Statement By Eurogroup On 5th Tranche Of Greek Loan ($17 billion)

March 25 - Greece Independence Day
Embed Source: Aster-oid on Flickr
Greece will receive "a $17 billion installment by July 15" to get them through the next few months, according to VOA News. Here is the statement made by Eurozone finance ministers. By the way, the Dow Jones Greece Stock Index is close to testing January 2011 resistance. I will provide a chart update in a new post. Greek stocks rallied along with Greek Government bonds on the austerity news.

"2 July 2011

Statement by the Eurogroup

Ministers welcomed the progress made by the Greek authorities in implementing the policy understandings reached with the European Commission, in liaison with the ECB, and the IMF. In particular, Ministers noted with satisfaction the adoption of key laws on the fiscal strategy and privatisation by the Greek Parliament. Ministers therefore endorsed the Commission's Compliance Report and the signing of the updated Memorandum of Understanding.

The Greek authorities provided a strong commitment to adhere to the agreed fiscal adjustment path and to the growth-enhancing structural reform agenda, which are essential components of our strategy to restore fiscal sustainability and safeguard financial stability. Ministers call on all political parties in Greece to support the programme's main objectives and key policy measures in order to ensure a rigorous and swift implementation.

Charlie Munger's Parody on Wantmore, Tweakmore, Totalscum, Countwrong and Oblivious in Boneheadia; BRK Buys Remaining Wesco Stake

Charlie Munger via Wikipedia
Berkshire Hathaway (BRK) decided to buy the remaining 20% stake in Wesco Financial (WSN), which is currently run by Charlie Munger, the Vice Chairman of Berkshire. Full article at Bloomberg:
"Wesco shareholders voted today at a meeting in Pasadena, California, to approve Berkshire Hathaway Inc. (BRK/A)’s offer to acquire the 20 percent of Wesco it doesn’t already own for about $545 million in cash and stock."

At the final shareholders meeting he dissed bankers, accountants, Alan Greenspan and Lehman's former CEO Dick Fuld. Full article at Bloomberg:
“The bubble in America was caused by some combination of megalomania, insanity and evil in, I would say, investment banking, mortgage banking,” Munger, 87, said today at a conference in Pasadena, California.

There was also a parody released which is a must read. Read it at My Investing Notebook:
"A PARODY DESCRIBING THE CONTRIBUTIONS OF WANTMORE, TWEAKMORE, TOTALSCUM, COUNTWRONG, AND OBLIVIOUS TO THE TRAGIC “GREAT RECESSION” IN BONEHEADIA AND THE THOUGHTS OF SOME PEOPLE RELATING TO THIS DISASTER" ... (LOL)

Jim Rogers Says Federal Reserve Worries Him The Most, Be Prepared (Video)

Source: Bloomberg
Jim Rogers was interviewed by Rishaad Salamat today on Bloomberg TV in Singapore. He still owns the U.S. Dollar and Euro, is short Government bonds ("from June 10 to be precise") and believes Greece should default in an orderly way. Rogers is also worried about the global supply of agriculture; watch the Bloomberg video after the jump.

When asked what worries him the most at the moment, Rogers said the Federal Reserve in the United States.
"They don't have a clue about economics or currencies; they don't have a clue about much of anything, and they are dangerous people. They are not doing good things for the world. And they will probably stop QE2, they said it so many times they will, but when things start going wrong again in a few days, weeks or months, they are going to start printing money again and that's not good for the world. That's going to lead to more problems for all of us over the next decade. This is a serious problem facing us."

When asked how and when we plan to solve these problems, Rogers said the market could force us to face reality (David Stockman thinks the same thing).

Worldwide Nuclear Industry Woes Deepen (TEPCO, Israel, Nebraska) - Guest Post

Fukushima Dai-Ichi Nuclear Power Plant Japan (Credit: Flickr/Digital Globe)
Guest post by OilPrice.com (photo added to post)

Worldwide Nuclear Industry Woes Deepen

The year 2011 will go down for the nuclear industry worldwide as an annus horribilis. First came the March Fukushima nuclear disaster, with operator Tokyo Electric Power Co. (TEPCO) belatedly acknowledging that three of the facility's six reactors did, in fact, suffer core meltdowns.

On 20 June Moody's Investors Service obligingly cut its credit rating on TEPCO to junk status and kept the operator of Japan's crippled nuclear power plant on review for possible further downgrade, citing uncertainty over the fate of its bailout plan. TEPCO is Japan's largest corporate bond issuer and its shares are widely held by financial institutions. TEPCO shares have plummeted 80 percent since March, dragging its market capitalization below $9 billion. Following the Fukushima crisis, including a round of emergency loans from lenders and $64 billion in outstanding bonds, TEPCO now has around $115 billion in debt versus equity of about $35 billion. It's enough to make any self-respecting Japanese salaryman commit hara-kiri.

Farther to the west, the U.S. Nuclear Regulatory Commission is closely monitoring conditions along the Missouri River, where floodwaters were rising at Nebraska Public Power District's Cooper Nuclear Station and Omaha Public Power District's Fort Calhoun nuclear power plant. Flooding could complicate the restart of the Fort Calhoun plant, shut in April for refueling, as the U.S. Army Corps of Engineers expects record water release from the federal dams along the Missouri River to continue until mid-August. The failure on Friday of a Missouri River levee in northwest Missouri offered the imperiled plants a brief reprieve from possible flooding, although Nebraska officials nervously expect the river's waters to rise again.

Visualizations of Tweets Before and After Japanese Earthquake

Source: Twitter on Flickr
Check out these visualizations designed by @miguelrios. From Twitter's blog:
"On Twitter, we saw a 500% increase in Tweets from Japan as people reached out to friends, family and loved ones in the moments after the March 2011 earthquake. This video shows the volume of @replies traveling into and out of Japan in a one-hour period just before and then after the earthquake. Replies directed to users in Japan are shown in pink; messages directed at others from Japan are shown in yellow."

The second video "displays worldwide retweets of Tweets originating in Japan for one hour after the earthquake. Senders’ original Tweets are shown in red; Tweets retweeted by their followers in the hour after the event are displayed in green."

Live Video of Greeks Protesting Austerity Measures in Syntagma Square, RT Video Clips (6/29/2011)

Watch News247 stream live in Syntagma Square in Athens, Greece (hat tip Zero Hedge)

EUR/USD Rallies Ahead Of Greek Austerity Vote, Will ECB Raise Rates?

EUR/USD (FreeStockCharts.com) Click for larger view
The Greek austerity vote is at 2pm Athens time, so 7am in New York. A strategist at BNP Paribas told CNBC that if the vote passes EUR/USD could hit 1.45. Look where the upper-bound of the descending channel hits today. There is still a sovereign debt crisis in Europe, but countries keep getting bailed out by the IMF, ECB and EU, and supported by China (good job if you bought the Euro after this news).

EUR/USD just broke out of a near-term downtrend, above 50 day moving average resistance and regained the uptrend line from January. It is rallying hard right now inside the green circle or mini symmetrical triangle. The question is, does it stick? Will the vote be a buy the rumor-buy the news or buy the rumor-sell the news catalyst. I will continue to watch 1.4281 as an important support level (blow off top on 11/4/2010) should EUR/USD rollover again. As you can see from the chart, whenever EUR/USD broke through that support level it has always been a decent short opportunity. So will EUR/USD hit 1.45 or 1.428 first? For thoughts on the Eurozone by market gurus see yesterday's Eurozone/Greece link fest. In the comment section I provided updates. Get ready for riots.

Soros, Taylor, El-Erian, Grant, Ackermann On Eurozone Crisis; Gary Shilling, Marc Faber on China

Euro Banknotes (Wikimedia/ECB)
Watch the Greek austerity/budget cut vote tomorrow and see how EUR/USD reacts (read my previous post on EUR/USD technical levels to watch). Below are opinions of what to expect going forward with Greece (+ analysis on China, Japan and Italian banks).

Josef Ackermann (Deutsche Bank CEO) Greek woes may eclipse Lehman (Reuters, 6/27/2011)

Soros Says a Euro Exit Mechanism Is ‘Probably Inevitable’ Amid Debt Crisis (Bloomberg, 6/27/2011)

Financial Meltdown if Greece Defaults: S&P Equity Strategist (Yahoo Finance - Breakout Video, 6/27/2011)

EU has Plan B if Greece rejects austerity -sources (Reuters, 6/27/2011)

Norway Won’t Be Haven From Greek Default (Bloomberg, 6/28/2011)

U.S. Money Funds Risk Losses From Europe Crisis (Bloomberg, 6/27/2011)

Jim Grant (Interest Rate Observer): Money market mutual funds in the U.S are exposed to sovereign risks in Europe (Bloomberg Video, 6/20/2011)

Scenarios: Possible impact of a Greek ratings default (Reuters, 6/27/2011)

Greek debt restructure inevitable: PIMCO's El-Erian (Reuters, 6/26/2011)

EUR/USD at Crossroads Waiting on Greek Budget Cut Vote (Charts)

EUR/USD (see larger views below)
EUR/USD (Euro in U.S. Dollars) is trying to confirm a direction in the center of a descending channel. It rallied hard last night when Premier Wen said he would invest in the Euro-zone's sovereign debt. At Bloomberg (6/26/2011):
"Premier Wen Jiabao said China will keep investing in Europe’s sovereign bond market, providing a vote of confidence in the region roiled by the debt crisis."

And French banks are willing to rollover greek debt. At Bloomberg (6/27/2011):
"The euro maintained yesterday’s gain against the dollar on optimism Greece’s creditors will agree to roll over the nation’s debt to forestall the currency union’s first default."

However, the Euro started falling on fears that Greek austerity might not pass. At Bloomberg (6/28/2011)
"The euro fell against the dollar and yen, reversing earlier gains, before Greek lawmakers vote on budget cuts tomorrow needed to prevent the currency union’s first default."

Who knows what will happen tomorrow. Like I said in my previous post, in my opinion EUR/USD needs to stay above 11/4/2010 support (1.4281) to prove it can test the upper-bound of the descending channel. The 50 day moving average and the near-term downtrend line also need to be violated. If EUR/USD can't stay above 1.4281, it could test the major uptrend line and 200 day moving average inside the symmetrical triangle. Click on the charts below for a larger view. I'm going to construct a link-fest with various opinions on the Greek debt crisis and Euro (see it here).

China Winning the Race for Central Asia's Energy Riches - Guest Post

Source: Photobucket
Guest Post by OilPrice.com

China Winning the Race for Central Asia's Energy Riches

Many western analysts have described the post-Soviet tussle for Caspain and Central Asian energy reserves as the new "Great Game, except this time around, Russia is facing the U.S. rather than the British empire.

To a dispassionate outside observer however, what is most striking about the prolonged wrangle between Moscow and Washington for hydrocarbons, military bases and influence is the emergence of an understated sly newcomer who has managed to bag many of the region's assets - China.

There are many reasons for this, despite the fact that both Russia and the U.S. both seemed to hold winning hands.

FOMC Statement, Economic Projections, Bernanke's Press Conference (Video-Transcript) - 6/22/2011

Bernanke's Press Conference 6/23/2011
On 6/22/2011, the Federal Reserve released updated economic projections and said in the FOMC statement that the U.S. economic recovery was "continuing at a moderate pace, though more slowly than the Committee had expected" and "recent labor market indicators have been weaker than anticipated. The Fed completes its second round of quantitative easing ($600 billion in Treasury bond purchases) at the end of the month, but will continue to reinvest principal payments from agency debt and agency mortgage-backed securities in Treasury securities. I embedded Bernanke's press conference and transcript as well.

Overnight market update: E-mini S&P 1261.75 (-0.18%), EUR/USD 1.41196 (-0.06%), Gold/USD 1504.14 (-0.01%), August Crude Oil Future 90.69 (-0.52%), Nikkei 225 9619.57 (-0.61%), Hang Seng 22,025 (-0.66%).

FOMC Statement on June 22, 2011:
Fed Economic Projections (GDP, Unemployment, PCE Inflation) 6/2011
Information received since the Federal Open Market Committee met in April indicates that the economic recovery is continuing at a moderate pace, though somewhat more slowly than the Committee had expected. Also, recent labor market indicators have been weaker than anticipated. The slower pace of the recovery reflects in part factors that are likely to be temporary, including the damping effect of higher food and energy prices on consumer purchasing power and spending as well as supply chain disruptions associated with the tragic events in Japan. Household spending and business investment in equipment and software continue to expand. However, investment in nonresidential structures is still weak, and the housing sector continues to be depressed. Inflation has picked up in recent months, mainly reflecting higher prices for some commodities and imported goods, as well as the recent supply chain disruptions. However, longer-term inflation expectations have remained stable.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The unemployment rate remains elevated; however, the Committee expects the pace of recovery to pick up over coming quarters and the unemployment rate to resume its gradual decline toward levels that the Committee judges to be consistent with its dual mandate. Inflation has moved up recently, but the Committee anticipates that inflation will subside to levels at or below those consistent with the Committee's dual mandate as the effects of past energy and other commodity price increases dissipate. However, the Committee will continue to pay close attention to the evolution of inflation and inflation expectations.

To promote the ongoing economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent. The Committee continues to anticipate that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate for an extended period. The Committee will complete its purchases of $600 billion of longer-term Treasury securities by the end of this month and will maintain its existing policy of reinvesting principal payments from its securities holdings. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate.