Category: regulation

Appeals Court Tells Fed to Turn Over Records

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Well, the Federal Reserve just lost the next step of the court case, with the U.S. Court of Appeals in Manhattan siding with the circuit court, and with plaintiff, Bloomberg News, that its records are subject to the freedom of information act:

The Fed had argued that disclosure of the documents threatens to stigmatize borrowers and cause them “severe and irreparable competitive injury,” discouraging banks in distress from seeking help. A three-judge panel of the appeals court rejected that argument in a unanimous decision.

The U.S. Freedom of Information Act, or FOIA, “sets forth no basis for the exemption the Board asks us to read into it,” U.S. Circuit Chief Judge Dennis Jacobs wrote in the opinion. “If the Board believes such an exemption would better serve the national interest, it should ask Congress to amend the statute.”

The opinion may not be the final word in the bid for the documents, which was launched by Bloomberg LP, the parent of Bloomberg News, with a November 2008 lawsuit. The Fed may seek a rehearing or appeal to the full appeals court and eventually petition the U.S. Supreme Court.

May? May?

Of course they are going to ask for an en banc hearing, and of course they will appeal to the Supreme court.

My guess is that they will also lobby for a legislative exemption while their lawyers move as slowly as possible.

FWIW, I think that the claim that the borrowers would be “stigmatized” is pure bull sh%$.

Who got the money, and how much they got, is common knowledge on Wall Street: Everyone knows who the borrowers are, except for the general public.

What is really going on here is that there is likely evidence of some sort of wrongdoing, at least a lack of due diligence and sloppiness, that the Federal reserve does not want revealed.

Economics Update

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OK, the FOMC released its report today, and when the Federal Reserve speaks, people listen.

What the Fed said is that it intends to keep rates low for an, “Extended Period,”.

The Fed speak is that economic conditions, “warrant exceptionally low levels of the federal funds rate for an extended period,” this means that they will not raise rates at their next meeting or probably the one after that.

Most likely you will see at least, and possibly 2 statement changes from the Fed before they raise rates, but they are closing the taps a bit by, “closing the special liquidity facilities that it created to support markets during the crisis,” and it reaffirmed that it will be closing the TALF will on June 30.

In real estate, home starts fell in February, though doubtless a lot of that was the Snowpocalypse.

The Fed’s statement pushed oil up by $1.80/bbl and similarly pushed the dollar down.

Full FOMC statement after break.


(emphasis mine)

Press Release
Federal Reserve Press Release

Release Date: March 16, 2010
For immediate release

Information received since the Federal Open Market Committee met in January suggests that economic activity has continued to strengthen and that the labor market is stabilizing. Household spending is expanding at a moderate rate but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software has risen significantly. However, investment in nonresidential structures is declining, housing starts have been flat at a depressed level, and employers remain reluctant to add to payrolls. While bank lending continues to contract, financial market conditions remain supportive of economic growth. Although the pace of economic recovery is likely to be moderate for a time, the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability.

With substantial resource slack continuing to restrain cost pressures and longer-term inflation expectations stable, inflation is likely to be subdued for some time.

The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period. To provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve has been purchasing $1.25 trillion of agency mortgage-backed securities and about $175 billion of agency debt; those purchases are nearing completion, and the remaining transactions will be executed by the end of this month. The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to promote economic recovery and price stability.

In light of improved functioning of financial markets, the Federal Reserve has been closing the special liquidity facilities that it created to support markets during the crisis. The only remaining such program, the Term Asset-Backed Securities Loan Facility, is scheduled to close on June 30 for loans backed by new-issue commercial mortgage-backed securities and on March 31 for loans backed by all other types of collateral.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A. Duke; Donald L. Kohn; Sandra Pianalto; Eric S. Rosengren; Daniel K. Tarullo; and Kevin M. Warsh. Voting against the policy action was Thomas M. Hoenig, who believed that continuing to express the expectation of exceptionally low levels of the federal funds rate for an extended period was no longer warranted because it could lead to the buildup of financial imbalances and increase risks to longer-run macroeconomic and financial stability.
2010 Monetary Policy Releases

Dodd’s Bill Is Out, and I Think It’s A Sellout, but ………

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You see, it places the Consumer Financial Protection Agency (CFPA) in the Federal Reserve, which means that a small regulatory firm intended to defend the consumer is in a really big organization that is intended to defend banks.

Remember: Consumer protection was the Fed’s bailiwick in the run up to the, so this clearly appears to be a sell out, only, as an equally confused Paul Krugman notes:

…But here’s my puzzle: the bill, as I understand it, calls for an independent Consumer Protection Agency, with a director directly appointed by the president, but one that is “housed” at the Fed.

………

Does it mean that the staff will all be long-term Fed employees? Then that would, to at least some degree, compromise the agency’s independence. Or is it purely a cosmetic issue? If so, who exactly is being diverted?

I’m not prejudging this — there’s a lot to look at. But I’m puzzled.

What it does have is:

I think that the real question here is two fold, transparency and independence.

As to transparency, the question is whether Freedom of Information Act laws apply to this organization as they do to other regulatory institutions, or is it a paranoid secret black hole like the Federal Reserve.

As to independence, the question is whether it gets to, under the limitations of civil service regulations, hire its own staff, and draw up its own budget.

If it does not have this authority, it is a paper tiger.

I Like This: Stick it to the Man, and Save Money

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Not a surprise

There have been a number of initiatives geared toward getting consumers to move their funds from the too big to fail banks.

All in all, this is likely a good thing, but one of the things that people have not generally noted is that moving your money to a smaller bank also personally benefits you, because smaller banks charge lower fees, and generally treat small customers better.

The promise that has always been made with bank deregulation has been that larger banks would be more efficient, and so pass the savings onto consumers.

The reality is the opposite. Large banks use their oligopoly positions to extract more money from consumers.

Too big to fail banks are also banks that do not serve the consumer, so let’s break them up.

H/t James Kwak

He’s Just Not That Into You

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It looks like Democrat Chris Dodd has dumped Republican Bob Corker in his efforts to create financial reform, and has announced that he will be releasing a Corker-less proposal on Monday:

Senate Banking Committee Chairman Christopher Dodd said he will release his version of legislation to overhaul financial rules, signaling that talks on a compromise with Republican Bob Corker have collapsed.

Dodd, a Connecticut Democrat who had been negotiating with Corker since last month, will release his proposal March 15 and hold a committee meeting to consider changes in two weeks, according to a statement released today.

“I have been fortunate to have a strong partner in Senator Corker and my new proposal will reflect his input and the good work done by many of our colleagues,” Dodd said. “Our talks will continue and it is still our hope to come to agreement on a strong bill all of the Senate can be proud to support.”

Note that he did not mention Richard Shelby, the ranking Republican on the committee, which I think was a deliberate snub; Shelby refused to do anything even approaching good faith.

I am not certain of the dynamics.

It could be that he realized that Corker was actually just trying to delay, that there were unbridgeable differences, or that the recent stories on how Bob Corker was doing the bidding of his campaign donor payday lenders skeeved him out.

My guess is that, at it’s core, Dodd did not want to spend any more time making the bill worse for just one Republican vote.

It’s Bank Failure ……… Thursday???

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OK, we have a bank shut down today, a day before the normal Friday closures, and it makes 27 for the year, LibertyPointe Bank, of New York, NY.

I would note that the trend line moved down a bit, because we added one to the sample, but 6 to the number of days, and we are trending around 3 a week. There will be a more meaningful pic tomorrow.

I’m wondering if the FDIC is waiting to roll up a sh%$mess of banks tomorrow, or if this is some peculiarity of the New York State banking department, which executed the closure.

Another Shoe to Drop in Real Estate

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The FDIC is planning to auction off some the assets that it has accumulated, and that has the banks worried that this will force many of them into insolvency, because it will set a market price for the sh%$ that is on their books:

A Federal Deposit Insurance Corp. plan to auction more than $1 billion in assets seized from failed banks next month, including a loan to build a W Hotel in Atlanta, may trigger writedowns that weaken lenders nationwide.

Almost half of the loans were originated by Silverton Bank N.A., whose collapse last May was the biggest in Georgia history. Community banks that joined Silverton in providing $80 million for the 237-room hotel and condominium complex, as well as backing for 39 other projects, could be forced to write down their stakes to reflect sale prices.

What is going on here is that because the FDIC will be auctioning off assets, as it is required to do by law, these illiquid assets, and this will assign a fair market value to said assets.

Banks and other institutions who have maintained the illusion of solvency by using some variant of mark to myth model will therefore have to reassess the value of these assets on their books, pushing some, perhaps many, of these institutions into bankruptcy.

Felix Salmon Has A Talk with Treasury Officials

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And determines that they are still the banks bitches, working for them, rather than the citizenry.

In truth, Mr. Salmon did not say that Geithner and His Evil Minions™ see themselves as nothing more than a way to support the banksters, but that is the basic take away that I see here:

Well done to Shahien Nasiripour, who did the best job of anybody, at the Treasury blogger meeting yesterday, at getting Treasury’s officials to commit news. Specifically, he asked about Sheila Bair’s sensible idea that mortgage principal write-downs can help keep homeowners in their homes while also maximizing the value of the mortgage to the issuing bank. And he was told, quite clearly, that Treasury has been talking to Bair about this idea, and that if it makes sense at the bank level, it probably makes sense at the federal level, too, as part of the HAMP program to make mortgages affordable.

Except that once the meeting was over, its main architect, Treasury flack Andrew Williams, emailed Nasiripour to walk that particular idea back, saying that Treasury was NOT (his all caps) going to do anything “major” in terms of principal write-downs, and that any moves in that direction would be no more than “tweaks”.

………

It seems to me that insofar as Treasury has a problem with principal write-downs, that’s clearly a function of the fact that it’s worried about the consequences for banks’ balance sheets. We’re prosecuting a muddle-through strategy right now, where the government artificially props up house prices by providing substantially all of the mortgage finance in the country, in the hope that with economic recovery will come enough of a natural rebound in house prices to let the government slowly remove its support without them falling dramatically again.

(emphasis mine)

Unless the Treasury is banking on 6% inflation a year for the next 8 or 9 years, this is not going to happen.

House prices are still over valued, whether you use price to income, or rent to own (and rents are dropping too), and we are not going to see a recovery until house prices

This is complete regulatory capture, pure and simple.

Headlines that Take the Starch Out of Your Shorts

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Beijing studies severing peg to US dollar.

Truth be told, the hed is a bit alarmist: The Chinese are talking about starting to talk about allowing the Yuan to appreciate a bit:

China’s central bank chief laid the groundwork for an appreciation of the renminbi at the weekend when he described the current dollar peg as temporary, striking a more emollient tone after months of tough opposition in Beijing to a shift in exchange rate policy.

Zhou Xiaochuan, governor of the People’s Bank of China, gave the strongest hint yet from a senior official that China would abandon the unofficial dollar peg, in place since mid-2008. He said it was a “special” policy to weather the financial crisis.

“This is a part of our package of policies for dealing with the global financial crisis. Sooner or later, we will exit the policies.”

Pretty weak tea,* actually, and I think that everyone, even the PBC realizes that the current peg is unsustainable, and my guess, based on absolutely nothing, is that they are talking about talking because it’s a way to kick the can down the road.

*Pun not intended.†
†No, really, it was unintentional.

Europe Moves To Ban the Naked CDS

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Everyone says it’s like insurance, only with insurance, at least since 1746, it has been illegal to take out insurance on anything that you do not have, “an interest in the continued existence of the insured property,” but anyone can take out a Credit Default Swap (CDS) on anything.

All they need to do is find a counter-party.

Well, this may be coming to an end, since European regulators are looking at taking steps to forbid the practice:

José Manuel Barroso, European commission president, said it was “not justified” to buy credit default swaps “by unseen interventions on a risk, on a purely speculative basis”. Photograph: Vincent Kessler/Reuters

The European commission announced moves today to shore up the euro and ward off market pressure on Greece by considering a ban on complex derivatives allegedly being used to undermine the single currency.

The draconian move suggested by José Manuel Barroso, commission president, follows a joint campaign by the German chancellor, Angela Merkel, and the French president, Nicolas Sarkozy, for a prompt clampdown on credit default swaps (CDS).

I’m sure that Timmy “Naked CDS is Essential for Price Discovery” Geithner hates this, but who cares what he thinks: The only reason he’s still Secretary of the Treasury is because Barack Obama knows that the Republicans would filibuster his successor out of spite.

Economics Update

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Employment-to-Population Ratio: Men (25-54 Years)

Labour Force Participation Rate: Men (25-54 Years)

And Barry Ritholtz scares the hell out of us

Well, today is Jobless Thursday, and new unemployment claims fell by 29,000 to 469,000, which is better, but not good.

The numbers needs to be below 400K before we see anything near real job growth.

The 4 week moving average fell by 3,500 to 470,750, though that number is still bigger than it was at the start of the year.

Continuing claims fell significantly, to 4,500,000, and next week, I will be a no longer be a part of that number (I file for the prior 2 weeks on Sunday).

Still, the news is an improvement, as is the latest Beige Book from the Federal Reserve, which shows signs of employment.

In any case, the ADP report on private sector jobs shows a loss of 20,000 jobs, which is the best month from them since January 2008.

So, the picture is not good, but appears to be improving, but fragile.

But if you want to be scared, just look at Barry Ritholtz’s analysis of historical employment for adult males, see the graph pr0n.

On a more personal level, personal bankruptcies rose in February.

We are seeing continued growth in manufacturing, at least according to the Institute for Supply Management Manufacturing Index, which fell to 56.5 from 58.4, but since any reading above 50 means expansion, it’s still positive.

The services sector is also showing encouraging growth.

Still, real estate is a mess, with pending home sales index falling 7.6%, though part of this might be the snowpocalypse.

Still, interest rates are not a problem with the 30-year fixed-rate mortgage rate averaging 4.97 %, which is the first time in a while that it has been below 5%.

Finally, the Bank of England left its benchmark rates unchanged, as well as holding off on more quantitative easing. (Printing money)

When Your Sellout to the Banks Offends Chuck Schumer………

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So Chris Dodd has come up with a “bipartisan” proposal for protecting consumers from predatory financial institutions, he wants to make it the Federal Reserve’s job:

The chairman of the Senate banking committee is seeking Democratic support for a Republican proposal to house a new consumer-protection regulator inside the Federal Reserve, a compromise that could clear the way for bipartisan legislation on financial reform, according to sources familiar with the negotiations.

Embracing the proposal marks a turnaround for Sen. Christopher J. Dodd (D-Conn.), who has lambasted the Fed repeatedly over the past year for not protecting borrowers from lender abuse. It is unclear whether other Fed critics, both Democrats and Republicans, will follow suit. The Fed already is responsible for writing consumer-protection rules, but it did not prohibit some of the most abusive mortgage and credit card lending practices during the housing boom.

The proposal by Sen. Bob Corker (R-Tenn.) would place a presidential appointee inside the Fed with an independent budget and a mandate to write rules protecting consumers. Those rules, however, would be enforced by existing banking regulators.

Of course, the Fed is already the consumer protection agency, and they failed, and they don’t provide information to Congress, or to anyone else.

Even Chuck Schumer (D-NY) thinks that this is a bad idea, and Schumer’s career is largely based on raising campaign money from Wall Street fatcats:

Chairman Dodd is to be commended for working so diligently to come up with a bipartisan compromise on financial services reform, which demands urgent attention. But in my 20 years of trying to get the Federal Reserve to properly protect consumers, it has been an uphill, and very often unsuccessful, battle. I am very leery of any consumer regulator being placed inside the Fed.

You know, if you’ve lost Chuck Schumer on this idea, it’s time to tell the Republicans to go Cheney themselves, and jam them up and make them vote against financial reform, over, and over, and over again.

The regional Federal Reserve banks are literally owned by the banks, and the presidents of these regional banks hold a lot of sway, and 5 of these bankers sit on the FOMC, and we are to expect an organization that has already shown itself to be both hostile to consumer protection and unresponsive to consumer complaints to somehow protect consumers?

I know that Mr. Dodd wants to make sure that he has a source of income when he leaves office in 2011, but he has a pension coming to him of something in excess of $120,000/year, so he should be fine.

Stop sucking up to the banks, sir.

Vermont Senate Rejects License Extension for Nuke Plant

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Maybe it was the fact that Vermont Yankee has been leaking radioactive tritium into the ground water for some time:

The Vermont Senate blocked efforts by Entergy Corp. to win a 20-year license renewal for its Vermont Yankee nuclear power plant, an action that could encourage opponents of nuclear energy in other states.

The Senate vote, which was 26 to four, marks the first time a license renewal has been thwarted, and it sets the stage for the plant’s closure by 2012, when the license expires.

The vote was striking because the state relies on the plant for a third of its electricity. In the past, license renewals have been routine, allowing energy companies to squeeze more life out of aging plants. To date, the NRC has renewed 59 reactor licenses, and 19 are pending.

The vote, which reflected fears about safety after leaks of radioactive tritium were discovered at the plant last year, is a blow to Entergy, which had planned to spin off six reactors, including Vermont Yankee, into the nation’s first stand-alone nuclear power company, to be called Enexus Energy Corp.

Notwithstanding the ability of the nuclear power industry to lobby for subsidies and tax breaks, the problem is that people who have nuclear power know that the plants never finish on schedule, never finish on budget, and are expensive sources of power even with the subsidies.

This plant is 38 years old, and its cooling tower collapsed in 2004, so maybe this is a good time to shut it down.

Oshkosh Truck Bid Survives Contract Protests

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BAE Systems and Navistar International have had their protests on the FMTV contract award to Oshkosh overturned by the Army:

Oshkosh Corp. fended off a challenge from two competitors, keeping a U.S. Army contract to build armored trucks valued at as much as $3 billion. Oshkosh shares jumped in late trading.

Today’s decision by the Army lifts a stop-work order placed last year after losing bidders BAE Systems Plc and Navistar International Corp. protested to the Government Accountability Office, the Army said in a statement. The companies said the Army didn’t fully weigh the risk in Oshkosh’s proposal for the Family of Medium Tactical Vehicles, or FMTVs.

The GAO in December determined that the Army didn’t consider that Oshkosh lacked key equipment, allowing the company to receive the same high production-capability rating as BAE, which had made the trucks since 1991. The agency asked the Army to reevaluate the bids.

I’m not surprised, it was a lower bid, and the truck itself is designed to be assembled out of component parts with little, if any machining, welding, etc. being done at the plant.

At least that was the scheme when I worked there.* They did not intend to have a machine shop or an electrical shop, because they expected everything to come in to specification from the vendors.

If this is a fixed price contract, the only risk here is that of Oshkosh.

*Full disclosure I worked at Stewart & Stevenson, Tactical Vehicle Systems, in Sealy, TX on the FMTV in 1992 and 1993.†
†Yes, I have worked everywhere. Maybe I can’t hold down a job, but more likely this has been my role as “technical hit man”, where you are parachuted in to take care of a specific need.

Christopher Dodd Continues to Sell Out

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So Senator Dodd, to be former Senator Dodd in January, continues to audition for his next job as a bank lobbyist:

Senate Banking Committee chairman Christopher Dodd, D-Conn., is expected to introduce new financial reform legislation next week that excludes applying a fiduciary standard to brokers offering investment advice.

The provision was circulated two weeks ago by Sen. Tim Johnson, D-S.D., a Banking Committee member. Rather than classifying certain brokers as registered investment advisers, Mr. Johnson’s proposal would require the Securities and Exchange Commission to conduct a study of regulatory standards for brokers and advisers, then propose rules on the issue.

“Fiduciary standard” means that they are required to act in the best interest of their clients, as opposed to the current standard, which is basically that you have to use lube when you anally rape your clients.

Fried in Greece

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So, now it’s time to look at the mess that is Greece.

Greece has been a mess for a very long time, and of the Nato members who joined the Euro, it’s probably the one that should not have joined.

John Mauldin notes, correctly, that the core of the problem is that the terms of joining the Euro block were excessively generous for the less well off nations, basically Germany and France successfully created a mechanism which over valued their national currencies.

This served to both minimize their labor cost advantages with regard to Northern Europe and to provide a market for northern European products:

First, we need to go back to the creation of the euro. Most of the Mediterranean countries that are now in trouble were allowed into the union with an exchange rate that overvalued their currencies relative to the northern countries, but especially to Germany. That meant that Greek consumers could buy products and services that previously may have been out of their reach. Plus, with government debt at low rates, the Greek government could borrow more to finance deficit spending, without the threat of higher interest rates. And Greece began to increase its debt with abandon.

Of course, there was the problem that the debt, and deficits, were exceeding the Euro Zone mandates, but with the use of some clever financial instruments it traded with about 15 banks, most notably that great vampire squid wrapped around the face of humanity,* Goldman Sachs, it concealed this debt from regulators:

The bankers, led by Goldman’s president, Gary D. Cohn, held out a financing instrument that would have pushed debt from Greece’s health care system far into the future, much as when strapped homeowners take out second mortgages to pay off their credit cards.

It had worked before. In 2001, just after Greece was admitted to Europe’s monetary union, Goldman helped the government quietly borrow billions, people familiar with the transaction said. That deal, hidden from public view because it was treated as a currency trade rather than a loan, helped Athens to meet Europe’s deficit rules while continuing to spend beyond its means.

Athens did not pursue the latest Goldman proposal, but with Greece groaning under the weight of its debts and with its richer neighbors vowing to come to its aid, the deals over the last decade are raising questions about Wall Street’s role in the world’s latest financial drama.

Note also that this was a mess that the Panhellenic Socialist Movement inherited from the right wing New Democracy party:

George Alogoskoufis, who became Greece’s finance minister in a political party shift after the Goldman deal, criticized the transaction in the Parliament in 2005. The deal, Mr. Alogoskoufis argued, would saddle the government with big payments to Goldman until 2019.

Mr. Alogoskoufis, who stepped down a year ago, said in an e-mail message last week that Goldman later agreed to reconfigure the deal “to restore its good will with the republic.” He said the new design was better for Greece than the old one.

It sounds a lot like the mess that Bush and His Evil Minions™ left for us.

One of the problems in dealing with this is that the Germans, remembering the hyper-inflation of Wiemar Germany as if it were yesterday, are suggesting that austerity measures are the way to go, and there are rumblings from them that they want Greece expelled from the Euro and losing voting rights in the EU Parliament.

In response, Greece is accusing Germany of not providing compensation for the stuff that they stole from Greece in WWII:

Athens has accused Germany of failing to meet its World War II compensation obligations following the Nazi occupation of Greece in 1941, a claim Berlin has firmly rejected.

In a radio interview on Wednesday (24 February), Greek Deputy Prime Minister Theodoros Pangalos criticised Germany’s attitude towards the ongoing Greek debt crisis, adding that Athens had never received adequate war reparations.

“They took away the Greek gold that was at the Bank of Greece, they took away the Greek money and they never gave it back. This is an issue that has to be faced sometime in the future,” Mr Pangalos told the BBC World Service.

<sarcasm>It’s so nice when you have mature people solving problems.</sarcasm>

One of the problems here is that the prescription by the central bankers is more austerity for Greece, but the reality is that Greece has among the most austere social safety net, and spending in the Euro zone.

The real problem is that because of endemic tax evasion and systemic corruption throughout the bureaucracy, their tax collections are truly pathetic.

One bright side to all this is that a number of people are starting to realize that Goldman Sachs is not simply a banker, but that all roads on most of this corruption lead to the Squid*, most notably those in the European Commission, who are, if Simon Johnson is correct, going to execute a detailed audit of Goldman’s dealings in Europe.

It doesn’t help that Goldman Sachs engaged in similar maneuvers with other European governments:

Greece’s 2001 deal to swap some of its debt using currency derivatives was in line with what other euro-zone countries were doing, Yiannos Papantoniou, the country’s finance and economy minister when the deal was made, told CNBC.com Wednesday.

………

“We took a loan that was to be repaid in 2019,” he said in a telephone interview. “It was public. I know that what we’ve done then was consistent with what was done by many euro zone countries.”

………

Italy, France and Spain were among the euro zone members doing such swaps at the time, he added. Eurostat, the European Union’s statistics office, has asked Greece for explanations on these debt swaps by Feb. 19.

What’s more it appears that these transactions may have been a part of a fraud perpetrated by the banks on these governments, which is why law enforcement officials in Milan have frozen accounts of a number of banks, “UBS AG, Deutsche Bank AG, JPMorgan Chase & Co. and Depfa Bank Plc,” as a part of an investigation.

BTW, while we are at it, it should be noted that Bank of Italy Governor, and dark horse candidate for ECB president, Mario Draghi used to work with the Vampire Squid.*

As it stands right now though, it appears that Greece should be able to do its required borrowing for the next 2-3 weeks.

*Alas, I cannot claim credit for this bon mot, it was coined by the great Matt Taibbi, in his article on the massive criminal conspiracy investment firm, The Great American Bubble Machine.