Soros On Europe Iceberg Dead Ahead

George Soros has been a busy man the last few days. Appearing at the INET Conference a number of times and penning detailed articles for the FT (and here at Project Syndicate) describing the terrible situation in which Europe finds itself – and furthermore offering a potential solution. Critically, he opines, the European crisis is complex since it is a vicious circle of competing crises: sovereign debt, balance of payments, banking, competitiveness, and structurally defective non-optimal currency union.
The fact is ‘we are very far from equilibrium…of the Maastricht criteria’ with his very clear insight that the massive gap, or cognitive dissonance, between the ‘official authorities’ hope and the outside world who see how abnormal the situation is, is troublesome at best. Analogizing the periphery countries as third-world countries that are heavily indebted in a foreign currency (that they cannot print), his initial conclusion ends with the blunt statement that “the euro has really broken down” and the ensuing discussion of just what this means from both an economic and socially devastating perspective: the destruction of the common market and the European Union and how this will end in acrimonious recriminations with worse conflicts between European states than before.
However, he offers some hope and a potential solution to the fact that these nations have implicitly handed their ‘seignorage rights’ to the ECB, in the potential for a balance between fiscal austerity and deflation (or at minimum new rules that would remove to a greater extent the vicious circle of the fiscal compact as deflationary debt trap). The punchline being the creation of an SPV that ‘owns the ECB’s seignorage rights – estimated to be worth $2-3 trillion’ that could explicitly be used to acquire bonds without violating the Lisbon Treaty. The sad truth of this admittedly smart financial engineering (pretend austerity and optically no money printing when exactly that is occurring) is that the Bundesbank will never agree to it (as implicitly it ends up at the foot of the German taxpayer to a greater or lesser extent) even though, as he concludes, the future of the Euro is a political one and thus “beyond the Bundesbank’s competence to decide.” Just as we noted back in December and reiterated here as likely given TARGET-2 imbalances (also confirmed by Deutsche Bank), Soros points out that the Bundesbank has “started taking measures to limit the losses that it would sustain in case of a
breakup.” and this creates a self-fulfilling prophecy that markets are reflecting.

A must-watch harsh reality check on Europe and a man trying to find answers when the authorities remain blind to the endgame…

From: ping.fm

Yahoo 2000 Layoffs Jobs Cut

Yahoo’s turnaround attempt is going to be messy.

In his first three months on the job, CEO Scott Thompson has imposed the largest layoffs in the company’s 17-year history, reshaped the board of directors, picked a potentially disruptive fight with a major shareholder and sued Facebook for patent infringement.

He says there’s even more upheaval to come.

Thompson delivered a painful jolt Wednesday with a payroll purge of about 2,000 workers, or about 14 percent of Yahoo’s 14,100 employees. The cuts will save about $375 million annually as Yahoo tries to boost its earnings and long-slumping stock price.

More shakeups loom as Thompson reshuffles divisions and considers selling an online ad-placement service and other operations that don’t fit into his strategy.

Those potential changes will follow a tumultuous time for Thompson, an affable and well-respected executive who held the top job at eBay Inc.’s thriving PayPal service before being lured away to help salvage Yahoo.

Thompson “definitely seems to be taking a very broad and bold view of what needs to be done at Yahoo,” said Standard & Poor’s Capital IQ analyst Scott Kessler. “He seems to know it isn’t going to be easy and it isn’t going to be pleasant.”

From: http://ping.fm/CnTdv

Gravity Is a Bitch

Gravity is a real bitch

Bonds, stocks (particularly banks and leveraged companies), commercial real estate, residential real estate, auto prices, factories, etc., will be obliterated.

All of this is priced off of the “risk free rate” – the Fed manipulated Treasury rate – and all of these assets will collapse in price once the dollar is finally rejected as the world’s currency, rates start to rise and the global monetary system enters the Great Reset, aka the Death of the 30 year bond bubble.

How far could these assets fall? No one knows but think about this, in 2008 stocks fell over 50% from current levels while the existing corrupt system survived. Where would it have fallen without the Fed pumping trillions into the banks that they could then pump right back into the market?

Real estate has fallen over 30% nationally with the government continuing to print, buy and lend to anyone with a pulse to prop the market up. Where would housing price in the absence of taxpayer funded FNMA/GNMA/FHLMC easy credit, mortgage tax deductions and new home buyer credits? I’m not sure but I certainly think we are going to find out in the near future.

From: ping.fm

Home Depot Layoffs 400 People in Baton Rouge

The Home Depot will lay off 225 workers in its customer support and distribution operations in Baton Rouge over the next 18 months.

Company spokesman Stephen Holmes told The Advocate (http://bit.ly/GZyFSK) that the layoffs will hit 90 workers at Home Depot’s distribution facility for online purchases. Another 135 will face layoffs in sales, purchasing and finance positions for Home Depot subsidiary Your Other Warehouse.

Holmes said the decision to cut the positions was made on geographic and logistical concerns. Atlanta-based Home Depot has most of its support functions in its home city.

“It just makes sense to have those centralized here with similar functions,” Holmes said.

Last October, Home Depot announced the layoffs of 400 people at its Baton Rouge call center. Holmes said those layoffs will be completed this summer following the opening of new centers in Atlanta and Ogden, Utah.

The company said employees will have the opportunity to pursue other positions with the company, and those who do not relocate or find another position in the company will be provided severance packages and outplacement assistance.

The 135 positions with Your Other Warehouse, which distributes bath and kitchen accessories, faucets and fixtures, will be consolidated in Atlanta. The 90 positions from the distribution facility also will probably end up in Georgia, he said.

From: http://ping.fm/g1khn

Villaraigosa L.A. Must Layoff Thousands of People

Los Angeles Mayor Antonio Villaraigosa said Thursday that he will call for layoffs of city employees as part of the budget he proposes next month.

“We’re going to lay off a large number of employees. I’m not going to say how many,” he told an audience at the City Administrative Officer Investors Conference, at the Grammy Museum in downtown’s L.A. Live complex.

The announcement comes weeks after the city’s five-member employee bargaining committee, which includes Villaraiogsa, asked city unions to give up raises that are scheduled for the fiscal year that begins July 1. Those unions refused to reopen contract talks.

Since the recession began, more than 300 city workers have been laid off and thousands more have retired or been transferred to agencies not affected by the budget crisis, such as the Department of Water and Power. The city now faces a $220-million budget shortfall.

Villaraigosa said his budget, which comes out April 20, will also include plans for a long-term lease of city parking garages — a proposal rejected by the City Council in the past. He also promised to seek pension reforms by pushing for a higher retirement age for city workers.

“I’ve said to our employees,” the mayor continued, “either we get it through the City Council … or I’m going to put an initiative on the ballot the way they’ve done in San Jose, the way they’ve already done in San Diego and the way they’re gonna do in cities around the country.”

From: http://ping.fm/yedAC

US Economic Hotels George4Title Reports

“Thanks Ben Bernanke, now, even a run down old motel room costs $29 plus tax. I wouldn’t even be able to call a cellphone or an 800 number according to the lady. How can I report something to the government from the room? They advertise WIFI, but there’s none really. The motel is owned by foreigners and Americans work for them at minimum wage. Don’t stay at this place unless you absolutely have to (located in Kingman AZ). It would be more pleasant to sleep out on the ground on BLM land. Housing sucks, apartments suck, motels suck, mcdonalds suck, everything is beginning to suck in America.” –George4Title
 

California Considers non-seniority-based Teacher Layoffs

State legislative analyst’s report also says school districts issue more pink slips than needed because of deadline issues and recommends changing the layoff notice deadline.

California school districts issue more pink slips than necessary and the state should consider alternatives to seniority-based layoffs, according to a report from the state legislative analyst’s office.

In the report, released last week, the nonpartisan analyst said that because state and local budget information is available only after the initial deadline for districts to send out layoff notices, more pink slips are issued than may be needed.

The initial notices are required by state law to be sent out by March 15.

This month, the Los Angeles Unified School District sent about 11,700 layoff notices to teachers and other staff.

From: http://ping.fm/P7QOu

California Farmers Face Water Reduction

Sharp cutbacks in water for farmers threaten to trigger renewed layoffs in a large swath of California, eating into the state’s $40 billion-a-year agriculture industry and damping its nascent economic recovery.

Amid an unusually dry winter, managers of the federal Central Valley Project, which delivers mountain water for agriculture, late last month announced an initial reduction in farmers’ water allowance for this year to 30% of the allotment in the driest southern reaches of the valley, down from 85% last year. Now farmers and local agriculture officials are taking in the economic impact they face.

Officials of the 614,000-acre Westlands Water District, near Fresno, say farmers there are expected to leave tens of thousands of acres fallow, only a year after California experienced one of its wettest winters on record.

“Being a farmer in California is worse than going to Las Vegas,” said Mark Borba, as he inspected a barren field he may leave without crops this year because of the water reductions. Mr. Borba, co-owner of Borba Farms, which gets water from the district, expects to reduce his cotton crop by 38% to 1,480 acres from 2,400 last year.

The Central Valley, which is 450 miles long and about 50 miles wide, is home to most of California’s agriculture industry. With much of the valley semi-arid, farms there for decades have depended on irrigated water from the Northern California mountains, but those supplies have long been subject to sharp fluctuations. Environmental regulations have made the water supplies from year to year even more unpredictable.

The mountain snowpack stood at 45% of normal as of last Wednesday, compared with 139% a year ago, according to official estimates. Reservoirs remain full enough from 2011 precipitation so that restrictions aren’t expected to spread to the household water tap yet, officials said.

From: ping.fm

Procter Gamble 5700 Job Cuts

Procter & Gamble Co. plans to eliminate 5,700 nonmanufacturing positions companywide by late 2013 and the company says attrition won’t account for all of the cuts, Dayton Daily News reported.

That means an unspecified number of layoffs are coming, but P&G (NYSE: PG) officials have not said when those cuts would occur. The company hasn’t given the 60-day notice to the Ohio Department of Job and Family Services, which is required for any such job cuts.

Of P&G’s 57,000 nonmanufacturing positions, about 2,000 are in Mason, 350 in West Chester Township, 50 in Lewisburg in Preble County and more than 9,000 at its Cincinnati headquarters and three other campuses in Hamilton County.

From: http://ping.fm/GKa0C

US Pending Homes Sales Fall

Pending home sales edged lower in February, according to a report Monday from the National Association of Realtors, raising questions about the housing market recovery.

The pending home sales index slipped by 0.5 percent to 96.5 in February from 97.0 the previous month, but it was up 9.2 percent from the year-earlier period.

Economists polled by Reuters had expected signed contracts, which lead existing home sales by a month or two, to advance 1 percent, after a previously reported 2.0 percent rise.

“The spring homebuying season looks bright because of an elevated level of contract offers so far this year,” said Lawrence Yun, NAR chief economist, said we’re seeing the continuation of an uneven but higher sales pattern. “If activity is sustained near present levels, existing-home sales will see their best performance in five years.”

From: ping.fm/2DoxT