WANTED: Transformational Leaders:

Detroit in Bankruptcy After Years of Neglect and Lack of Leadership

Back in the last quarter of 2010, as the big three Auto manufacturers lobbied for bail outs, and later filed for bankruptcy, Detroit's fate was all but sealed. Well, the fat lady is singing, and this is a political and public relations mess. There are hints of mismanagement or misappropriation of funds and a fair share of finger pointing - but at the core of the municipality's fiscal crisis are the Pension funds. How will the courts handle retiree payouts: will they remain at par or will they be reduced? The residents of Detroit are in for an interesting turn of events. This is a serious wake up call, to say the least.
How did this filing come about? Well, from what I can tell, Snyder seemed to have been trying to quietly handle the crisis. Seeing the writing on the wall, Governor Snyder wanted to avoid a possible downgrade of Michigan’s credit rating, which is likely following a messy "unmanaged" bankruptcy. The crisis management strategy was to get ahead of the problem, so that the worst case scenario is a "Structured" bankruptcy - thereby minimizing the negative impact on the State's overall credit rating. The Wall St. Journal reported that Snyder brought in Kevyn Orr as an Emergency Money Manager to work aggressively to get Detroit’s fiscal house in order. Snyder's secret weapon, Orr, was apparently granted “dictatorship” style authority, essentially rendering the city’s finance department and controller powerless. Kevyn Orr was the lead attorney handling the Chrysler structured bankruptcy, so it could be construed as a sound decision. However, from another perspective, one might say that hiring a bankruptcy attorney is like appointing a wolf to watch over a hen house.
How serious is it when a city files for Bankruptcy? .

California has probably seen the most cases of bankruptcy than any other state - with city after city filing for bankruptcy protection as a result of the housing crisis and pour money management. The jury is still out as to whether California's troubled counties will recover gracefully. Whatever the case, the road back to solvency is a long and arduous one. As for Detroit, it was clearly heading in the wrong direction prior to the start of Great Recession. In fact, long before the Recession rocked the nation, and later Europe, Detroit was already showing obvious signs of fiscal discord. Their key source of jobs and tax revenue stemmed from the auto industry and ancillary products and services. Although many local businesses and retailers benefited from the economic "trickled down".
In all fairness, we can't place Detroit's troubles entirely on the shoulders of the auto industry. There are multiple factors playing into the city's demise. For example: tax revenues over the past 25 years have been on a steady decline as the population and businesses fled to greener pastures. The City of Detroit, at its peak (1950s), had a population of 1.8 million, but the most recent Census Bureau records illustrate a more than 65% decline. The disturbing reality is that Detroit presently has a population of merely 700 thousand - particularly considering the demographics and socio-economic landscape. Adding insult to injury, over the past 5 to 6 decades the population exodus happen to be primarily the middle class, leaving the city with a disproportionate number of low-income residents. What this boils down to is a dwindling tax revenue base, and increased spending for public assistance, healthcare and other subsidy programs. The economic cycle can only spirals downward from there, unless a drastic changes are made.
The “Economics-101” explanation would be as follows: When you have a predominately low-income or impoverished population, this translates to a largely unskilled and uneducated labor force – which means local-area businesses can’t fill higher paying jobs that require specialized skills or education. This distressed socio –economic environment drives business out. In turn, joblessness decreases consumer spending, which ultimately cause retailers to close down.
High unemployment was not Detroit’s biggest problem. Job creation doesn't help in this scenario unless there’s a strategy implemented to attract businesses and manufacturers with jobs that match the skills of the population. Sheer job creation (in a vacuum)is nothing unless there is also a comprehensive plan to educate or provide training to upgrade the skills of the local workforce.

Years of neglect and misguided development spending has come to a head. There's been ample time (we are talking decades) for anyone from the parade of politicians to step up and show real leadership. It’s hard to believe that none of the government agencies or organizations could have developed a long-term urban renewal strategy to transform Detroit into a thriving economic force. As far back as I can remember, Detroit was known for its high crime, and unemployment, but the combined burden of high unemployment, crime, foreclosures and abandon properties - against the backdrop of diminishing revenues, and $18 billion in debt obligations – you’re looking at a time bomb.
Political fallout is eminent, and everyone will be watching to see if Obama will extend an “bail out” to Detroit, since he was vehemently supportive of the big-3 auto makers in their time of need. With any luck, the people, politicians, unions, educators and activists will be open minded enough to work together and find a common ground for rebuilding Detroit. This may turn out to be for the best in the long run

K. Reilly
The Cohn-Reilly Report
Facebook.com/cohn.reilly

Redbox Fully loaded: Can Netflix Stay 1-Step Ahead ?

Redbox unearthed the details of a joint venture with Verizon Communication, which delivers the required infrastructure for streaming video service at (you guessed it) $8 per month, under the brand name, “Redbox Instant”. Although, this exciting new business division does not include movie downloads as yet. The anticipated venture comes on the heels of their announcement in March that it purchased NCR’s entertainment division for $100 million, hammering the nail in the Blockbuster Express coffin. Kudos to Redbox for its successful execution of its expansion plan, that brings them to a head-to-head competition with the Market Leader, Netflix.
You may recall the of Summer of 2011, when Netflix's CEO (Reed Hastings) made the grave mistake of announcing their brilliant plan to separate the DVD Rental and Streaming Video business into two revenue streams. Charging $8.00 per month for each – essentially doubling the cost for customers who were enjoying access to both for only $8. The ill-fated plan was announced one moment and denounced the next, as customers made their feelings of disgust known. A mass exodus of 800,000 customers within a matter of weeks was an undeniable message to the business community that the Customer is Boss. By October, in response to the backlash, Hastings apologized to customers. He announced that the company decided not to separate the services for now, adding that they were moving too fast.

Netflix reported a loss of 800,000 subscribers in the 3rd quarter of 2011. Since Analysts predicted a loss of only 600,000, the market reacted unfavorably with a swiftly decline of over 20%. The company warned of more defections and stated that they anticipate losses for the first quarter of 2012 as a result of expanding their business to Europe. Netflix did not anticipate the fast and furious decline in market valuation, eroding their stock price from its highs The $305 per share in July 2011 to below $53 by September. By the year's end, Netflix has lost a million subscribers in the aftermath.

This costly business strategy turned out to be a public relations nightmare for Netflix, but an absolute dream for Redbox, waiting in the wings.

Using the Netflix business model, Redbox came onto the scene quietly, but well prepared to gradually scoop up stray Netflix customers. Then the Netflix blunder created a glorious opportunity or “gift” for any company poised to take advantage of it……. that company was Redbox. The gift translated into instant market share and name recognition, as news coverage of Netflix’s new strategy made reference to Redbox in just about every report.Jusk think; a sizable number of displaced Netflix customers were now searching the net for a comparable alternative to the DVD and streaming video service. Redbox scrapped-up stray, and disgruntled customers for the first 90 days following Nextflix’s announcement. It’s quite possible that Redbox pulled in the entire 4% market share Netflix lost.
As a business major in grad school, students learn a great deal about the world of business through reading piles of case studies and statistics about corporations that were successful versus those that folded. We learn that the fate and longevity of a product or service has a lot to do with originality or satisfying an underserved demand. In such a scenario, the first to enter the market with a new product idea or service is referred to as “Market Maker”, or “Market Leader”. The Market Leader holds an enormous advantage over those that follow in their footsteps. Research has shown that market leaders are likely to maintain the lion's share of the market for decades – unless the product or service becomes obsolete, such is the case (for example) with beepers. In keeping with this statistic, Netflix did eventually recover having lost 85% of their valuation, and approximately 4% of their business.
Nevertheless, the Netflix blunder, nearly two years ago, served to kick-start the new-comer, Redbox. As unhappy consumers fled Netflix, the gift of market share was well received and now Redbox is ready for a new challenge – Streaming videos.

By December of 2012, Redbox had increased its market share to 45%¸ up from 34% the previous year. Redbox’s founder Gregg Kaplan, leaves his post as President and COO, passing the role of President over to Anne Saunders, and Shawn Strickland as CEO of Redbox Instant - who will hopefully continue with equally successful leadership.
Well Netflix, “It is On”! You don’t have to be a market expert to conclude that this will be a battle for market share we haven’t seen since the early days of Coke and Pepsi. I look forward to the continued growth of Redbox, and hope the competition will inspire higher standards and consistently low prices. Redbox Instant, will be offered on the Roku box, and made available on Sony Playstation-4 consoles. Good luck Redbox, and may the force be with you!

K. Reilly
The Cohn-Reilly Report
www.facebook.com/cohn.reilly

Employment Not As Rosy As You May Think

Although the unemployment rate has been below 8% since October, there seems to be a disconnect between what the government and media are telling us about how good things are with jobs and what is real.

There are job openings at a level not seen in years. However, the time it takes to fill a job has increased to 23 business days compared to 15 in mid-2009. Although the economy is improving, the reality is companies are reluctant to hire, holding up the process by making candidates interview over weeks or months, before a decision is made, if one is made at all.

“There’s a fear that the economy is going to go down again, so the message you get from C.F.O.’s is to be careful about hiring someone,” said John Sullivan, a management professor at San Francisco State University who runs a human resources consulting business. “There’s this great fear of making a mistake, of wasting money in a tight economy.” The result is an unreported hiring freeze that seems to be in place, especially for higher skilled workers.

“If you have an opening and are not sure about the economy, it’s pretty cheap to wait for a month or two,” said Nicholas Bloom, an economics professor at Stanford University. But in the aggregate, those little delays are stretching out the recovery process. “It’s like one of those horror movies, an economic Friday the 13th, where this recession never seems to die.”

Although job creation has improved over the last two years, it has little impact on the backlog of unemployed workers. Uncertainty, regarding the effect of fiscal policies in Washington adds to employer indecisiveness. In addition, employers want to make sure that workers who have been out of a job for months or years are up to date with current skills, said Robert Shimer, an economics professor at the University of Chicago, before they agree to on board a candidate.

Employers are under no pressure to hire – one reason as indicated in government labor reports, is high productivity. What this means is employees are working double and triple duty because employers are reluctant to hire additional staff. If they do, to lower labor costs, some companies have imported talent from abroad, especially in the technical fields, at much lower rates than their counterparts in the USA would normally command. In addition, outsourcing continues overseas, further reducing opportunities.

Until the psychological barriers are lifted regarding the fate of the economy and changes are made to reward companies who hire American workers, frustration may continue for quite some time, for domestically unemployed workers.

Back to Home Page

C. Cohn
The Cohn-Reilly Report
www.Facebook.com/Cohn.Reilly
________________________ RECOMENDATIONS

Also Check out: Socially responsible Investing site below:
SocialResponsibleInvest.com

A MARKET ON FIRE

Market hits record levels, finally settling above 2007 levels. Happy Days are here again! The better than expected Unemployment report for February boosted trading to yield a triple digit bump on the DOW index. With 236,000 jobs created in last month, the unemployment rate slips to 7.7%, making it the lowest rate since December 2008. February’s impressive turnout nearly doubled January’s total - making it the second best payroll growth in 12 months. Last month’s triumph may be second to November’s payroll growth - but it’s clearly a more significant milestone, given the political gridlock and sequestration anxiety.

There is no denying, the market is on fire. This begs the question: ”Does this mean we’re officially out of the woods with respect to our struggling economy?” Remarkably, of the trillions of dollars in investment capital that was either lost in declines or fled the market four years ago, it appears to have made its way back into the stock market. As for today, we have sufficiently surpassed the highs of 2007, but we’re looking at levels that bely the overall economic picture - particularly from the standpoint of government debt and anticipated spending cuts.

Market for 2013 is already yielding 10% growth, just in the first two months. We have seen 10% market growth for an entire year.

Is this a repeat of “irrational exuberance”? (a now famous phrase coined by former Federal Reserve Chairman Alan Greenspan). Perhaps you recall - not long after Greenspan warned that the over priced tech stocks was caused by irrational exuberance, the Dot Com bubble burst. This historic occurrence resulted in massive losses that sent investors running for cover. Billions of dollars in losses, rendered many of Silicon Valley’s young millionaires nearly broke. The state of the country’s economy was significantly more stable at that time, thus the Dot Com bust was not nearly as devastating as it could have been. Since the US economy (as it stands today) is still in a rather delicate state, regardless of the zealous market – it wouldn’t easily recover without collateral damage, and a possible slip back into a recession.

The economic indicators are mixed, but there ARE clear signs of stabilization. For example, Manufacturing industry is showing signs of growth, the Housing market is rebounding, and employers are finally feeling confident enough to hire. Nevertheless, the Stock Market is out pacing all indicators, and seemingly ignorant to political issues that threaten fiscal mayhem. Warren Buffet was quoted last week as saying “Markets are Stronger than Government”, and this has proven to be true. Hopefully, we’ve learned from our mistakes, and current market prices are based upon substantiated valuations. My optimism is tempered by reflection.

Back to Home Page

K Reilly
The Cohn-Reilly Report
www.Facebook.com/Cohn.Reilly

________________________ RECOMENDATIONS

Also Check out: Socially responsible Investing site below:
SocialResponsibleInvest.com

Check out the new Music & ArtForum on BlogSpot! "Its a refreshing departure from economics. it's like life's little desert snack." doARTorDIE

-COMMENT HIGHLIGHTS-

________________Comment
Anonymous said......
(1) Great blog right here! Also your web site loads up very fast! What web host are you the usage of? Can I am getting your affiliate link for your host? I wish my web site loaded up as quickly as yours lol my site; aaa fx - March 18, 2013
________________Comment
Anonymous said......
(2) Very nice post. I just stumbled upon your blog and wanted to say that I've truly enjoyed browsing your blog posts. After all I will be subscribing to your feed and I hope you write again soon! Have a look at my homepage: voglio fare i soldi - March 18, 2013
________________Comment
Anonymous said......
(3) Wow, superb blog layout! How long have you been blogging for? you make blogging look easy. The overall look of your website is wonderful, let alone the content! Here is my web-site: cedar finance is it real - March 17, 2013
________________Comment
Anonymous said......
(4) Great submit, very informative. I wonder why the other specialists of this sector don't notice this. You must proceed your writing. I am sure, you have a great readers' base already! my weblog ... binary options canada - March 14, 2013
________________Comment
Anonymous said......
(5) It's a shame you don't have a donate button! I'd certainly donate to this superb blog! I guess for now i'll settle for bookmarking and adding your RSS feed to my Google account. I look forward to new updates and will talk about this website with my Facebook group. Talk soon! My homepage legal ecstasy - March 17, 2013
________________Comment
Anonymous said......
(6) You are actually a excellent webmaster. The web site loading velocity is amazing. It seems that you are doing any distinctive trick. In addition, The contents are masterwork. you've performed a wonderful process in this matter! my web-site :: day trading strategies - March 17, 2013
________________Comment
Anonymous said......
(7) Hi, I do think this is an excellent blog. I stumbledupon it ;) I'm going to return once again since I book-marked it. Money and freedom is the best way to change, may you be rich and continue to help others. Here is my page - binary options uk - March 16, 2013
________________Comment
Anonymous said......
(8) Oh my goodness! Amazing article dude! Thank you, However I am going through problems with your RSS. I don't know why I can't join it. Is there anybody getting the same RSS issues? Anyone who knows the solution will you kindly respond? Thanks!! Here is my homepage automatic forex trading - March 21, 2013
________________Comment
Anonymous said......
(9) Very soon this site will be famous among all blogging people, due to it's pleasant articles or reviews
Here is my homepage :: http://www.youtube.com/watch?v=opdUxdbSOh0 - March 21, 2013

Desperate Times Call for Desperate Measures:Yahoo CEO is Poised for the Challenge

Yahoo CEO Declares “No Pain, no Gain” Policies, and sparks fly. Marissa Mayer, Yahoo’s New CEO, makes a gutsy move, as she dares to go against the grain to get the company back on track. Marissa Mayer was brought in to turn the company around, and given the steep decline in valuation, a new vision and direction is drastically in order. As the saying goes; “desperate times cause for desperate measures”, and Mayer has declared telecommuting a “No, No”, among other new policies. In an apparent move to bolster innovation and collaboration within the company, Marissa Mayer has taken a very unpopular step toward reinventing Yahoo, and rebuilding their value and competitive edge.
Over a decade ago, when Yahoo was the technology darling of NASDAQ, it traded as high as $445 a share (Jan 1999) - while today it trades under $25 per share. That said, the dynamic CEO certainly has her work cut out for her. As brilliant as she is beautiful, Mayer broke the gender barrier at Google, as being the first female engineer there. Often described as “tough as nails” Mayer rose through the ranks – steadily up the Google management ladder, but seemed to have recently been overlooked for Larry Page’s Senior Leadership Team. Perhaps that made it a whole lot easier for Mayer to say goodbye to Google.

After an exhaustive search, for their next CEO, Yahoo stunned the tech community when they crowned Marissa Mayer as their next Chief Executive. In just six months, Yahoo’s newest CEO has created firestorm of media attention, and an unrelenting buzz, even rising to thelevel of outrage at times. This could be both good and bad for the company, but time will tell which way the pendulum will ultimately swing in that regard

Technology advancements have pushed the envelope in favor of telecommuting, while the troubled economy forced corporations of all sizes to rethink their policies and staffing structures. The global fiscal crisis created an opportunity for corporations to develop creative staffing and compensation structures to optimize space and costs. The tech companies had already created a blueprint that was implemented in varying degrees over the past decade.

So why is the move away from Telecommuting so controversial? In this age of advanced technology, the internet and wireless communication fostered globalization, and with it came the Telecommuting. Multinational corporations and small companies alike sought to optimize efficiency and costs by implementing mixed workforce (sometimes in different countries) which gave prominence to remote work options. Telecommuting has become a high accepted and commonly utilized working method, particularly for younger, innovative companies. A highly positive perception of Tech firms stem from the fact that the technology firms of the 21st century emphasized the importance of employee satisfaction concepts that promote employee-centric policies in support of work/life balance.

Meanwhile, a simple ban on telecommuting initiated by Yahoo’s CEO has sparked a major controversy - as tech experts voice their argument in for or against Mayer’s policy. For the record, Forbes has cited their support for Mayer’s Policy, while a Bloomberg contributor (Slayer) views the decision as daunting. Is Mayer’s decision to reverse the Telecommuting policy at Yahoo prompting fear that corporations that bought into employee-centric life/work concepts will dial back on their family friendly policies? Many strategists and analyst claim that this drastic change may be seen as a blow to working women, yielding a negative perception of Yahoo. Citing the “working woman” will be disproportionately impacted by any shift away from telecommuting. Well, you might be surprised to learn that although working women are perceived to the hardest hit by any trending policy away from telecommuting, it is actually men that will feel it the most. As it happens, the male population makes up the lion’s share of the telecommuters, yielding 73 % of the total number of remote workers in this country.

Nevertheless, this whole spectacle seems odd, and yet so telling of how powerful Marissa Mayer actually is. It is almost as if the future of Telecommuting is riding on this one decision, particularly due to the high profile of Yahoo, being one of THE most visible brands in the world. The fact is, Mayer has a sound strategy to get the company culture back to cutting edge innovation. In the spirit of mavericks like Steve Jobs, there’s a need for “all hands on deck” attitude to shake the company up. In all fairness, given Mayer’s Degree in engineering and Masters in Science Technology, she is far more suited for the challenge than her predecessors. The 4th quarter earnings report yields a 26% increase, year over year. That's a clear indication that Mayer's strategy is already having a positive impact on the company.

Back to Home Page

K Reilly
The Cohn-Reilly Report
www.Facebook.com/Cohn.Reilly

________________________ RECOMENDATIONS

Also Check out: Socially responsible Investing site below:
SocialResponsibleInvest.com

Check out the new Music and Art Forum on BlogSpot! "Its a refreshing departure from economics. it's like life's little desert snack."doARTorDIE

-COMMENT HIGHLIGHTS-

________________Comment
Anonymous said......
You're so awesome! I don't think I've truly read through anything like that before. So good to discover someone with some original thoughts on this topic. Really.. thanks for starting this up. This site is something that is needed on the internet, someone with a bit of originality! - March 4, 2013 Also visit my blog post cedar finance trader reviews
________________Comment
Anonymous said......
Excellent pieces. Keep writing such kind of info on your page. Im really impressed by your site. Hey there, You've performed a fantastic job. I'll certainly digg it and in my view recommend to my friends. I'm confident they will be benefited from this web site.
Here is my webpage :: cedarfinance - March 5, 2013
________________Comment
Anonymous said......
A motivating discussion is definitely worth comment. I do believe that you need to publish more about this subject, it may not be a taboo subject but usually people don't speak about these topics. To the next! Cheers!! - March 5, 2013
Here is my blog post stock trading tools
________________Comment
Anonymous said......
Way cool! Some extremely valid points! I appreciate you penning this article and also the rest of the website is very good. - March 4, 2013
Review my website binary options calculator
________________Comment
Anonymous said......
What’s up very cool site!! Guy .. Beautiful .. Amazing . I will bookmark your site and take the feeds also? I'm glad to find a lot of useful information here within the submit, we want develop extra strategies on this regard, thanks for sharing. . . . . . - March 5, 2013
my page - Binary options Affiliates
________________Comment
Anonymous said......
Great delivery. Solid arguments. Keep up the good spirit. - March 5, 2013
Visit my website - http://www.cedarfinance.com/
________________Comment
Anonymous said......
Hello, after reading this remarkable paragraph i am also delighted to share my familiarity here with mates. - March 5, 2013 Here is my web page :: cedar finance option builder
________________Comment
Anonymous said......
I was suggested this blog by my cousin. I'm not sure whether this post is written by him as no one else know such detailed about my trouble. You're incredible! Thanks!- March 5, 2013
Feel free to surf to my weblog ... strategies for trading binary options
________________Comment
Anonymous said......
I all the time emailed this webpage post page to all my friends, as if like to read it afterward - March 5, 2013 my contacts will too. Have a look at my web page ... how to withdraw funds cedar finance
________________Comment
Anonymous said......
After reading some nice stuff in your article I really feel speechlessEvent staffing agency

Contact Info CohnReillyReport@yahoo.com Facebook.com/Cohn.Reilly

Dancing with the Devil: A Breach of Trust

Yet again, the Golden Child of Wall St. is revealed as a fox in sheep’s clothing.
I was engaged in a debate about the role Goldman Sachs may have played in the downfall of Greece’s economy with a relative (through marriage) who migrated from Greece to the United States when she was 10. My research on the near collapse of the US financial market clearly points to the gradual deregulation and the unethical banking practices. There are a number of factors that contributed to the fiscal crisis, particularly the securitization of subprime Housing Loans, re-packaged and sold Globally as “A” rated paper. Regardless of the fact that the underlying debt was “C” rated, banks had the audacity to sell the mortgage-backed securities as “A” rated, low risk bonds. Of course, we can’t ignore the rampant Securities and Banking fraud, which generated hundreds of charges and investigations by the SEC against Banks and Hedge Funds.
I’ve written numerous articles about the Euro crisis. Like many economists, I believe the U.S. fiscal crisis precipitated the downward spiral of a number of EU members. This is mainly because of large quantities of foreign investment in U.S. Housing securities, which went sour. Much to my surprise, in the process of gathering data surrounding the global crisis, I learned that EU members; Greece, Italy, Spain and France, carried out non-transparent, accounting practices for over a decade. No doubt the high debt ratios hidden by accounting loop-holes would have eventually brought the weakest EU members to fiscal ruin at some point anyway.Although, our financial calamity accelerated the timeline of the reveal. America's financial troubles was the equivalent of lighter fluid, igniting the masked problems of the EU’s weakest links.

Apparently the Greek-American community seem to have a different slant on how Greece's economy found itself engulfed in a fiscal and political battle for stability. The lack of transparency and debt-to-revenue ratio was certainly taking its toll on the weakest EU members. This was made worse when changing leadership was blind-sighted by the urgency of country’s debt portfolio – particularly the derivative-structured debt owed to Goldman Sachs. When the housing market collapsed, interest rates increased, drastically increasing the debt service on the Goldman/Sardelis deal
My Greek-American in-law (who shall remain nameless), vehemently contends that Goldman Sachs is the monster that brought her beloved country to its knees. This is hardly the case, since Greece's debt was already 127% of its GDP by 2009. Also, by that time, Greece was seeking a bailout for over 300 billion Euros. Nevertheless, She was referring to a secret transaction between Goldman and the Managing Director of Public Debt Management Agency (Christoforos Sardelis), back in 2001, where a masked loan of $2.8 billion Euros was signed, sealed and delivered. Executed completely under the radar. The loan, which was thought to be earmarked for the preparation of hosting the 2004 Olympics, was later revealed not to be the case. Although I admit, the unholy alliance with Goldman was a financial set back, it was not the smoking gun.

The under-the-radar transaction executed by Sardelis and Goldman was a Currency Swap. Given the variable rate structure, there was mounting debt service, as interest rates increased, making it difficult for Greece to contain. I appears that Greece’s Debt Management Agency didn’t thoroughly analyze the deal to determine the long-term impact of this type of debt structure for Greece, given their compromised economy. A simple “what if” analysis would have helped them to analyze the impact of increasing interest rates. The Currency Swap transaction belongs to the derivative family, which are always complicated to quantify or analyze given the fluctuating market, currency and structure. These are highly risky transactions, and certainly not recommended for unstable municipalities suffering from high debt, declining GDP, and 25% unemployment.

The secret deal between Sardelis and Goldman could be classified as irresponsible given the size of the debt, and the fact that it was tied to fluctuating interest rates. The operative word being, “fluctuating”. Regardless of Sardelis’ good intentions, “it takes two to tango”. Therefore, Sardelis is equally at fault. My Greek-American in-law may be reluctant to accept it, but the blame has to be shared.

Since 2010, when I initially started writing about the Euro crisis, I learned that Sardelis was motivated by the Maastricht Treaty, requiring all EU members to show “improvement” in their public finances. This Goldman swap was a "dance with the devil" and simply a desperate attempt to “hide” the debt from the country’s books to comply with the Maastricht Treaty. These swaps were one of several techniques that European governments used to meet the terms of the treaty. There were certainly alternatives techniques available, so why did Goldman push this particular structure? Whatever the case, Sardelis was out of his element, and out smarted by his trusted Bankers. It was reported in the Wall St. journal that Goldman served up fictitious, historical exchange rates for the transaction, which earned them $760 million in U.S. fees.

Attemps to Implement Austerity Measures Lead to Violent Protests.

By the time Spyros Papanicolaou took over the Public Debt Management Agency in 2005, the loan had ballooned to over 5 billion Euros. Given the role that Goldman played in the fiscal unraveling of the housing market, which sent trimmers across the globe, you would think that their CEO, Blankfein, would consider a forgiveness of some portion of the debt. Goldman and Papanicolaou did get around to restructuring the debt, but I’d be willing to bet there was no forgiveness of debt.

Goldman Sachs may soon be faced with a public image dilemma, but until then I supposed they’ll continue to carryout their Mission to squeeze clients for every possible dollar.

Back to Home Page?

K Reilly
The Cohn-Reilly Report
www.Facebook.com/Cohn.Reilly
________________________ RECOMENDATIONS

Also Check out: Socially responsible Investing site below:
SocialResponsibleInvest.com

-COMMENT HIGHLIGHTS-

________________Comment
Anonymous said......
You should never stop investigating, researching and analysing the market to be reactive and play the main role on your market. of the Yahoo community. , to all your fans. my web site: Internet Marketing Coach ________________Comment
Anonymous said......
I precisely needed to appreciate you once more. I am not sure what I would've made to happen in the absence of the entire concepts documented by you relating to my subject matter. Entirely was an absolute intimidating dilemma in my opinion, however , discovering this expert avenue you solved it made me to jump over joy. I am just happier for this work as well as hope you find out what an amazing job you have been carrying out teaching people today all through your site. More than likely you haven't met all of us. / F2/20/13

________________Comment
Anonymous said......
You should never stop investigating, researching and analysing the market to be reactive and play the main role on your market. of the Yahoo community. , to all your fans. / February 24, 2013
________________Comment
Anonymous said......
I tend not to leave many remarks, but i did a few searching and wound up here "Dancing with the Devil: A Breach of Trust".

And I actually do have 2 questions for you if it's allright. Could it be only me or does it give the impression like a few of the remarks look as if they are written by brain dead people? :-P And, if you are posting at additional online sites, I'd like to keep up with anything new you have to post. Could you make a list of the complete urls of all your shared pages like your twitter feed, Facebook page or linkedin profile?
________________Comment
Anonymous said......
Hi, I do believe this is an excellent web site. I stumbledupon it ;) I am going to return once again since i have bookmarked it. Money and freedom is the greatest way to change, may you be rich and continue to guide others.
Feel free to visit my page - justin bieber smoking weed
________________Comment
Anonymous said......
Excellent post. Keep posting such kind of information on your site. Im really impressed by it. Hello there, You have done a fantastic job. I will definitely digg it and for my part suggest to my friends. I am confident they'll be benefited from this web site. Here is my homepage ; anuncios clasificados gratis
________________Comment
Anonymous said......
Howdy! I know this is kinda off topic however I'd figured I'd ask. Would you be interested in trading links or maybe guest writing a blog post or vice-versa? My website discusses a lot of the same subjects as yours and I think we could greatly benefit from each other. If you happen to be interested feel free to send me an e-mail. I look forward to hearing from you! Wonderful blog by the way!- 2/21/13