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Global insights audio-slides-07-15-11
Global insights audio-slides-07-15-11
Global insights audio-slides-07-15-11
Global insights audio-slides-07-15-11
Global insights audio-slides-07-15-11
Global insights audio-slides-07-15-11
Global insights audio-slides-07-15-11
Global insights audio-slides-07-15-11
Global insights audio-slides-07-15-11
Global insights audio-slides-07-15-11
Global insights audio-slides-07-15-11
Global insights audio-slides-07-15-11
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Global insights audio-slides-07-15-11

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  • German Finance Minister Wolfgang Schäuble said the downgrade were totally unjustified and quote"We must break the oligopoly of the rating agencies," he said. European Commission PresidentJose Manuel Barroso said that the EU was working on additional measures to regulate the agencies, which would be presented by the end of the year. "We plan measures to improve (the) methodology and transparency of (the) rating of sovereign debt, to reduce excessive reliance by financial institutions on credit rating, to further reduce conflicts of interest and introduce more competition,"
  • We see that Société Générale has Assets (read that as loans outstanding) of 45% of France’s GDPWe see that the banks with the biggest exposure to Greece are French Banks and they rank 1st, 2nd and 3rd.Not a good place to be if ‘haircuts’ are in the offereing.
  • I mentioned on Wednesday that QUIETLY everyone is buying French CDs products.IT IS NO JUST GREECEConsider the Italian situation that finally blew up this week.
  • The French banks are into Italy in a BIG WAY as is everyone else – But for the French banks its more than Greece and Italy – its all the PIIGS where they have been making a fortune since the EU game into existence.
  • This really shows it. Everybody talks about Germany but it is FRANCE and with ONLY 3 banks in France.
  • Back to Italy for a second. The previous chart on Italy wasn’t as clear as this one.
  • Remember Christian Lagarde’s sudden appointment?
  • Here is what has been happening in case you haven’t been paying attention.
  • The Fix is in.
  • If you own a Greek bond that matures by June 2014, you keep 30% of the redemption as cash, and roll over 70% into a 30 year Greek Government Bond. The Greeks will have to pay an annual coupon, or interest rate, of between 5.5% and 8%. The precise rate will depend on future economic growth but you can be assured the annual coupon to the banks will be closer to the 8.0%. Not bad!! Of the money received Greece only gets 50% of the original rollover amount. Greece will lend the other 20% to a special purpose vehicle, another well-know construction from the subprime mortgage crisis. The SPV invests into AAA rated government or agency bonds, and issues a 30 year zero coupon bond. The purpose of this is to guarantee the principle of the 30-year Greek government bond that you just bought. With this construction, the downside to your losses is limited. More important, the accounting rules allow you to pretend that you are not incurring any losses. As Wolfgang Munchau states in the FT "if this was any other field of human activity, you would go to jail if you accepted let alone made such an indecent offer.
  • BRADY BONDS
  • Transcript

    • 1. This chart is from the discussion recordedJuly 15th, 2011<br />FRANCE<br />Listen to the original recording for this slide at either www.GordonTLong.com/GlobalInsightsor www.TraderView.com/GlobalInsights<br />
    • 2. This chart is from the discussion recordedJuly 15th, 2011<br />FRANCE<br />Listen to the original recording for this slide at either www.TraderView.com/GlobalInsights or www.GordonTLong.com/GlobalInsights<br />
    • 3. This chart is from the discussion recordedJuly 15th, 2011<br />FRANCE<br />Listen to the original recording for this slide at either www.TraderView.com/GlobalInsights or www.GordonTLong.com/GlobalInsights<br />
    • 4. This chart is from the discussion recordedJuly 15th, 2011<br />FRANCE<br />Listen to the original recording for this slide at either www.TraderView.com/GlobalInsights or www.GordonTLong.com/GlobalInsights<br />
    • 5. This chart is from the discussion recordedJuly 15th, 2011<br />FRANCE<br />Listen to the original recording for this slide at either www.TraderView.com/GlobalInsights or www.GordonTLong.com/GlobalInsights<br />
    • 6. This chart is from the discussion recordedJuly 15th, 2011<br />FRANCE<br />Listen to the original recording for this slide at either www.TraderView.com/GlobalInsights or www.GordonTLong.com/GlobalInsights<br />
    • 7. This chart is from the discussion recordedJuly 15th, 2011<br />EVERYBODY IS HAPPY!!!!<br />Listen to the original recording for this slide at either www.TraderView.com/GlobalInsights or www.GordonTLong.com/GlobalInsights<br />
    • 8. This chart is from the discussion recordedJuly 15th, 2011<br />PLACES OF POWER<br />Listen to the original recording for this slide at either www.TraderView.com/GlobalInsights or www.GordonTLong.com/GlobalInsights<br />
    • 9. This chart is from the discussion recordedJuly 15th, 2011<br />THE FIX IS IN!<br />IFSR9<br />The International Accounting Standards Board (IASB) has advised Europe to implement their International Financial Reporting Standard 9 (IFRS 9), which is nothing but a sly and underhanded &quot;mark to fantasy&quot; trick posing as a &quot;standard&quot;. <br />Think the US&apos; FASB 157 that saved the US and reversed the markets in March 2009. Basically, IFRS 9 allows investors to hold assets at cost as long as they don&apos;t try and sell them. That Greek haircut which is being discussed shaves off as much as 60% of debt value. But they may still appear on the books at 100%. <br /> <br />That&apos;s really great. Unless you would like to know what your shares are really worth, and what your pension fund holds. <br />Who needs transparency, or reality, when you can just spend your days dreaming of riches? <br />Meet Hans Hoogervorst, Your Next IASB Chairman This is the man that is going to make one high-quality set of global accounting standards a reality.<br />Listen to the original recording for this slide at either www.TraderView.com/GlobalInsights or www.GordonTLong.com/GlobalInsights<br />
    • 10. This chart is from the discussion recordedJuly 15th, 2011<br />FRENCH PROPOSAL<br />Listen to the original recording for this slide at either www.TraderView.com/GlobalInsights or www.GordonTLong.com/GlobalInsights<br />
    • 11. This chart is from the discussion recordedJuly 15th, 2011<br />“BRADY BONDS”<br />Listen to the original recording for this slide at either www.TraderView.com/GlobalInsights or www.GordonTLong.com/GlobalInsights<br />
    • 12. This chart is from the discussion recordedJuly 15th, 2011<br />WEEKLY WRAP<br />Listen to the original recording for this slide at either www.TraderView.com/GlobalInsights or www.GordonTLong.com/GlobalInsights<br />

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