Zimbabwe - last to leave, Never Mind Turning Off the Lights - They're Already Off (Guest Post by OilPrice)

Kariba Dam, Zimbabwe (Wikimedia Commons)
Guest post by John C.K. Daly of Oilprice.com

Zimbabwe - last to leave, Never Mind Turning Off the Lights - They're Already Off

In the 32 years of his benighted rule, Zimbabwe's President Robert Gabriel Mugabe has done more damage to the country than its white-led minority government ever did.

With the exception of the smuggling of "blood diamonds" the country's economy, once the "breadbasket of Africa," resembles nothing so much as a slow motion train wreck.

One of the foundations of modern nations' economic prosperity are reliable sources of power and here too, Mugabe and his Zimbabwe African National Union cronies have managed to screw things up.

While the country has a peak electricity demand of about 2,200 megawatts, it only produces 1,200 megawatts because its installed power generation capacity cannot meet demand, which primarily comes from the Hwange Power Station (HPS) and Kariba Power Station (KPS).

ISDA: Greek Debt Exchange With CACs Triggers Credit Event, $3.2 Billion Net CDS Exposure Affected

ISDA has declared that the Greek debt exchange with CACs (collective action clauses) is a credit event that will trigger credit default swap payments. Below are the details along with a CNBC video with ISDA's CEO. Here is ISDA's official press release: "ISDA EMEA Determinations Committee: Restructuring Credit Event Has Occurred with Respect to The Hellenic Republic". But, ISDA's Q&A document (pdf) on the credit event provides more details. Look at the chart of Greek 5Y CDS at Bloomberg.com. It is tradable insurance on Greek government bonds.

"Greek Sovereign CDS Credit Event Frequently Asked Questions (FAQ)
March 9, 2012


Why did the ISDA EMEA Determinations Committee rule that a credit event occurred?

The Determinations Committee determined that the invoking of the collective action clauses by Greece to force all holders to accept the exchange offer for existing Greek debt constituted a credit event under the 2003 ISDA Credit Derivatives Definitions."

[...]

GAME CHANGER: Citigroup Hires IBM's Watson Computer

Source: IBM
This is big news for the financial industry and could disrupt jobs on Wall Street. IBM's Watson computer, which "is built on IBM DeepQA technology for hypothesis generation, massive evidence gathering, analysis and scoring" and "applies advanced natural language processing, information retrieval, knowledge representation and reasoning, and machine-learning technologies to open-domain question answering" (IBM's definition), was just hired by Citigroup. This is what business school grads will be competing against. From Bloomberg:

"Watson can comb 10-Ks, prospectuses, loan performances and earnings quality while also uncovering sentiment and news not in the usual metrics before offering securities portfolio recommendations. It can also monitor trading, news sources and Facebook (FB) to help a treasurer manage foreign exchange risk."

Last November, after watching the PBS documentary on Watson's Jeopardy challenge, where it defeated two champions (video below), I wrote about IBM's Watson and Boston Dynamics' PETMAN humanoid robot, which, combined, could be a Terminator. Is there a way to put Watson's brain in PETMAN's head? There would be no need for human labor at that point. Here is the official IBM/Citi press release from March 5, but, more importantly, read what Manjoj Saxena, General Manager of IBM Watson Solutions, sees Watson doing in the financial services industry going forward (bold emphasis mine).

GM, Chrysler To Sell Natural Gas Trucks, See Price Gap Between Natural Gas, Gasoline and Oil

This could help the price gap between gasoline, oil and natural gas close if this trend really takes off. As well as lower the fuel tax on consumers.

"General Motors Co. on Monday plans to disclose it will offer bi-fuel Chevrolet Silverado and GMC Sierra 2500 pickups in the fourth quarter. The trucks will be built by GM and sent to a supplier that will retrofit them to use compressed natural-gas tanks." (read more at WSJ)

Natural Gas, Gasoline and Oil (source: stockcharts.com)

Greece's 1-year Bond Yield is at 1,006%, Debt Swap Decision Ahead

This is for the DistressedVolatility archives. View the chart/quote of the 1-year GGB yield at Bloomberg.com.

Source: Bloomberg.com

News:

Private Investors Holding About 20% of Greek Debt to Participate in Swap (Bloomberg)
Investors call on ECB to play fair in sovereign credit (Reuters)
ECB still obstacle to Greek deal (ekathimerini)
Goldman Secret Greece Loan Shows Two Sinners as Client Unravels (Bloomberg)
Venizelos Says Greece Prepared to Force Bondholders Into $140 Billion Swap (Bloomberg)
Greece Is Prepared to Force Debt Swap: Venizelos (Bloomberg Video)
Private Holders of Greek Debt Should Reject Swap Offer, DSW Says (Bloomberg)

ECRI's Achuthan Says 2012 Recession Call Still Stands (CNBC, 2/24/2012)

Source: CNBC/ECRI
ECRI's Lakshman Achuthan was on CNBC's Squawk Box on February 24 reiterating his call that the U.S. will be in a recession by mid-year 2012, despite the consensus view and haters saying otherwise. He made his original recession call in the media in early October 2011.

Achuthan mentioned that ECRI's U.S. Coincident Index (output, jobs, income and sales) was at a 21 month low, and said: "you haven't had a decline like that in the past 50 years without a recession following in short order." Below is a summary of the key points he made during the interview followed by the video.

Historical Look At How The Last Bull Market Ended (H&S Pattern), Moved Against Negative Credit News For Years

source: bigcharts.com
I found an old chart on my computer and think it's useful because it shows how the last 5 year bull market in equities ended. I compared the weekly S&P 500, Dow and Nasdaq charts that showed the head and shoulders top and breakdown in 2007, as well as the first trend/floor support test. I'm not sure if this was a linear or log chart. I created this on 1/31/2008 at BigCharts.com about a month and a half before Bear Stearns was bailed out by the Fed and sold to JP Morgan. Update: Using the linear chart, which I think this was, I looked back at each chart specifically and at this time the S&P broke through the trend line from 2002, the Dow held it, and the Nasdaq pierced through the trend line but rallied above it (slightly). I can't tell if the Dow's RSI made a new four year low, but look how the trend in volume was increasing during sell offs, which was flashing a warning sign.

Lightning Bolt Hitting Sears Tower In Chicago

iPhoneography break: Check out this photo I took of a lightning bolt hitting Chicago's Sears tower (now Willis Tower) a few years ago. I took it with a Razr phone. Click to enlarge it.



Here's an iPhoneograph of Lakeshore Drive and the John Hancock building from the North Avenue Beach bridge (Chicago, IL).