Athens in America: Albany.
Careful readers of Ellisblog know that the State of New York runs out of money in one month. You might imagine that elected officials in Albany would be working around the clock to come up with a plan to deal with this dire fiscal emergency. You would be wrong.
Uncertainty Squared
Anybody who thought the financial crisis had ended in 2009, in other words, had better think again; this summer is likely to see more market explosions and clouds. Gillian Tett's column today is worth reading in full.
Bonus link: Mead on the crisis of faith in what might be called the religion of enlightenment.
Counter-Party Risk.
About 20 months ago, we were all reminded of the perils of "counter-party risk." AIG wasn't good for it. Fannie wasn't good for it. Citi wasn't good for it. Truth be told, none of the major financial institutions were in a position to "make whole" their counter-parties on all of their bets.
Now, let us imagine that you have loaned a bunch of money to Greece, or Portugal, or Spain, or even Austria, or Britain. Will you be repaid? The chart looks grim.
The Ungluing (cont.)
Every day is Greece day at Ellisblog. The stakes could not be higher. And the deterioration on the ground (in Athens and in the markets) could not be more alarming.
Newsweek Sale.
The Washington Post announced yesterday that it intends to sell Newsweek and that it has hired Allen & Company to help market the magazine. The folks at Business Insider offered to pay $1 for it, but reserved the right to lower its bid after due diligence. The likeliest outcome, unless a crazy billionaire can be found, is that the Washington Post will have to pay someone or some company to take Newsweek off it hands. The legacy costs (pensions, health care, etc) are likely under-funded and much larger than one would imagine.
First World Debt Relief Conference.
Paul Kedrosky says out loud what everyone is thinking privately: that a first world debt relief conference may be inevitable.
Bonus link: Martin Wolf on the Greek bailout and the crisis of the Eurozone.
Another Athens of America.
Oakland, California, is broke. The teachers union there is threatening a strike and demanding higher wages. There's no money and they want more of it.
The Lazarus Effect.
This remarkable documentary will air on HBO on May 24th. It previewed last night at MOMA. I'm biased, of course. My wife is the CEO of Product (RED) and a co-executive producer of the film. But it's an amazing story that is told in thirty minutes. And it matters.
Grecian Formula.
My fellow Americans: welcome to the Greece bailout! Some important banks in Germany and France are very grateful for your support. They will now be paid back (with interest) on the idiotic loans they made to a nation of people that regards tax avoidance as a civic duty.
Bonus link: Walter Mead analyzes the post-bailout Eurozone.
Goldman Sachs Self Criticism.
The Fabulous Fab finds himself wanting in several respects. The others not so much. What went wrong at Goldman Sachs is right here.
That Sinking Feeling.
The Board of Directors at Goldman Sachs needs to think long and hard about what happens next. The SEC civil fraud suit is one thing. The US Department of Justice criminal investigation is, potentially, a game ender.
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