It's The Economy Stupid: So what does a greek default look like? One roadmap....

He's just a little ray of sunshine...

-----Original Message-----
From: DAVE LUTZ, STIFEL NICOLAUS
Sent: Monday, May 23, 2011 10:28 AM
Subject: So what does a greek default look like? One roadmap....


From this week's "That Make You Go Hmmm"

Last week, ECB threatened to refuse Greek sovereign debt as collateral – RBS says If the ECB did follow through with its threat, Greece's banking system would fail - "This is the last card in the hands of the ECB in warning about the implications of a restructuring"

Given that the ECB has played the "final card" it employed to force a bailout upon the Irish – threatening to bankrupt the country's banking sector – presumably we will now see either another Greek bailout or default within days.

What happens if Greece defaults:

• Every bank in Greece will instantly go insolvent.

• The Greek government will nationalise every bank in Greece.

• The Greek government will forbid withdrawals from Greek banks.

• To prevent Greek depositors from rioting on the streets, Argentina-2002-style (when the Argentinian president had to flee by helicopter from the roof of the presidential palace to evade a mob of such depositors), the Greek government will declare a curfew, perhaps even general martial law.

• Greece will redenominate all its debts into "New Drachmas" or whatever it calls the new currency - The New Drachma will devalue by roughly 50%, effectively defaulting on 50 per cent or more of all Greek euro-denominated debts.

The "Contagion"

• The Irish will, within a few days, walk away from the debts of its banking system.

• The Portuguese government will wait to see whether there is chaos in Greece before deciding whether to default in turn.

• A number of French and German banks will make sufficient losses that they no longer meet regula¬tory capital adequacy requirements.

• Given Paid in capital to the ECB is only €10 billion, the European Central Bank will become insolvent, given its very high exposure to Greek government debt, and to Greek banking sector and Irish banking sector debt.

• The French and German governments will meet to decide whether (a) to recapitalize the ECB, or (b) to allow the ECB to print money to restore its solvency (Forbidden by founding charter - On the other hand, the EU Treaty explicitly, and in terms, forbids the form of bailouts used for Greece, Portugal and Ireland, but a little thing like their being blatantly illegal hasn't prevented that from happening, so it's not intrinsically obvious that its being illegal for the ECB to print its way out will prove much of a hurdle.)

• There will be carnage in the market for Spanish banking sector bonds, as bondholders anticipate imposed debt-equity swaps - This assumption will prove justified, as the Spaniards choose to over-ride the structure of current bond contracts in the Spanish banking sector, recapitalising a number of banks via debt-equity swaps.

• Attention will turn to the British banks. Then we shall see…

It's The Economy Stupid

WTH!!!  Iceland volcano erupts.  Okay, I have this song going on in my head.  “It’s the end of the world as we know it…” by REM.

If you thought the economy in Euroland was not doing so well before, this ought to be the cherry on top for the summer travel season.

It's The Economy Stupid: Euro Trash

Euro Trash

Okay, it’s gonna be an ugly day in the markets.  Apparently the rating agencies should have been paying attention to what’s not been fixed over there in Euro land. Pick a country for the euro crisis earlier this year.  Greece, Spain, Italy, Ireland... 

The songs the same, just a different verse.

It's The Economy Stupid: Unemployment

Okay, Initial Jobless Claims dropped, Continuing Claims dropped, unemployment picture looking a little better today.

LSU distributes 37,000 tickets for Oregon game in Dallas

LSU distributes 37,000 tickets for Oregon game in Dallas

Published: Monday, May 16, 2011, 11:50 AM     Updated: Monday, May 16, 2011, 11:56 AM

By Michael DeMocker / The Times-Picyaune

LSU announced Monday morning that it has distributed 37,000 tickets for the season-opening game against Oregon in the Cowboys Classic on Sept. 3 in Arlington, Texas.

Thousands of LSU fans will be attending the Tigers' season-opening game against Oregon in Dallas. That's the most tickets LSU has ever distributed for a regular season away game. The previous high mark was 31,000 sold for the Tulane game in New Orleans in 2007.

"We have never seen this type of demand for a regular season game," Broussard said in a news release issued by the school. "There is obviously a great deal of excitement surrounding this game and it's a tribute our passionate fan base that we were able to sale our entire allotment

Lower Crest of the Mississippi River Possible

Local Mississippi River water levels expected to hold steady

Published: Monday, May 16, 2011, 7:45 AM

By Mark Schleifstein

The Times-Picayune

NOLA.com

The opening of the Morganza Floodway on Saturday and the ratcheting up of the Bonnet Carre Spillway flow to Lake Pontchartrain to 319,000 cubic feet per second on Sunday is keeping water levels in New Orleans right at the Mississippi's official 17-foot flood stage, a level not expected to vary much during the next two weeks, according to the National Weather Service.

And a lower crest of the Mississippi River on Sunday at Arkansas City, Ark., about 100 miles above Morganza, might help the Army Corps of Engineers in its plan to reduce the amount of water needed to be funneled into the Atchafalaya River Basin, which could reduce damage to homes, businesses and residences there.

The half-foot reduction in the expected crest at Arkansas City, believed the result of the overtopping of a levee a bit upstream, has allowed the weather service's Lower Mississippi River Forecast Center to drop its May 25 crest forecast at Morgan City to 11 feet, compared to an earlier estimate of 12 to 13 feet.

On Sunday, the corps increased to nine the open gates at Morganza, allowing about 90,000 cubic feet per second to flow into the Atchafalaya River, and keeping water in the Mississippi at Baton Rouge below 1.5 million cubic feet per second.

Over the next two weeks, as much as 125,000 cubic feet per second will be moved from the Mississippi to the Atchafalaya at Morganza, joining more than 700,000 cubic feet per second diverted into the Atchafalaya through the Old River Control Structure.

Reduced estimates of water flowing into the Atchafalaya from the Red and Ouachita rivers and the corps decision to use only a quarter of the Morganza Floodway capacity, instead of half, helped lower the Morgan City estimate, said David Welch, development operations hydrologist with the forecast center.

Refinery threats

The rising water is still expected to threaten a variety of oil and gas production facilities within the Atchafalaya Basin, according to state and federal officials. There are 589 producing oil and gas wells within areas that will be inundated with the opening of the Morganza Floodway, according to the state Department of Natural Resources, representing 19,300 barrels of oil a day and 252.6 million cubic feet of gas.

Also at risk is Alon Refining in Krotz Springs, on the banks of the Atchafalaya River, where state and local officials are beefing up an emergency levee system to protect both the refinery and other homes and businesses.

"Construction continues on the additional levee, and every indication I have is that the project is on track, " said Blake Lewis, a spokesman for the company.

"(The) refinery continues to be on normal operations and will remain that way until either a change in safe conditions is identified or the flood situation creates an unresolvable logistics issue, " he said. "I can't predict either circumstance."

The refinery processed an average 73,457 barrels of oil a day during the first quarter of 2011, according to a recent Security & Exchange Commission report. It receives petrochemicals and crude oil from major pipelines that run through the basin.

The oil and gas wells and other manufacturing facilities have been directed by both the state Department of Environmental Quality and the Louisiana Oil Spill Control Office to be prepared for the floodwaters and to secure loose equipment.

In addition to the wells, there are believed to be 97 storage tanks, 10 pipelines and 86 bulk liquid petroleum transportation facilities, as well as a number of retail, light manufacturing and other commercial sites in the path of high water.

Impact on residences

There also are about 28,000 residences within the floodway that are outside ring levees.

Officials say there also are 172 known archaeological and historic sites there.

The effects of the high water on farmland and communities in the Atchafalaya Basin is still a guessing game, in part the result of that river's successful transfer of the sediment contained in the 30 percent of the Mississippi that it normally carries to the Gulf of Mexico.

That sediment has been filling in many low spots and water bodies within the basin, especially during flood years, said Daniel Kroes, an ecologist with the U.S. Geological Survey. The survey is conducting a variety of studies during this year's high river event to track what's in the floodwaters and where it goes.

Kroes said large water bodies like Myette Point and Flat Lake have grown noticeably smaller since the first time Morganza was opened in 1973.

"People you bring out there today don't really recognize it if they haven't been watching the change, " he said. "Over the years, the river has deposited more and more sediment."

All that sediment also has created an 8.5 mile long delta at Wax Lake Outlet, just west of Morgan City, the only part of Louisiana's coastline that is growing.

The corps has requested the Geological Survey to conduct the studies, in part to help understand whether the floodwaters stay within the river channel and the crisscross of oil and gas canals that dot the basin, or whether the water and its sediment flow through all of the basin's wetland areas, Kroes said.

Researchers with Tulane University and Virginia Tech are assisting in gathering that data.

The Geological Survey's National Stream Quality Network also will be sampling what is in the water, both at the town of Melville near where it enters the floodway and to the south, in Morgan City and the Wax Lake Outlet, said George Arcement, director of the survey's Louisiana Water Science Center in Baton Rouge.

The scientists will be testing for nutrients, pesticides, suspended sediment, turbidity and alkalinity, and oil and grease, he said.

Similar sampling of materials carried by water through the Bonnet Carre Spillway also will begin in Lake Pontchartrain and last for several months, similar to research conducted after the spillway was opened in 2008, Arcement said.

Survey scientists also have deployed 57 storm surge sensors, usually put in place in advance of hurricanes, to measure water heights throughout the basin, he said.

Another 10 temporary monitors have been placed in key locations to help officials keep track with rising water as it moves down the basin. That data is available on the web at http://la.water.usgs.gov/.

Ole War Skule Movie: Stories of LSU Football

 

Ole War Skule Movie: Stories of LSU Football

http://www.olewarskulemovie.com/

 

Planet Pigskin Pictures in association with Wish Picture Shows presents a John Darling Haynes Film, a Dogman Productions, Inc. Production, a Joanna Jackson Haynes Production, a John Darling Haynes Production; 'Ole War Skule: Stories of LSU Football'; Narrated by: John Goodman;

 

If you love LSU, or even if you just love college football, this is a pretty good clip.

 

John Broussard

Assistant State Treasurer

Chief Investment Officer

State of Louisiana

Department of the Treasury

Ph:  225-342-0013

Fx:  225-342-9721

Email:  jbroussard@treasusry.state.la.us

Street Address:

301 Main Street

Baton Rouge, LA 70802

Mailing Address:

P.O. Box 44154 Capitol Station

Baton Rouge, LA 70804-4154

Physical Location:

One American Place, 7th Floor

Corner of North Street & 4th Street

Exit 1D I-110 North Street / Capitol Park / Downtown