- Germany’s considering a plan with its EU partners to offer Greece and other troubled euro zone members loan guarantees.
- Debt problems in Europe seem to be growing by the day. But Greece is tiny compared to the rest of Europe. So are Portugal and Ireland. Paul Krugman argues the problem is contained. But isn’t that the same thing they said about subprime in 2007?
- Barnes & Noble’s (BKS) Nook e-reader will finally be available in stores tomorrow, only about four months after original unveiling. “Better late than never. But not a lot better,” Peter Kafka says, as iPad has essentially redefined e-reader market. “It’s now Amazon’s Kindle vs Apple’s iPad.”
- Google’s (GOOG) new foray into social networking, dubbed Google Buzz, has pros and cons. Seems like a clean design, but “lacks any imagination,” Dan Frommer notes.
- Apple’s repudiation of Flash follows its same pattern with floppy drives in the first iMacs, John Paczkowski writes. “It’s a move that inevitably generates great controversy and criticism, but ultimately proves to be ahead of its time.”
- “If you want to understand Obamanomics one year out, look at the demand-side hole we’re still in, the gargantuan boomer deficit we’re heading for, and the mad-as-hell party these bad times have spawned,” former labor secretary Robert Reich says. “How Obama deals with all three will be the real economic test of his presidency.”
- EBay looks to users for help enhancing search. “It’s imperative that we have a deeper conversation with customers and buyers,” Christopher Payne, eBay VP of search, tells NYT’s Bits blog. “It’s fair to say it’s a cultural change at eBay.”
- Hiring won’t ramp up without demand. “No responsible business owner would incur additional debt to hire more workers – unless the company anticipates a major demand increase,” The Atlantic’s Daniel Indiviglio says. “I doubt that’s happening at many smaller firms right now.”
- Average length of time unemployed workers have been out of jobs is at an all-time high, NYT’s Economix blog notes.
- Morningstar buys financial blog Footnoted. Deal’s terms weren’t disclosed. “While I negotiated mightily for the keys to the Gulfstream, the corporate apartment in Paris, the company yacht, the lifetime consulting contract and, of course, a tax gross up — all crazy perks we’ve written about in various M&A deals — I came up empty handed,” Michelle Leder says. “That’s because Morningstar doesn’t believe in those sorts of things. Nor do I.”
Okay, we’re going to do this in two parts. Part one, the straight up (for the most part) news:
US stocks see their sharpest gains in months, as all the selling gets upended over rumors about some kind of bailout package for Greece. DJIA surges 150 (1.5%) to 10059, S&P 500 jumps 14 (1.3%) to 1071, Nasdaq Comp gains 25 (1.2%) to 2151. It’s the Dow best percentage gain since Nov. 9. Late slide trims gains. The bulls were grasping for anything to cling to, so the vague rumors about Greece were perfect. As of this moment, there isn’t anything definitive, but rumors are rampant that other European countries, notably Germany, are going to help their struggling neighbor.
Now, for part two, the skeptical deconstruction.
Josh Brown, who writes The Reformed Broker blog, had a perfect crack on Twitter: “Market rallying with all the conviction of Goldie Hawn denying she’s had plastic surgery.” Aside from the fact that I like Goldie Hawn and would like to believe she hasn’t had plastic surgery, that’s dead on.
There is so much moral hazard, and legal obstruction, around any attempts by the strong EU countries to a Greek aid package, it’s hard to imagine they’ll be able to come up with one that will actually solve all the problems.
Tonight on a very special episode of Tomorrow’s News Today, Madeleine, Eduardo and Paul tackle rumors of a bailout for the Greeks, and what the ramifications of profligacy are for the Grecians as well as other nations.
It’s not exactly an EU summit, but it may be the next best thing.
Posted by Steven Russolilloon February 09, 2010 Banks, Economy, Financials /
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Please, Lucas, tell us another one.
It seems like ever since Rolling Stone’s Matt Taibbi tagged Goldman Sachs (GS) the “vampire squid,” the firm has bent over backward trying to defend itself.
Latest defense comes from Lucas van Praag, Goldman’s head of corporate communications. He pens a blog post in The Huffington Post that goes into granular detail to rebut Sunday’s NY Times story detailing the firm’s controversial relationship with AIG.
He breaks the story into nine different sections, labeling “NYT assertions” and then correcting these errors with “the facts,” claiming several aspects of the story are false, misleading and mischaracterize the situation.
Bottom line, van Praag disagrees with notion that Goldman was biggest beneficiary of mortgage market’s decline. “Through prudent , we limited our losses, rather than generating ‘enormous profits,’” he says. “AIG was only one of many counterparties with whom we had hedging arrangements.”
This isn’t the first time Goldman’s gone out of its way to take part in damage control. In December, van Praag responded to several questions the Zero Hedge blog posted related to Goldman’s prop trading operations as well as how it defines market risk and if it even has a risk policy.
Today in The Upshot, we take a look at what companies are saying about demand, how strong it is, and how they see it panning out in 2010.
Profit growth has returned to corporate America, but for it to stick around, demand from consumers and businesses needs to strengthen from current levels.
From Alcoa Inc., which helped kick off fourth-quarter earnings reports, to Black & Decker Corp. last week, executives say demand remains subdued. A few companies, notably Cisco Systems Inc., are forecasting revenue gains. But for every Cisco, there are companies across a swath of industries that aren’t confident in the timing of any sales rebound.
The bottom line, to us, was that most companies are taking a very cautious stance toward the kind of demand they’re seeing for their products. That’s going to have an effect on how much hiring they do this year, because they will hire new staff only to meet rising demand.
For one thing, companies have a tremendous resource in the fact they they’ve cut hours for existing staffers so sharply, they could add the equivalent of 2.5 million employees back just by increasing hours before ever having to hire a soul, according to Heidi Shierholz at the Economic Policy Institute (Joan McCullough over at East Shore Partners alerted us to the report.)
So it’s going to be a long time, a very, very long time, before that high unemployment rate gets whittled down to anything resembling a decent jobs market.
The Greeks may have designed a new kind of Trojan Horse.
Sometimes it’s kind of hard to articulate exactly what the danger is with Greece, as it concerns the United States. Warning about Greece can make one sound like a Cassandra (we couldn’t resist.) After all, Greece isn’t a major power. It’s on what lately’s been fashionably called the periphery of Europe, and less fashionably one of the PIIGS (Portugal, Ireland, Italy, Greece, Spain; pretty insulting, no?)
Most people over here don’t quite understand what all the fuss is over Greece. So what if they default? Is it just the dollar? Is it the CDS market? Is Greece the next subprime? The kind of frightening truth is, it could be all of those. The biggest lesson of the past few years is that the absolutely unimaginable can happen, and happen with frightening speed. It’s best to be prepared to anything.
The dollar carry-trade, which had been so profitable in 2009, has already been largely unwound, as evidenced by recent dollar strength, which in turn drove down all the risk assets — stocks, oil, gold (oddly enough, gold has been trading more as a risk asset than a safe-haven asset, no matter what G. Gordon Liddy says.)
The euro is rising this morning, on word that ECB president Trichet left Australia a day early; this is leading to speculation that a bailout is in the works (although, to our knowledge, the eurozone members have a no-bailout clause in their charter.)
Meanwhile, although polls showed a majority of the Greeks approve of the difficult austerity measures, civil servants are threatening strikes. The Greeks are pretty good at striking, in case you never noticed. (Editor’s note: there’s great stuff after the jump. Oracle at Delphi kind of stuff. Keep reading (nope, couldn’t resist that one, either.))
Premarket US stock futures point to an early rebound following a sharp decline late in yesterday’s session. Onus continues to shift more on to the bulls, to prove that this retreat is just a short-term correction and the uptrend remains intact.
US dollar index taking a breather, down 0.2% at 80.23. Coke reports 4Q results before the market opens; Disney reports fiscal 1Q after the close. December wholesale trade data due at 10:00 a.m. ET. Asian markets mostly higher overnight, Europe posting gains.
S&P futures up 9.60, DJ futures up 69. Ten-year flat, yield at 3.59%.
J.P. Morgan reported some strong earnings today. But what this bloggers eye were some of the sub-numbers in the earnings report. The bank booked $1.8 billion in investment banking fees. But don’t be fooled – that wasn’t from big M&A advising. But $429 million was in advisory fees. Instead, that $1.3 billion + remaining fees […]
President Reagan’s former budget director David Stockman says Edward Snowden performed a heroic act, the Patriot Act should be repealed, and this whole spying-on-U.S.-citizens thing is a symptom of an out-of-control military-industrial complex. Click here to watch him go on YahooFinance. The author of “The Great Deformation: The Corruption of Capitalism in A […]
