particularly brutal for investors, with recovery rates possibly even lower than the currently anticipated 50%.
European governments are being forced to face up to the significance of a Greek default. This is perhaps the underlying message from International Monetary Fund Managing Director Christine Lagarde’s warning that Europe’s banks “need urgent recapitalization.” She may have been warning about the costly alternative to a solution to the Greek sovereign crisis. But it could well be too late.
Yesterday we had the first case study of what happens in a hyperinflation, when we noted that the local central bank had just hiked interest rates from 22% to 27%. Net result for the economy? Zero. Today is case study #2 where we learn what happens to an imploding economy which happens to be surrounded by friendly neighbors who just happen to find themselves in a massive arbitrage courtesy of a currency that is losing multiples of its value on a monthly if not daily basis. Per Bloomberg: “Belarus’s supermarkets are running out of meat as Russians take advantage of a currency crisis that a devaluation and the world’s highest borrowing costs have failed to stem. “All meat has gone to Russia,” Alexander Andreyevich, an 82-year-old former tractor-plant worker, said Aug. 25 in Minsk, the capital. “My relatives near the Russian border called me a few days ago and said the shops are empty.”…”Private stall owners simply go and buy meat from state- owned vendors and sell it a couple of steps away for a hefty profit,”Deputy Agriculture and Food Minister Vasily Pavlovsky told reporters in Minsk Aug. 24. The government banned individuals in June from taking basic consumer goods such as home appliances, food and gasoline out of the country. Russians, buoyed by the removal of border checkpoints July 1 as part of a customs union, have circumvented the restrictions.” Funny- if the locals had preserved their purchasing power by holding their money in gold, they would not find themselves in a position where those who still have a stable fiat exchange rate (for the time being) can literally steal products from under their noses for a paltry sum as sellers scramble to converts products into some currency before it is devalued even more tomorrow.
More from Bloomberg:
The crisis has sparked protests as Belarusians vent their anger at President Alexander Lukashenko, dubbed Europe’s last dictator by the administration of former U.S. President George W. Bush. While the authorities have sought to control food costs to quell public discontent, buyers from neighboring Russia have pushed meat prices higher.
Belarus will allow the ruble to float from mid-September and will remove restrictions on depositors seeking to exchange local currency for dollars and euros, Lukashenko said yesterday.
“The Belarusian ruble’s exchange rate will be determined by supply and demand, as with any other commodity,” he told the government and central bank, according to the Belta news service. “We will not support the exchange rate artificially.”
What happens then is simple: revolution, as the currency will collapse into a hyperinflationary vortex. We fully expect the exchange rate a year from today to be several million percent higher, as the ghost of Weimar and all other failed Keynesian experiments moves in to haunt this former Soviet satellite country.
WASHINGTON (AP) — The Justice Department is refusing to release legal memos the George W. Bush administration used to justify his warrantless surveillance program, one of the most contentious civil liberties issues during the Republican president’s time in office.
In responding to a Freedom of Information Act request, the department is withholding two legal analyses by then-government lawyer John Yoo, and is revealing just eight sentences from a third Yoo memo dated Nov. 2, 2001. That memo is at least 21 pages long.
One former FBI agent is finding out firsthand that freedom of speech isn’t something guaranteed to every American. Colleagues at the CIA are keeping him from printing some of his own personal accounts in an upcoming book about the 9/11 attacks.
In his upcoming book “The Black Banners: The Inside Story of 9/11 and the War Against Al Qaeda,” Ali H. Soufan wants to write that the Central Intelligence Agency could have had a chance at keeping the September 11 terror attacks from happening. Soufan says that the CIA knew about two of the hijackers involved in the al-Qaeda plot, and while that information might have been of great interest to the FBI, the Central Intelligence Agency withheld the crucial information.
Specifically, Soufan says that the CIA had detailed information on 9/11 hijacker Abu Zubaydah as early as January 2000 but neglected to act on it.
The United States has so far stopped short of commenting on a Taliban claim that they killed scores of American forces in Afghanistan on Saturday.
The Taliban claimed on Saturday that 64 US-led troops were killed in two separate attacks they launched in the southern city of Kandahar, a Press TV correspondent reported.
Taliban spokesman Qari Yusuf Ahmadi said on Saturday that the militants killed 36 American forces in a car bomb attack in front of the US base in Kandahar province and also 28 others were killed in another bombing near the military base.
The explosions were so powerful that rocked most of the areas in the province.
Medicinal marijuana oil made from cannabis buds, when ingested thrice daily, for two months, will destroy leukemia and cancer cells. Here is just one study which shows the results: http://www.ncbi.nlm.nih.gov/pubmed/16908594:
Plant-derived cannabinoids, including Delta9-tetrahydrocannabinol (THC), induce apoptosis in leukemic cells, although the precise mechanism remains unclear. In the current study, we investigated the effect of THC on the upstream and downstream events that modulate the extracellular signal-regulated kinase (ERK) module of mitogen-activated protein kinase pathways primarily in human Jurkat leukemia T cells. The data showed that THC down-regulated Raf-1/mitogen-activated protein kinase/ERK kinase (MEK)/ERK/RSK pathway leading to translocation of Bad to mitochondria. THC also decreased the phosphorylation of Akt. However, no significant association of Bad translocation with phosphatidylinositol 3-kinase/Akt and protein kinase A signaling pathways was noted when treated cells were examined in relation to phosphorylation status of Bad by Western blot and localization of Bad to mitochondria by confocal analysis. Furthermore, THC treatment decreased the Bad phosphorylation at Ser(112) but failed to alter the level of phospho-Bad on site Ser(136) that has been reported to be associated with phosphatidylinositol 3-kinase/Akt signal pathway. Jurkat cells expressing a constitutively active MEK construct were found to be resistant to THC-mediated apoptosis and failed to exhibit decreased phospho-Bad on Ser(112) as well as Bad translocation to mitochondria. Finally, use of Bad small interfering RNA reduced the expression of Bad in Jurkat cells leading to increased resistance to THC-mediated apoptosis. Together, these data suggested that Raf-1/MEK/ERK/RSK-mediated Bad translocation played a critical role in THC-induced apoptosis in Jurkat cells.
The red glare of the rocket; the bursting of bombs; the silencing of sports fans? A college in Indiana says that “The Star Spangled Banner” is a tad too violent and won’t let the US National Anthem be heard at school games this season.
Administrators at Goshen College, a small Mennonite school in the American Midwest, say that Francis Scott Key’s wartime opus isn’t appropriate for the ideals the college believes in.
“We recognize that some people may not be satisfied with this decision, but we believe it is the right one for Goshen College,” Goshen’s chairman of the board of directors, Rick Stiffney, says in a written statement. A press release from the school adds that the college’s Christ-centered core value of compassionate peacemaking conflicts with the violence depicted in the anthem, and that therefore it is in the best interest to retire the song from sporting events.
The lyrics of the historic tune were nixed last year in favor of an instrumental version, but now Goshen officials have decided to ban the tune entirely.
NATO says that with the Gaddafi regime ousted, it is close to success in Libya. Nevertheless, the alliance promised to remain in the region in order to secure its UN mandate.
During a briefing in Naples on Tuesday, NATO spokesperson Oana Lungescu told the media:”The NATO mission is important, it’s effective and it’s still necessary in order to protect civilians. As long as threats remain, there’s still a job to be done and we will get that job done.”
NATO is far from done with the operation in Libya despite the fall of Gaddafi’s regime, said operation spokesman Col. Roland Lavoie. The alliance plans to continue supporting rebel forces as long as civilians in the country are under threat.