Hedge Funds May Sue Greece if It Tries to Force Loss - (www.nytimes.com) Hedge funds have been known to use hardball tactics to make money. Now they have come up with a new one: suing Greecein a human rights court to make good on its bond payments. The novel approach would have the funds arguing in the European Court of Human Rights that Greece had violated bondholder rights, though that could be a multiyear project with no guarantee of a payoff. And it would not be likely to produce sympathy for these funds, which many blame for the lack of progress so far in the negotiations over restructuring Greece’s debts. The tactic has emerged in conversations with lawyers and hedge funds as it became clear that Greece was considering passing legislation to force all private bondholders to take losses, while exempting the European Central Bank, which is the largest institutional holder of Greek bonds with 50 billion euros or so.
A NY Fed Employee Accused Of Stealing Computer Code Could Face 10 Years In Prison - (www.businessinsider.com) A computer programmer who worked at the Federal Reserve Bank of New York has been accused of stealing computer code used to track government finances. Bo Zhang (zahng) was arrested Wednesday. Authorities say he stole the code last summer while working on it as a contract government employee. The 32-year-old Queens resident could face up to 10 years in prison if convicted. The Federal Reserve Bank of New York is part of a system that helps operate the nation's payment systems and protects consumers dealing with banks.
Kodak Files for Bankruptcy Protection - (www.bloomberg.com) Eastman Kodak Co. (EK), the photography pioneer that introduced the Brownie Camera more than a century ago, filed for bankruptcy after consumers embraced digital cameras, a technology Kodak invented and failed to commercialize. The Rochester, New York-based company, which traces its roots to 1880, listed assets of $5.1 billion and debt of $6.8 billion in Chapter 11 documents filed in U.S. Bankruptcy Court in Manhattan. “They were a company stuck in time,” said Robert Burley, an associate professor at Toronto’s Ryerson University who has photographed shuttered Kodak facilities in the U.S., Canada and France since 2005. “Their history was so important to them, this rich century-old history when they made a lot of amazing things and a lot of money along the way. Now their history has become a liability.”
December Housing Starts MISS Expectations In A Big Way - (www.businessinsider.com) Housing starts fell 4.1% in December, to 657K on an annualized basis. Analysts were predicting that they would fall from 685K to 680K. That would have amounted to a drop of 0.7% from November. Last month, housing starts smashed expectations, jumping 9.3% month over month. We've seen a slew of positive housing data recently, and this negative number could be a sign that the positive trend has been overblown. Or not.
Who Is Being Rescued -- It ain't you or me: It's bondholders - (www.ritholtz.com) Never forget exactly who is being rescued by Central Bank/Political bailouts! Here’s a hint: It ain’t you or me: “…it is important to remember that the attempt to rescue distressed European debt by imposing heavy austerity on European people is largely driven by the desire to rescue bank bondholders from losses. Had banks not taken on spectacular amounts of leverage (encouraged by a misguided regulatory environment that required zero capital to be held against sovereign debt), European budget imbalances would have bit far sooner, and would have provoked corrective action years ago. The global economy has not been well-served by the financial companies that leaders are trying so desperately to protect. Our vote is for receivership and restructuring so that losses can be taken by those who willingly accepted the risk of loss, and the legacy of bad investments and poor capital allocation doesn’t have to be converted into a future of suppressed economic growth.” (emphasis added)
John Hussman, January 3, 2012 “The Right Kind of Hope”