Financial News: Cyprus In Layman’s Terms

Cyprus In Layman’s Terms

In case you’ve heard it and didn’t understand or have been living under a rock, in terms of financial news, not that everyone pays attention to financial news, the tiny nation of Cyprus is doing something unprecedented. They are stealing depositors money.

The news is reporting it and the most casual way possible. If they told you exactly what was going on, and what other options were available, a widespread panic would ensue.

So here’s the basics of this report. The tiny nation of Cyprus, basically serves as the offshore banking for much of Europe. They are the Cayman Islands of Europe. People deposit their huge sums there, and pay very little taxes. Because the island’s banks gets huge sums of money, they thought to make even more money by investing it themselves. Who did they invest in? Greece. Wait, are you thinking what I’m thinking? That’s right, Greece is insolvent and can’t pay its creditors, including Cyprus.

US STOCKS-Wall Sreet Rises as JPMorgan Lifts Government Debt Gloom

By Edward Krudy

NEW YORK, July 14 (Reuters) – Wall Street stocks rose on Thursday as higher profit from JPMorgan (JPM.N) offset concern after Moody’s threatened to downgrade the United States’ top credit rating if the federal borrowing limit is not raised.

A report showing new claims for U.S. jobless benefits fell slightly last week also helped buoy stocks.

JPMorgan’s results were welcomed by investors who have been buffeted by worries about excessive government debt at home and in Europe. The bank’s forecast-beating quarter came as it wrote off fewer bad mortgages and credit card loans, sending the shares up 3 percent to $40.82.

But analysts said deadlocked debate over budget cuts and raising the debt ceiling would weigh on the market after Moody’s announcement on Wednesday.

It came shortly after the ratings agency gave Portuguese debt a junk rating and as Europe’s debt crisis appeared to be spreading.

Tim Ghriskey, chief investment officer of Solaris Asset Management in Bedford Hills, New York, said that JPMorgan’s results were a boost for the market but sentiment remained sensitive to big macro issues.

“There seems to be some hope this morning that the media focus on the White House and Congress will result in a budget deal and the two sides will get together,” he said. “When that news comes out — if it does — we should see a pop in the market.”

The Dow Jones industrial average .DJI gained 78.07 points, or 0.62 percent, to 12,569.68. The Standard & Poor’s 500 Index .SPX rose 8.23 points, or 0.62 percent, to 1,325.95. The Nasdaq Composite Index .IXIC added 18.43 points, or 0.66 percent, to 2,815.35.

The equity market has generally taken the debt ceiling wrangling in its stride and continues to do so — judging by the lack of follow-through from the selloff in futures last night when Moody’s action was announced.

U.S. President Barack Obama clashed with Republican lawmakers on Wednesday in a fierce White House meeting on deficit reduction that left a deal in question as the clock ticked toward a debt default.

Euro zone countries continued to grapple with the thorny issue of involving the private sector in tackling Greece’s debt pile as they prepared for a meeting to decide support for the country next week.

Wall Street ended higher on Wednesday on expectations further stimulus measures could be on the horizon after Federal Reserve Chairman Ben Bernanke said the Fed is ready to ease monetary policy further if economic growth and inflation slow much more.

Shares of Yum! Brands (YUM.N) rose 3.3 percent to $57.42 as the fast-food firm raised its full-year earnings forecast late on Wednesday after China helped deliver quarterly earnings for the company that topped Wall Street’s forecast.

Marriott International Inc (MAR.N) fell 7 percent to $34.42 as the hotel firm reported higher quarterly earnings that matched analyst estimates and gave a tepid forecast for the year, also late Wednesday.

ConocoPhillips (COP.N) will split itself into two by spinning off its refining arm, the third-largest U.S. oil company said on Thursday, sending its shares up 5.6 percent to $78.58.

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The United States to Remove Itself from the United Nations

Getting Out of the United Nations

United Nations leader sentenced in corruption scandal. Department head at United Nations caught in falsifying evidence. Policy chief exposed for trying to defraud general assembly at United Nations (UN). European Union forms Eurozone. India, China, Brazil and Russia believe they can form their own little U.N. and the block can really control the world resources, talent and even finances. At a time like this congress proposes that the United States excuse itself from United Nations membership. The body is now rife with corruption and filled with petty dictators that the depth of taint is unassailable. Not only can nothing be done, but nothing can be done with any sense of trust that the facts can trusted. President George W. Bush going before the United Nations and presenting completely false evidence of weapon of mass destruction found in Iraq was the nail in the coffin. When the last standing super power shows a complete lack of respect for the body and shows evidence of corruption the rest of the body was not long for a complete autopsy. While Bush’s corruption did not single-handedly corrupt the entire U.N., he did put the capstone on it.

At 28% of its operating cost, in the billions of dollars annually, America cannot afford to be a part of the now defunct body. With the latest scandal of the swine flu hoax and the global warming hoax revealed, Congress is hard pressed to continue justifying paying so much money to be a part of the circus. Governor Mike Huckabee and others have all thrown in the towel on the organization and congress has taken steps to excuse us from this tainted organization.

The straw that broke the camel’s back, as if more straws were needed, was found when it was revealed that the general assembly has now adopted a Hegelian world policy, i.e. removal of national governments in favor of a one world government, all national sovereignty to be removed, by force if necessary.

Congress, in its infinite wisdom, has finally seen the writing on the wall. The story was leaked by the U.S. Department of State. Apparently, it was an act done out of their own self preservation. Had the leak not happened, it is unclear how long this would have been kept from the public. Specifically what was leaked was the fact that clear evidence was shown that the U.N. has adopted this united government stance and they are poised to act on it.

Conclusion

There are not many things I agree with Congress on, but this one subject I do. The United States cannot be a party to a body that is espouses a Hegelian world policy, forcibly removing national governments. I am pretty sure that our government might resist this. I don’t know. Politicians are pretty stupid, but are they that stupid? I cannot imagine Harry Reid just stepping aside, just because.

Can you imagine if U.N. “peacekeepers” descended on Washington and removed Congress? I don’t know if I would cheer or be mad.

When Reagan removed us out of UNESCO (United Nations Educational, Scientific and Cultural Organization), I wonder why he didn’t just remove us from the U.N. altogether. He did it quietly and there was not much press on the matter. He could have quietly excused us and no one would have said anything.

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Market Outlook for Greece

Greek Government Steps In to Avoid Total Collapse

The Greek government is taking strong steps to avoid a total meltdown. As if its own financial crisis weren’t enough, it was found that it’s lending practices and financial measures are completely in violation of Eurozone standards. These violations are what led to the countrie’s woes. Debts that are more than the national income. Cheap lending that caused huge bubbles and collapses along many markets. We’re still talking about Greece right?

The proposed plans are as follows. One of the primary causes of their financial crisis was their spending. The government has started slashing away at spending and has implemented austerity measures aimed at reducing the deficit by more than €10 billion ($13.7 billion). To bring in more income or save on spending it has:

• raised taxes on fuel,
• raised taxes on tobacco and alcohol,
• raised the retirement age by two years,
• imposed public sector pay cuts
• applied tough new tax evasion regulations.

The biggest fear the rest of Europe had and one of the chief reasons they did not want IMF intervention was the threat of protests and riots. Predictably, the general public is quite unhappy with the government plans. There have been warnings of resistance from various sectors of society. Farmers have begun blockading roads to demand greater government subsidies, while on February 10, workers nationwide staged a one-day strike closing airports, government offices, courts and schools. More strikes are expected to follow.

One of the main reasons Greece has not been bailed out, is due to the fact that it has the record for defaulting on loans, bonds and other financial promises. A step in by another Eurozone nation is not only unlikely, but impossible due to the current financial situation going on in other countries. While they may not be as severe as Greece they are definitely not financial sound, by any measure. Member nations are left to fend for themselves during this crisis. This is the shame that Europe is feeling right now and why they are also keeping Washington at arms length. While they are not stepping in to assist a member nation, they do not want to admit they are incapable of doing so to Washington. There are reports that the Eurozone’s dominant economy, Germany, is leading calls for a “firewall” to prevent Greece’s crisis from spreading, but as yet no concrete proposals have been made public.

France seems to be the country that is having the most dialogue with Greece at this time. They have extended a gesture of loan guarantee to bolster confidence in the region, along with Germany, but there will be no bailout, nor a mass lump sum loan.

Spain was also proposing measure to curtail its spending along the same lines as Greece, pay cuts and tax hikes. Tremendous rumbling is coming from its state employee sector however.

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