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	<title>Observer &#187; Pasok</title>
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		<title>Observer &#187; Pasok</title>
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		<title>Surprise! Greece&#8217;s Ruling Poilitical Parties Have a Combined $300 Million Debt</title>

		<comments>http://observer.com/2012/09/surprise-greeces-ruling-poilitical-parties-are-a-combined-300-million-debt/#comments</comments>
		<pubDate>Thu, 27 Sep 2012 16:42:52 -0400</pubDate>
					<link>http://observer.com/2012/09/surprise-greeces-ruling-poilitical-parties-are-a-combined-300-million-debt/</link>
			<dc:creator>Patrick Clark</dc:creator>
				
		<guid isPermaLink="false">http://observer.com/?p=266290</guid>
		<description><![CDATA[<p><a href="http://observer.com/2012/09/surprise-greeces-ruling-poilitical-parties-are-a-combined-300-million-debt/greece-protests/" rel="attachment wp-att-266294"><img class="alignleft  wp-image-266294" title="greece protests" src="http://nyoobserver.files.wordpress.com/2012/09/greece-protests.png" alt="" width="159" height="210" /></a>Here's a terrifying set of facts about Greece we didn't know but don't find too surprising: Government funding for political parties is tied to the percentage of votes they win; it's not unusual for political parties to borrow against future funding; and as Reuters explains, the two groups that form the current governing coalition <a href="http://www.reuters.com/article/2012/09/27/us-greece-politics-parties-idUSBRE88Q0EA20120927">are in debt to the tune of $300 million</a>:<!--more--></p>
<p><em>The loan pressures will intensify early next year when state funding is recalculated to reflect declines in the parties' support. At present, funding is still based on the proportion of votes each party won in the June 2009 election. But in January funding will change to reflect votes cast in June 2012.</em></p>
<p><em>At that election Pasok saw its share of the vote plunge from 43 percent to 12 percent, while New Democracy's share fell from 33 percent to 29 percent. The big winner was leftist Syriza, which opposed the bailout terms. Its share of the vote shot up to 27 percent from 4.6 percent in 2009, and it now stands to receive significantly more funding.</em></p>
<p>Which is funny in a black humor kind of way, because the two parties—conservative New Democracy and socialist Pasok—just reached a deal on <a href="http://online.wsj.com/article/SB10000872396390443916104578021882943321370.html?mod=WSJ_hp_LEFTWhatsNewsCollection">$17 billion worth</a> of spending cuts and revenue (tax) measures in hope of a) satisfying European rescuers and b) pissing Greek citizens off? So maybe not in hopes of, but nonetheless: We're not talking about demonstrators armed with sandwich boards and singalongs, but uh, <a href="http://www.reuters.com/news/pictures/slideshow?articleId=USRTR38FQ8#a=16">gas masks and Molotov cocktails</a>.</p>
<p>So: Support for the coalition parties has plummeted,  and they're set to receive less state money when funding formulas are recalculated to include June elections, making the parties a) poorer and b) debtors with their own special interests, even as they engage in restructuring the nation's debts.</p>
]]></description>
		<content:encoded><![CDATA[<p><a href="http://observer.com/2012/09/surprise-greeces-ruling-poilitical-parties-are-a-combined-300-million-debt/greece-protests/" rel="attachment wp-att-266294"><img class="alignleft  wp-image-266294" title="greece protests" src="http://nyoobserver.files.wordpress.com/2012/09/greece-protests.png" alt="" width="159" height="210" /></a>Here's a terrifying set of facts about Greece we didn't know but don't find too surprising: Government funding for political parties is tied to the percentage of votes they win; it's not unusual for political parties to borrow against future funding; and as Reuters explains, the two groups that form the current governing coalition <a href="http://www.reuters.com/article/2012/09/27/us-greece-politics-parties-idUSBRE88Q0EA20120927">are in debt to the tune of $300 million</a>:<!--more--></p>
<p><em>The loan pressures will intensify early next year when state funding is recalculated to reflect declines in the parties' support. At present, funding is still based on the proportion of votes each party won in the June 2009 election. But in January funding will change to reflect votes cast in June 2012.</em></p>
<p><em>At that election Pasok saw its share of the vote plunge from 43 percent to 12 percent, while New Democracy's share fell from 33 percent to 29 percent. The big winner was leftist Syriza, which opposed the bailout terms. Its share of the vote shot up to 27 percent from 4.6 percent in 2009, and it now stands to receive significantly more funding.</em></p>
<p>Which is funny in a black humor kind of way, because the two parties—conservative New Democracy and socialist Pasok—just reached a deal on <a href="http://online.wsj.com/article/SB10000872396390443916104578021882943321370.html?mod=WSJ_hp_LEFTWhatsNewsCollection">$17 billion worth</a> of spending cuts and revenue (tax) measures in hope of a) satisfying European rescuers and b) pissing Greek citizens off? So maybe not in hopes of, but nonetheless: We're not talking about demonstrators armed with sandwich boards and singalongs, but uh, <a href="http://www.reuters.com/news/pictures/slideshow?articleId=USRTR38FQ8#a=16">gas masks and Molotov cocktails</a>.</p>
<p>So: Support for the coalition parties has plummeted,  and they're set to receive less state money when funding formulas are recalculated to include June elections, making the parties a) poorer and b) debtors with their own special interests, even as they engage in restructuring the nation's debts.</p>
]]></content:encoded>
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		<title>Greek Parties Still Negotiating Coalition, Wall Street Still Girding for European Crisis: Roundup</title>

		<comments>http://observer.com/2012/06/greek-parties-still-negotiating-coalition-wall-street-still-girding-for-european-crisis-roundup/#comments</comments>
		<pubDate>Tue, 19 Jun 2012 07:44:46 -0400</pubDate>
					<link>http://observer.com/2012/06/greek-parties-still-negotiating-coalition-wall-street-still-girding-for-european-crisis-roundup/</link>
			<dc:creator>Patrick Clark</dc:creator>
				
		<guid isPermaLink="false">http://observer.com/?p=246876</guid>
		<description><![CDATA[<p><strong>Whither Europe: </strong>Greece's leading pro-bailout party—conservative New Democracy, which won Sunday's elections, and socialist Pasok—are still <a href="http://online.wsj.com/article/SB10001424052702303836404577475961960292948.html?mod=googlenews_wsj">negotiating</a> to form a coalition to govern the teetering nation. Assuming a deal gets done, the first task will be to convince Europe to rewrite the Greek rescue agreement to provide <a href="http://online.wsj.com/article/SB10001424052702303379204577474652466408254.html?mod=googlenews_wsj">more time</a>—and financing—to meet austerity goals.</p>
<p>European leaders promised a more <a href="http://www.reuters.com/article/2012/06/19/us-g-idUSBRE85H09220120619">integrated banking system</a> at the G-20 meeting in Mexico City yesterday, listing common banking oversight and depositor guarantees among future steps to be considered.<strong><br />
</strong></p>
<p>Asset managers like Legg Mason are preparing for <a href="http://www.bloomberg.com/news/2012-06-19/greece-out-in-legg-mason-stress-test-drawing-lesson-from-lehman.html">worst case news</a> out of Europe.</p>
<p>Greek savers aren't the only ones stuffing banknotes under their mattresses; Reuters reports that institutional investors are <a href="http://www.reuters.com/article/2012/06/19/us-investing-cash-eurozone-idUSBRE85I05N20120619">increasingly holding cash</a>.</p>
<p>("If you wrapped up all the <a href="http://dealbreaker.com/2012/05/warren-buffett-and-david-einhorn-are-in-agreement-re-the-frigidity-of-their-disfavored-investment-ideas/">$100 bills in circulation</a>, it would form a cube about 74 feet per side...")</p>
<p>Spain paid <a href="http://online.wsj.com/article/SB10001424052702303836404577475771247421542.html?mod=WSJ_hp_LEFTWhatsNewsCollection">2 percentage points more</a> to borrow on 12-month bonds yesterday than it did one month ago.</p>
<p><strong></strong>If all that paints too rosy a picture, <a href="http://dealbook.nytimes.com/2012/06/18/one-wall-street-seer-says-the-greek-tragedy-is-near/">talk to Mark J. Grant</a>.</p>
<p>For a little optimist, CNBC brings you <a href="http://www.cnbc.com/id/47870358">Mark Mobius</a>.</p>
<p>Jon Stewart <a href="http://www.ritholtz.com/blog/2012/06/drachma-feta-accompli/">interviews the drachma</a>.</p>
<p><strong>Your tab... </strong>Goldman Sachs advanced Rajat Gupta nearly $30 million to cover legal expenses, according to <em>The New York Times</em><em>, </em><a href="http://dealbook.nytimes.com/2012/06/18/gupta-legal-bills/">salt in the wounds</a> after a) the former McKinsey &amp; Co. chief executive and Goldman director passed Goldman secrets to hedge fund manager Raj Rajaratnam, according to the jury and b) Mr. Gupta's defense team took an adversarial approach to the parade of Goldman execs appearing at the witness stand (one attorney for Mr. Gupta called Goldman CEO Lloyd Blankfein "cold and callous," according to The Times). Anyway, Goldman has been picking up the tab because firm bylaws require the bank to pay the legal fees of executives and board directors; Mr. Gupta signed a pretrial agreement stipulating that he would pay his own legal bills if convicted.</p>
<p>Hide the whale: Bruno Iksil, the JPMorgan trader known as the London Whale, sometimes resisted <a href="http://online.wsj.com/article/SB10001424052702303379204577474842039937860.html">sharing the details</a> of his trading positions with superiors,The Wall Street Journalreports: "Mr. Iksil once confided to the colleague that when he wanted to avoid questions from supervisors about his trades, he sometimes would start discussing a mathematical term, equation or other technical jargon, to confuse and end the conversation."</p>
<p>Jamie Dimon is scheduled to testify before the "<a href="http://www.bloomberg.com/news/2012-06-18/dimon-faces-harsher-and-crazier-house-crowd-in-second-round.html">harsher and crazier</a>" House of Representatives today.</p>
<p><strong>BofA to divest? </strong>Swiss private bank Julius Baer is in talks to <a href="http://www.reuters.com/article/2012/06/19/us-julius-baer-idUSBRE85I08520120619">acquire</a> Bank of America's non-U.S. wealth management unit, which manages about $90 billion, and which Reuters says could be worth about $2 billion.</p>
<p><strong>Short-term fix: </strong>Nine months and $15 million later, Michael Francis is <a href="http://online.wsj.com/article/SB10001424052702303836404577474931017078226.html?mod=googlenews_wsj">out as president</a> of J.C. Penney.</p>
]]></description>
		<content:encoded><![CDATA[<p><strong>Whither Europe: </strong>Greece's leading pro-bailout party—conservative New Democracy, which won Sunday's elections, and socialist Pasok—are still <a href="http://online.wsj.com/article/SB10001424052702303836404577475961960292948.html?mod=googlenews_wsj">negotiating</a> to form a coalition to govern the teetering nation. Assuming a deal gets done, the first task will be to convince Europe to rewrite the Greek rescue agreement to provide <a href="http://online.wsj.com/article/SB10001424052702303379204577474652466408254.html?mod=googlenews_wsj">more time</a>—and financing—to meet austerity goals.</p>
<p>European leaders promised a more <a href="http://www.reuters.com/article/2012/06/19/us-g-idUSBRE85H09220120619">integrated banking system</a> at the G-20 meeting in Mexico City yesterday, listing common banking oversight and depositor guarantees among future steps to be considered.<strong><br />
</strong></p>
<p>Asset managers like Legg Mason are preparing for <a href="http://www.bloomberg.com/news/2012-06-19/greece-out-in-legg-mason-stress-test-drawing-lesson-from-lehman.html">worst case news</a> out of Europe.</p>
<p>Greek savers aren't the only ones stuffing banknotes under their mattresses; Reuters reports that institutional investors are <a href="http://www.reuters.com/article/2012/06/19/us-investing-cash-eurozone-idUSBRE85I05N20120619">increasingly holding cash</a>.</p>
<p>("If you wrapped up all the <a href="http://dealbreaker.com/2012/05/warren-buffett-and-david-einhorn-are-in-agreement-re-the-frigidity-of-their-disfavored-investment-ideas/">$100 bills in circulation</a>, it would form a cube about 74 feet per side...")</p>
<p>Spain paid <a href="http://online.wsj.com/article/SB10001424052702303836404577475771247421542.html?mod=WSJ_hp_LEFTWhatsNewsCollection">2 percentage points more</a> to borrow on 12-month bonds yesterday than it did one month ago.</p>
<p><strong></strong>If all that paints too rosy a picture, <a href="http://dealbook.nytimes.com/2012/06/18/one-wall-street-seer-says-the-greek-tragedy-is-near/">talk to Mark J. Grant</a>.</p>
<p>For a little optimist, CNBC brings you <a href="http://www.cnbc.com/id/47870358">Mark Mobius</a>.</p>
<p>Jon Stewart <a href="http://www.ritholtz.com/blog/2012/06/drachma-feta-accompli/">interviews the drachma</a>.</p>
<p><strong>Your tab... </strong>Goldman Sachs advanced Rajat Gupta nearly $30 million to cover legal expenses, according to <em>The New York Times</em><em>, </em><a href="http://dealbook.nytimes.com/2012/06/18/gupta-legal-bills/">salt in the wounds</a> after a) the former McKinsey &amp; Co. chief executive and Goldman director passed Goldman secrets to hedge fund manager Raj Rajaratnam, according to the jury and b) Mr. Gupta's defense team took an adversarial approach to the parade of Goldman execs appearing at the witness stand (one attorney for Mr. Gupta called Goldman CEO Lloyd Blankfein "cold and callous," according to The Times). Anyway, Goldman has been picking up the tab because firm bylaws require the bank to pay the legal fees of executives and board directors; Mr. Gupta signed a pretrial agreement stipulating that he would pay his own legal bills if convicted.</p>
<p>Hide the whale: Bruno Iksil, the JPMorgan trader known as the London Whale, sometimes resisted <a href="http://online.wsj.com/article/SB10001424052702303379204577474842039937860.html">sharing the details</a> of his trading positions with superiors,The Wall Street Journalreports: "Mr. Iksil once confided to the colleague that when he wanted to avoid questions from supervisors about his trades, he sometimes would start discussing a mathematical term, equation or other technical jargon, to confuse and end the conversation."</p>
<p>Jamie Dimon is scheduled to testify before the "<a href="http://www.bloomberg.com/news/2012-06-18/dimon-faces-harsher-and-crazier-house-crowd-in-second-round.html">harsher and crazier</a>" House of Representatives today.</p>
<p><strong>BofA to divest? </strong>Swiss private bank Julius Baer is in talks to <a href="http://www.reuters.com/article/2012/06/19/us-julius-baer-idUSBRE85I08520120619">acquire</a> Bank of America's non-U.S. wealth management unit, which manages about $90 billion, and which Reuters says could be worth about $2 billion.</p>
<p><strong>Short-term fix: </strong>Nine months and $15 million later, Michael Francis is <a href="http://online.wsj.com/article/SB10001424052702303836404577474931017078226.html?mod=googlenews_wsj">out as president</a> of J.C. Penney.</p>
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