Showing posts with label fire. Show all posts
Showing posts with label fire. Show all posts
Tuesday, April 16, 2013
Saturday, April 13, 2013
Liar, Liar, Pants on Fire; Spoon-Fed Demands by the Number
On Wednesday I reported Fools in Cyprus to Sell Gold, Hike Corporate Taxes to Finance Small Part of Bailout.
That rumor was quickly (but unbelievably) denied.
On Thursday, the International Business Times reported Cyprus Denies Rumor It Will Sell Its Gold To Raise Funds; Option Raises Same Question For Others.
A Central Bank of Cyprus spokesperson said Wednesday that rumors stating that it would sell 75 percent (approximately 10 tons or $ 523 million) of its gold were inaccurately reported by Reuters. Aliki Stylianou told the Cyprus News Agency, or CNA, that no such deal was ever “raised, discussed or debated” with the bank’s board of directors.
No Such Deal Ever Raised! Really?
In spite of denials that any such deal was ever “raised, discussed or debated” I knew what was about to happen. Sure enough ….
Cyprus Gold Sale Must Cover Emergency Loan Loss
ECB President Mario Draghi says Any Cyprus Gold Sale Must Cover Emergency-Loan Loss
European Central Bank President Mario Draghi said the profits of any gold sales by the Cypriot central bank must be used to cover losses it may sustain from emergency loans to Cypriot commercial banks.European creditors today left a possible gold sale in the hands of the Cypriot central bank, which manages 13.9 metric tons of the metal, according to the World Gold Council.
“The decision is going to be taken by the central bank,” Draghi said after a meeting of euro-area finance officials in Dublin. “What’s important, however, is that what is being transferred to the government budget out of the profits made out of the sales of gold should cover first and foremost any potential loss that the central bank might have from its ELA.”
ELA stands for Emergency Liquidity Assistance, a lifeline that can be offered by national central banks in the euro region to commercial banks that can’t get funding.
Asked about a letter he wrote to Cyprus President Nicos Anastasiades, Draghi said the letter is “very, very clear.” He said the government must abide by the central bank’s handling of the gold stock, since it is independent from political control under European rules.
More Lies Than One
Did you catch that last statement? Draghi says central bank handling of gold is “independent from political control under European rules”.
Apparently independence is relative. The Central Bank of Cyprus has no such independence. It is being forced to sell its gold to cover Emergency Loan Assistance programs by the ECB.
Want more lies? Check this out.
Speaking alongside Draghi, Dutch Finance Minister Jeroen Dijsselbloem said “selling gold has always been an option put forward by the Cypriot authorities. But as mentioned in the program documentation, this is a decision to be made independently by the Cypriot central bank. And it’s not any demand from the troika or the eurogroup.“
So this was an independent decision made by the central bank of Cyprus, yet denied by the central bank of Cyprus. Apparently the gold sale just happens to be the only way Cyprus can cover losses on ELA, no other method would do.
So Cyprus is forced to dump most of its “excess” gold reserves. A reader asked me yesterday what was meant by “excess” gold reserves. Certainly the name is strange. It implies central banks can have too much of the stuff. They can’t.
In reality, the term means whatever the hell ECB wants it to mean. In this case, the term is a convenient way to make sure the noose in Cyprus’ nose is as tight as can be.
I discussed that idea two days ago in the link at the top. Here is the pertinent snip.
Road to HyperinflationRaising taxes in the middle of a recession is bad enough. Cyprus actually needs a lower tax rate to attract business following its banking debacle.
Selling gold is downright idiotic. Gold backing can prevent a currency from going completely worthless. Should Cyprus leave the eurozone, its small holding of gold would at least put some bid on its currency.
Selling of gold and hiking of corporate taxes puts another noose through the nose of Cyprus (just what the nannycrats in Brussels wants and precisely what the average Cypriot should fear).
A Greek-like implosion with massive unemployment and endless recessions is on the way.
Leaks and Still More Lies
About that Cyprus shortfall… As I expected, it’s a lot bigger than the Troika expected, assuming you believe the Troika was telling the truth about the size of the needed bailout.
The Guardian reports Cyprus forced to find extra €6bn for bailout, leaked analysis shows
Cypriot politicians have reacted with fury to news that the crisis-hit country will be forced to find an extra €6bn (£5bn) to contribute to its own bailout, much of which is expected to come from savers at its struggling banks.A leaked draft of the updated rescue plan, which emerged late on Wednesday night, revealed that the total bill for the bailout has risen to €23bn, from an original estimate of €17bn, less than a month after the deal was agreed – and the entire extra cost will be imposed on Nicosia.
Visiting Athens, the Cypriot parliament’s president, Yannakis Omirou, said the tiny island nation had been “served poison” by its EU partners.
The €23bn overall bill is larger than an entire year’s output from the Cypriot economy.
Cyprus Hammered Into Submission
Step by step, Cyprus has been hammed into submission. Its economy has been ruined for at least a decade.
Recall the original deal was €13bn. It is now €23bn.
Recall that Cyprus Popular Bank, Laiki, was supposed to have 30% losses. Guess what?
Spoon-Fed Demands by the Number
- Laiki 100% wiped out
- Capital controls
- Losses exceed the size of the entire Cypriot economy
- Cyprus would have to sell its gold
- The Cypriot Central Bank would lose its independence
- Cyprus will go into an economic depression for a decade to pay for the “bailout”
Cyprus has been spoon-fed a pack of escalating demands by the Troika.
Had Cyprus initially understood the totality of what was going to happen, Cyprus may have done the right thing which should now be obvious: Tell the Troika to go to hell, default, exit the eurozone.
It’s still not too late, but Cyprus needs to do so before it sells its gold.
Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com
Liar, Liar, Pants on Fire; Spoon-Fed Demands by the Number
Thursday, April 11, 2013
Ready, fire, aim: Why Silicon Valley shoots from the hip
Facebook CEO Mark Zuckerberg is creating a nonprofit group of tech leaders who want to reform immigration. Unfortunately, the group sent out an email that Politico says is packed with errors, like giving out the wrong name for the organization, and using language that Facebook says is “poorly-chosen,” that could give a “misimpression of the views and aspirations of the group.” Facebook practically runs the world of social media — so how does a blunder like this happen?
It’s supposed to go “Ready, aim, fire.” But in Silicon Valley, there can be a rush to get out new technology. Luke Williams, who teaches innovation at NYU’s Stern School of Business, says that can cause problems.
“So what they’re really doing is just the firing and the aiming,” he says. “And they’re forgetting about the ready part.”
Williams says the slogan in the valley has been rearranged to read, “Ready, fire, aim” — which means some crucial steps are missing.
“But you know it doesn’t replace thinking, vision and strategy. There’s still an absolute need to do that, particularly if you’re talking about doing something completely new.”
Like… a bunch of tech company CEOs staring a nonprofit.
Andrea Matwyshyn, a professor of legal studies and business ethics at Wharton, says Silicon Valley’s speed is also possible because legal protection is built into their products. Think about the web services you use. Matwyshyn notes that when you click yes on those agreements it means YOU are responsible for any problems and tech companies can comfortably skip some of the protections that, say, a toymaker, would have in place.
“Such as the legal department saying we need to run three types of checks on this product because we’re concerned about product liability concerns,” Matwyshyn says.
Because some tech companies have gotten so good at shielding themselves from liability, hey’ve become sloppy with everyday operations. Louise Kehoe, director of reputation risk at Ogilvy Public Relations, helps train corporations to safeguard leadership from their own errors. She likes to tell her clients stories about other executives who’ve made mistakes.
“Without identifying them of course,” she says.
One corporate executive tweeted about having a great day — on the last day of the quarter. Which got him a slap on the wrist from the Securities and Exchange commission. So Silicon Valley CEOs — know that it could have been worse.
Moral of the story: Think before you tweet, and aim before you fire.
Ready, fire, aim: Why Silicon Valley shoots from the hip
Tuesday, April 9, 2013
Wal-Mart funds supplier training after Bangladesh fire
Clothes printed with Disney characters are seen among debris in the Tazreen Fashions garment factory, where 112 workers died in a devastating fire last month, in Savar November 30, 2012.
Credit: Reuters/Andrew Biraj
Wal-Mart funds supplier training after Bangladesh fire
J.C. Penney board comes under fire for CEO switch
Ron Johnson testifies in New York state Supreme Court in Manhattan March 1, 2013.
Credit: Reuters/Thomas Iannaccone/Pool
(Reuters) – Attention J.C. Penney (JCP.N) shoppers: Meet the new boss. Same as the old boss.
The struggling department store chain parted ways with Chief Executive Ron Johnson, who failed to win over shoppers and investors with his everyday-low-price strategy, and on Monday rehired Johnson’s predecessor, former CEO Myron Ullman, to revive the company.
Johnson’s botched transformation led to a 25 percent decline in sales last year, with the bleeding worsening each quarter. Shares in J.C. Penney rose nearly 11 percent in afterhours trade after a CNBC report that Johnson was out, but then fell 6.2 percent to $ 14.88 after Penney disclosed Ullman’s return.
“Certain investors had beaten the drum saying that a change was needed and Johnson wasn’t the guy,” said William Frohnhoefer, an analyst at BTIG, who added investors have concerns about Ullman. “All the criticism they had leveled at the company before is going to be resuscitated now.”
Johnson, previously a well-regarded retailer who pioneered the “cheap chic” concept at Target Corp (TGT.N) in the 1990′s before building Apple Inc’s (AAPL.O) retail chain, had promised at the start of his stint to remake Penney into “America’s favorite department store.”
He tried to breathe new life into the 111-year-old chain by replacing its traditional coupons and sales events with everyday low prices. He also carved the retailer’s larger locations into collections of branded boutiques for the likes of Joe Fresh, Jonathan Adler and Martha Stewart. Johnson had plans for 100 such shops at Penney’s 700 locations.
While the shop-in-shops have shown promising results, Penney’s price sensitive, deals-obsessed shoppers balked at Johnson’s pricing strategy, which he did not bother to test.
Ullman told Reuters in an interview that his first step as returning CEO would be to take a close look at Penney’s books before making any decisions about whether he would forge ahead with Johnson’s shop plan or stop it.
“What’s worked well so far is having some attractions within each area,” Ullman said.
At the end of fiscal 2012, Penney had $ 930 million in cash, some $ 577 million less in cash than a year earlier, despite selling off a number of assets and cutting nearly $ 1 billion in expenses. Still, he noted, there was something to be said for making the stores more interesting.
SURPRISE RETURN
Johnson’s ouster had been the object of intense speculation for weeks, but Ullman’s return was a surprise, considering how harshly his tenure had been condemned by Penney’s largest shareholder, hedge fund manager Bill Ackman, who handpicked Johnson and backed his vision.
In a May 2012 presentation, Ackman’s Pershing Square called Penney “chronically mismanaged” and noted the stock’s declines during Ullman’s tenure. Its shares fell about 15 percent while he was CEO from 2005 to 2011. Still, when Ullman left, the share price was double Monday’s price.
Ullman said Ackman’s criticism was not “entirely balanced” given how hard the 2007-2009 recession hit Penney’s customers.
Ackman could not be reached for comment on the latest changes at Penney. But the hedge fund manager did acknowledge last week that the CEO had made “big mistakes,” and that the impact of those mistakes had been “very close to a disaster” for the retailer.
At least one retail expert said Ullman’s return might presage a sale of the retailer.
“The only reason why I would name Ullman as the CEO would actually be as a temporary fix just because he does know so many people inside the company, and they have faith in them,” said Brian McGough, managing director and head of the retail group at Hedgeye Risk Management. “He could calm waters and he could help to put lipstick on the pig and get it sold.”
The latest change in the corner office is expected to cast a harsh light on the board ahead of Penney’s annual meeting on May 17, in Plano, Texas, one corporate governance expert said.
“When you get a board that keeps making errors like that, then you start to lose faith not just in the CEO but in the board as well,” said Paul Hodgson, an independent corporate governance analyst in Camden, Maine.
Analysts expect shares to be under pressure while Ullman tries to stem the bleeding, especially if that means changing gears abruptly again.
“This is like (Tesla co-founder) Elon Musk announcing that Tesla (maker of the first electric car) is changing gears and will now focus on gas-powered vehicles,” said David Tawil, whose hedge fund Maglan Capital had bet Penney’s stock would fall.
(Reporting by Phil Wahba; Additional reporting by Dhanya Skariachan in New York, Jessica Wohl in Chicago, Lisa Baertlein in Los Angeles and Svea Herbst-Bayliss in Boston; Writing by Ben Berkowitz; Editing by Edward Tobin, Tim Dobbyn and Ken Wills)
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J.C. Penney board comes under fire for CEO switch
Friday, March 22, 2013
Merkel ally says Cyprus "playing with fire"
BERLIN, March 22 |
BERLIN, March 22 (Reuters) – A leading conservative ally of German Chancellor Angela Merkel said on Friday that Cyprus was “playing with fire” and needed to come up with a workable proposal for plugging a multi-billion-euro financing gap urgently.
Volker Kauder, leader of the ruling Christian Democrats (CDU) in parliament, also rejected the suggestion that Cyprus might nationalise pension funds of semi-public companies to fill the hole, saying this was a worse solution than hitting small savers in the Mediterranean island’s banks.
“I don’t think this can happen, because this would be huge for pensioners, for the small people. So I don’t think this is a proposal that helps,” Kauder told public television station ARD.
“If a proposal comes, I am optimistic. But we aren’t there yet,” he added. “I still believe we will get a settlement, but Cyprus is playing with fire.”
Merkel ally says Cyprus "playing with fire"
Merkel ally says Cyprus "playing with fire"
BERLIN, March 22 |
BERLIN, March 22 (Reuters) – A leading conservative ally of German Chancellor Angela Merkel said on Friday that Cyprus was “playing with fire” and needed to come up with a workable proposal for plugging a multi-billion-euro financing gap urgently.
Volker Kauder, leader of the ruling Christian Democrats (CDU) in parliament, also rejected the suggestion that Cyprus might nationalise pension funds of semi-public companies to fill the hole, saying this was a worse solution than hitting small savers in the Mediterranean island’s banks.
“I don’t think this can happen, because this would be huge for pensioners, for the small people. So I don’t think this is a proposal that helps,” Kauder told public television station ARD.
“If a proposal comes, I am optimistic. But we aren’t there yet,” he added. “I still believe we will get a settlement, but Cyprus is playing with fire.”
Merkel ally says Cyprus "playing with fire"
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