Monday, June 27, 2011

EU discovers it's Special Purpose

The French have come up with a solution for the Greek debt problem! They're going to create a Special Purpose Vehicle ( no, I'm not kidding.) Here's how it works. Bondholders actually get about 30% of what they're due at maturity. The rest is voluntarily rolled over into 20 and 30 year bonds. Here's the good part. The banks, who were the bondholders don't have to carry the new Greek bonds on their books. Instead, the new SPV will own the bonds and the banks will own shares of the SPV. Hmmmm, where have we seen this scheme before?

The beauty is, when the EU has to cover the bonds in the future, they won't be bailing out Greece, or the banks, they'll be bailing out this SPV. I guess they think that will be more politically palatable to EU taxpayers.

Let's review. To deal with toxic assets, bundle, distribute, insure, bail, repeat.

Thursday, June 16, 2011

A Real Cushy Job

A guest post by Tim Churchill

With all the potential Republican candidates falling in and falling out, it becomes hard to know just who might square off against Mr. Obama in 2012. Some of the quitters might even return to the brawl. I suppose you can’t blame them for wanting such a cushy job. And you certainly can’t blame Mr. Obama for wanting to keep it. After all, he has time for golf and for vacations at the drop of a hat. He gets to take crowds of people to foreign countries as his “entourage” without regard for cost or the inconvenience to those who must be displaced by his desires, or the desires of those in his group.

As an added perk for his vacations, how about his right to hop aboard the luxurious airplane called “Air Force One” with all his attendees? Of course we don’t call the golfing trips vacations. Those are just short breaks, for his relaxation. I can just imagine how Mr. Obama might shake a bit at the thought of losing such a job. Shortly before he was catapulted into it, he didn’t have a pot to cook in. He took trips abroad without a valid passport (or did he?). His friends at school thought he was a foreign exchange student, or something like that.

Thinking of his position, where the buck stops, isn’t it great to have so many Government employees to share those vast responsibilities? When you are President you can have a Czar for almost anything. With so many people in charge of almost everything, you can just tell someone what you want and, “voila” it gets done. Since Mr. Obama became President, the number of Government employees has doubled. Isn’t that great? Just think of all those people added to the Government payroll. No worries about the money rolling in. Oh, and don’t forget this, with all those Government folks paying their dues to the Union leaders, his supporters are ready to vote.

And here is something you may not have thought about. The pay is really good. Mr. Obama has been to the bank enumerable times. His deposits were over five million dollars for just his first year in office. How can you beat that, even in the Chicago underworld? The really big deposits though will come after his reelection. That will be when he starts collecting for all those appointments to high places. Never mind that his withdrawals will contribute to the bankruptcy of the Treasury. Don’t forget, he owns the printing press!

It is hard to imagine, wanting to leave such a job. No production is required. If a crises occurs, go golfing, or to South America. Someone will take care of it. Big decisions can be delayed for as long as it takes. And that is the greatest benefit of all the pros. You don’t have to do a thing except go around patting people on the back, making speeches, throw in a bit of praise for the military And the Trade Unions, just to keep the masses happy. Just sign off on the spending bills until we are flat broke, literally, and he will have the Socialist country he wants.

One more thing: The job virtually cries out for edicts, Executive Orders, and Legislation to get rid of that cumbersome Constitution. What a waste of paper that was. Mr. Obama doesn’t have a lot of time for silly questions, like where he goes to church, or why it took two years to come with a Birth Certificate, or why he should worry about the economy. He has appointed Czars to handle that. What a great country, huh?