The Short End of the Long View

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Greek Debt Restructuring..  An interesting twist occurred recently on the debt restructuring. Even though the covenants did not permit this, the ECB was able to make their claims senior to other claim holders, even though they were in the same class. Effectively the ECB retroactively changed an indenture.

If this can be done, what will other authorities do? Will the BOJ change the coupon on its debt? Will Spain unilaterally extend maturities? In the past there was a legal regime that enforced corporate debt covenants but then these are sovereign governments or quasi government authorities.

Buyers beware!!

“How am I doing?” Former Mayor Ed Koch made this line famous in seeking out approval for his mayoral term. How would the facts stack up on the US Economy if President Obama were to ask “How am I doing?” Here are the statistics, courtesy of the TIS Group since the President took office in Jan 2009:

-The % of unemployed for 52 weeks has risen from 15% to 30%..

-There are 1.2mm fewer jobs…

-Worker health costs have increased 22%…

-Gas prices are up 90%…

-Home values are down 13%…

-Americans living in poverty have increased by over 6.0mm…

-Americans dependent on food stamps have risen from 14mm to 46mm..

-The National Debt is up 44%…


Is this the “change” in America we were hoping for???

One Comment

  1. Regarding your blog about Obama’s term in office.

    Yes, unemployment rates are up, yes gas prices grew exponentially, and yes the national debt is up.

    However, one needs to also see the positives he has ‘Change’d,
    line them up side by side and then have him ask, “How am I doing?”

    I respect your point of view, but the way I see it, we still got the long end of the short stick we were handed with the financial crisis, as bad as it has been, it could have been much worse. Unlike Iceland, and recently Greece, we were able to not have to take seriously drastic measures on the way to fixing the economy.

    Just as a company files for class 11 bankruptcy, the US Gov’t is trying to figure out a way to fix the root cause of the problem and re-emerge as a healthy and functional entity.

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