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The Greeks and their Gold in Germany

On February 25, 2010, in Commodities, Europe, by Tim

The latest development in the ongoing saga of the Greek budget troubles and the European Union is that, apparently, the Greeks want some of their gold back that the Germans took in World War II. Either that or they want or an apology, or maybe even a thank you, according to this report in the BBC today.

Greece angers Germany in gold row
Greek Deputy Prime Minister Theodoros Pangalos has accused Germany of failing to compensate Greece for Nazi occupation during World War II.

Mr Pangalos made the remarks during a wide-ranging BBC interview about Greece’s financial difficulties.

“They [the Nazis] took away the Greek gold that was in the Bank of Greece, they took away the Greek money and they never gave it back,” he said.

Here’s where the story kind of breaks down:

“I don’t say they have to give back the money necessarily, but they have to say thanks. And they [the German government] shouldn’t complain much about stealing and not being very specific about economic dealings.”

Mr Pangalos’ comments elicited an icy response from German Foreign Ministry spokesman Andreas Peschke. “I must reject these accusations,” he said.

It sounds as though conditions are not improving over there and downgrades (or the threat of downgrades) do not seem to be helping much.

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Jobless Claims Rise Sharply

On February 25, 2010, in Economy, by Tim

The Labor Department reported that weekly jobless claims rose from 474,000 to 496,000 for the week ending February 20th, the highest total since last November.

The four-week moving average, used to smooth week-to-week volatility, also rose to a three-month high, up from 467,750 to 473,500 as shown below where recessions are indicated in gray, the mid-2009 end date of the last recession estimated based on consensus forecasts.
IMAGE Part of the reason for the increase last week was the weather-related delay in processing new unemployment insurance claims in the mid-Atlantic and New England states, however, this does not substantively affect the moving average which is now headed upward again.

How long this recent trend lasts is anyone’s guess, but it is worth noting that the current level of jobless claims was exceeded on only three occasions during the prior recession in 2001, immediately after the September 11th attacks.

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Thursday Morning Links

On February 25, 2010, in Uncategorized, by Tim

TOP STORIES
Greece Risks Downgrade Within Month on Budget Worries – Bloomberg
Ben Bernanke says record-low interest rates are still needed – LA Times
Ron Paul on Watergate, Saddam Hussein and the Federal Reserve – WSJ
California One Step Closer To Insolvency After State Cancels $2B Bond Sale – Zero Hedge
Toyota president apologizes under fire of U.S. officials – Washington Post
In Defense of Much, But Not All, Financial Innovation – Brookings
Senate approves $15 billion jobs bill – CNN/Money
The top 10 places to retire – MarketWatch

MARKETS/INVESTING
Oil below $80 amid mixed US economy signals – AP
Gold Drops to Two-Week Low as Dollar Gain Saps Demand – Bloomberg
Hoping to prevent stock meltdowns, SEC passes short-selling rules – Washington Post
Goldman And JPMorgan SPY Holdings Double Over Prior Quarter – Zero Hedge
Euro Weakens, Stocks Fall, Greek Bonds Drop on Rating Concern – Bloomberg
Making the most of a strong dollar – MSN Money

(more…)

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How Not to Use PowerPoint

On February 24, 2010, in WTF?, by Tim

Spotted over at The Big Picture, here’s a pretty funny look at how not to make slides using PowerPoint, the world’s most popular (or is it the world’s only) presentation software.

It’s been a couple years since I did anything like this and, for anyone wanting to know how to do it correctly, Presentation Zen is well worth a look. If you haven’t already seen this or other similar books, it will change everything you thought you knew about presentations.

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Alan Greenspan was DY-NO-MITE!

On February 24, 2010, in Article of the Week, Economy, Housing, Stocks, by Tim

One of the most disturbing aspects of the recent economic collapse and the ongoing financial market crisis is that there is still widespread disagreement over who or what caused it.

All too often, pundits say, “You can’t lay all the blame for our current condition on one institution or one man” and that is true, but these same commentators oftentimes skirt answering the toughest of questions about what nearly brought the whole financial system down by distributing the blame among many players and many failings.

By arguing that the entire system must be reformed, nothing ends up being changed as we see now – almost eighteen months after the worst financial market crisis since the Great Depression and there have been no substantive changes to how the financial system works.

Many argue the system has become more crisis-prone.

An even more disheartening development is that there continues to be debate about whether the most fundamental aspect of credit markets – short-term interest rates – was a major factor in precipitating the late-2008 meltdown.

As evidenced by the musings of current Fed chief Ben Bernanke in early-January, the central bank – the group that controls short-term rates – suggests that people look elsewhere for the root cause of the biggest credit bubble and bust in the history of Mankind as the nation’s central bankers did everything right in their conduct of monetary policy.

How could the central bank do everything right and then watch everything go so wrong?

(more…)

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Maxine Waters on Interest Rates

On February 24, 2010, in WTF?, by Tim

Maybe the idea of more Congressional oversight of the central bank isn’t such a good idea after all. In the question and answer session with Federal Reserve Chairman Ben Bernanke before the House Financial Services Committee a short time ago, Rep. Maxine Waters (D-CA) asked the following questions:

Starting with your discussion on page 4, “in addition to closing the special facilities, the Federal Reserve is normalizing its lending to commercial banks through the discount window” and you go on to talk about your new federal funds rate and a discussion of why you have done this and encouraging banks to go to the private market for investments.

And you say further in this discussion that these adjustments are not expected to lead to higher financial conditions for households and businesses.

The last thing I heard before I came here this morning was a prediction by some of the analysts on television that, in about one month, we can expect that there will be an increase in interest rates on mortgages and home loans. Everybody that I talk to really believes that this change that you have made in the federal funds rate is what’s going to trigger that.

Is that true? Did you give any thought to this? How can you guarantee that it won’t?

Wow – a pretty stunning lack of basic understanding about how the central bank works.

Recall that, last week, the Fed funds rates was not raised – it was the discount rate that was hiked from 0.5 percent to 0.75 percent and the potential rise in mortgage rates next month would come about due to the Fed stopping their purchase of mortgage backed securities.

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