Apple continues to under-perform, yet continues to go exactly as anticipated by the latest 3 quarters of BoomBustBlog research. Let's take a more granular look at this, shall we...

appl copy

Believe it or not there are still many naysayers who are attempting to hold on to the notion that Apple is simply in  temporary dip, despite having a precise historical template from which to read the #margincompression theory (see Right On Time, My Prediction Of Apple Margin Compression 8 Quarters From My CNBC Warning Landed Right On The Money!) tea leaves from. Those tea leaves are steeped in a essence of Blackberry (reference BoomBustBlog Research Performs a RIM Job!) and they demonstrate clearly how quickly a seemingly fundamentally strong company that is an adored brand name can hit the skids when it fails to cannibalize its own margins. Basically, if you don't do it, someone else will do it for you.

For those of you who feel that Apple's slide is correlated with the fall of the NAZ, simply look again at the chart above. Apple's fall has taken on a macro-fundamental- forward looking fall of its own. Why is that? Well, after Deconstructing The Most Hated Trade Of The Decade, The 375% BoomBustBlog Apple Call!! I went into detail with Deconstructing The Most Accurate Apple Analysis Ever Made - Share Price, Market Share, Strategy and All. But wait, it goes deeper than that. The seminal research that we released that predicted the rise of Samsung over Apple  over a year ago has been proven accurate beyond a shadow of a doubt, now...


Apple -Competition and Cost Structure - unlocked Page 08Apple -Competition and Cost Structure - unlocked Page 08

Apple -Competition and Cost Structure - unlocked Page 09Apple -Competition and Cost Structure - unlocked Page 09

As can be corroborated through the latest findings by research company IDC: Q3 share of smart connected device market is: Apple 15.1%; Samsung 21.8%

Top 5 Smart Connected Device Vendors, Shipments, and Market Share, Q3 2012 (shipments in millions) 

Vendor

3Q12 Unit Shipments

3Q12 Market Share

3Q11 Unit Shipments

3Q11 Market Share

3Q12/3Q11 Growth

Samsung

66.1

21.8%

33.5

14.0%

97.5%

Apple

45.8

15.1%

33.1

13.9%

38.3%

Lenovo

21.1

7.0%

13.2

5.5%

60.0%

HP

14.0

4.6%

17.6

7.4%

-20.5%

Sony

11.0

3.6%

8.7

3.7%

25.4%

Other

145.6

48.0%

132.7

55.6%

9.7%

Total

303.6

100.0%

238.9

100.0%

27.1%

 

What many may fail to notice is the slot below Apple, occupied by Lenovo. The Chinese companies are bustin' ass once it comes to Android phones, not just in price, but also in features and quality as well. As stated in my last missive on this topic, no one can complain about not wanting a phone due to low Chinese quality because they're all Chinese now - including the iPhones and the Galaxy's - reference Smartphone Hardware Manufacturers Are Dead, Long Live The Google-like Solution Providers (this is an article that is a must read for those who do not know what is going in China re: Android phones and technology!).

Currently, the best phone on the market (feature-wise) also happens to be the cheapest phone on the market, and also happens to be a Chinese phone... Sold by a Chinese Company.

The-OPPO-Finders-Different-Views

This phone is one of the thinnest phones ever sold at 6.99 millimeters thick.

It has a 5 inch, FULL HD 1080p screen resolutionwith 441dpi density. This is approaching twice the resolution of the iPhone 5 and a full 1/3 greater pixels more than the "retina' screen.

The phone has the fastest chip on the market, the new quad-core Snapdgragon, materially faster than the chip inside the iPhone, and not just spec-wise but actual real world performance as well.

It has a 2.1 mega-pixel front facing camera that can do full HD video conferencing and a 12 mega-pixel rear facing camera with dual xenon flash (one of the highest resolutions in the market).

This cell phone will outrun and outperform a Macbook air laptop in many instances!

It is not a cheap Chinese knock-off. If anything, the iPhone 5 is a cheap American designed, Chinese made knock-off. Try doing this with your iPhone 5....

Oh yeah! A two year old already tried it, not with a grown man via hammer and nails, but just with her mommy's keys (may I add that iFixit is a well respected outfit):

Long story short, if anything, the iPhone 5 is the cheap knock off in terms of speed, durabilty or functionality!

This phone retails, unsubsidized and fully unlocked for just over $500 USD, as compared to the iPhone 5 which starts at $649. As I have been saying for quite some time, Apple is WAAAAYYYY behind the curve in terms of functionality, specs and quality and the only way they can catch up to the Android clan (that is if they even can catch up) is through share price destroying #MarginCompression, as told throughout this blog's Apple research history (see, again, Right On Time, My Prediction Of Apple Margin Compression 8 Quarters From My CNBC Warning Landed Right On The Money).

This is not a trading site, but the obvious is... Well... Obvious!

Subscribers, as recommended at the release of the iPhone 5, positions should have been moved to lean towards the pessimistic scenario in the lastest Apple report. Now that we have clearly pierced the optimistic and base case scenario valuations, I am now more convinced than ever that the pessimistic scenario will remain the focus in the upcoming months. If you have ridden this long until the iPhone 5 release then shorted, you should have ample profits. Profit protection is key, so to avoid a pop in the stock, take profits and set up a position to assume the realization of the pessimistic scenario in the upcoming quarters. 

The latest valuation bands can be accessed in the last few pages of the reports below by paying subscribers (click here to subscribe). I'd like to make clear that this research is worth significantly more than the relatively paltry subscription price it takes to access it. In just the last month, it's already worth more than $34,852,564,500 ($34,852,564,500 - That's How Much BoomBustBlog's Apple Research Was Worth Today!). In addition, it would've, could've, should've saved an entire renknown brokergage firm/investment bank from failure, reference The Blog That Could Have Saved That Institutional Broker - Or - Beware Of Those Poison Apples!!!

Subscribers, reference:

Apple 4Q2012 update professional & institutional
Apple 4Q2012 update - retail

Published in BoomBustBlog

 Yes, $34,852,564,500! That's how much BoomBustBlog Apple research was worth today as Apple dropped nearly 7% out of nowhere (as it gained over 7% for the exact same reason a couple of weeks ago). That's also the amount of money it took to turn the lights on in the hedge fund roach motel. Prepare to see ~240 funds who DO NOT subscribe to the blog start scurrying and scampering about, as per ZeroHedge:

 

So, you asked for what the research behind the firewall said, and now you have it:

apple puts small

Up 8% one day, down 7% in one day two weeks later... Apple is now comparable in volatility to Greek bonds!!! You know what that means... It may get worse once the pudits wake up and realize that the Apple App Store Has 4x Google Play Store Revenue, But Google's Store Growing Ridiculously 24x Faster! #MarginCompression! You see, the Apple App Store is the glue that holds Apple's customers in house. It's basically the network effect at work at its greatest. The problem is, if you no longer have the largest network, you know longer have the effect. This was clearly articulated last year, see I Absolutely Dare Anyone To Read This And Still Not Consider The Probability (Not Possibility) Of Apple Suffering From Margin Compression.

Subscribers see Apple 4Q2012 update professional & institutional and Apple 4Q2012 update - retail.

Published in BoomBustBlog

Lenine Imperialisme stade supreme du capitalismeMonday, I posted As Promised, Greece Guts Naive Investors Once Again… (a must read for those who don't know my extensive history on this topic), and received some very interesting if somewhat unbelievable feedback from the muppets among my readers (for those not versed in Muppets and muppetology, see Goldman Sachs Executive Director Corroborates Reggie Middleton's Stance: Business Model Designed To Rip Off Clients). As hard as it is to believe, there are actually still those who are of the mindset that the events of recent past were somehow solely or at least primarily market driven. Not trying to be facetious, or anything of the sort, but you muppets need to get a grip on reality. I'm going to reintroduce BoomBustBlog research from earlier in the year in three distinct topical sections, all in an attempt to expand the consciousness of the muppets amongst us. Professional and Institutional BoomBustBlog subscribers who don't want the brief in socio-economic theory and history can download our file iconGreek debt restructuring & maturity extension model and just get busy. Everyone else should continue on....

New Age Imperialism = Economic Colonization

As far back as 1920, Lenin explained what is happening to Greece (and likely soon Italy, Portgual, Spain and Ireland), and did so in exquisite detail may I add - as I excerpt from from Wikipedia's Imperialism, the Highest Stage of Capitalism:

In order for capitalism to generate greater profits than the home market can yield, the merging of banks and industrial cartels produces finance capitalism — the exportation and investment of capital to countries with underdeveloped economies. In turn, such financial behaviour leads to the division of the world among monopolist business companies and the great powers. Moreover, in the course of colonizing undeveloped countries, Business and Government eventually will engage in geopolitical conflict over the economic exploitation of large portions of the geographic world and its populaces. Therefore, imperialism is the highest (advanced) stage of capitalism, requiring monopolies (of labour and natural-resource exploitation) and the exportation of finance capital (rather than goods) to sustain colonialism, which is an integral function of said economic model.[3][4] Furthermore, in the capitalist homeland, the super-profits yielded by the colonial exploitation of a people and their economy, permit businessmen to bribe native politicians — labour leaders and the labour aristocracy (upper stratum of the working class) — to politically thwart worker revolt (labour strike); hence, the new proletariat, the exploited workers in the Third World colonies of the European powers, would become the revolutionary vanguard for deposing the global capitalist system.

Imperialism, the Highest Stage of Capitalism (1917), by Lenin, describes the function of financial capital in generating profits from imperial colonialism, as the final stage of capitalist development to ensure greater profits. The essay is a synthesis of Lenin’s modifications and developments of economic theories that Karl Marx formulated in Das Kapital (1867).[1]

the highest stage of capitalism, represents the stage at which a country's consumers cannot buy all the products that have been produced, and additional markets must be sought after. The dominant feature of imperialism is the repatriation of invested capital.

Cecil Rhodes and the Cape-Cairo railway project. Rhodes founded the De Beers Mining Company, owned the British South Africa Companyand had his name given to what became the state of Rhodesia. He liked to "paint the map British red" and declared: "all of these stars ... these vast worlds that remain out of reach. If I could, I would annex other planets."[4]

For those of you who don't see the connection yet, let's peruse some sample output from file iconGreek debt restructuring & maturity extension model :

So When It Comes To The Indebted, When Does 2 Euro + 24 Euro = Less Than 2 Euro, or You Can't Solve Insolvency By Piling On More Debt!

The first section of the graphic below shows Greece's funding requirement from the open market after it implements 65% haircuts across the board of its debt and reduces coupon rates in half by substituting existing debt with new debt as a Zero Coupon Bond Roll-up with 20 yr amortization. As you can see, such a plan (if it were doable) puts the country on relatively stable footing. Of course, if it were to do so the markets would extract their pound of flesh in terms of markedly higher coupon rates, which Greece presumably would not be able to afford (presumably). So, what do TPTB do? They push/offer 240B euros of bailout aid in the form of debt - debt that has to be serviced at some time in the short to medium term future since it is understood that Greece will not be able to get this funding from the market (is it understood, or presumed?). This debt is a multiple of what Greece can afford to service. It is a multiple of the debt that it has now, and this is not considering its condition after the still ongoing and draconian austerity measures forced upon it - thus cutting its GDP and revenue generating capability nearly in half (or so-ish).

Looking at the graph below, without adjusting for the austerity effect, Greece is considerably worse off after the bailout package, then before.

 BoomBustBlog Greek Debt Model sustainabilty

When observed over time, all this bailout and default/haricuts/restructuring buys Greece (in terms of time) is one year. In 2014, it's time to pay the piper and default once again as it begs for more bailouts with the overly stringent austerity price tag...

BoomBustBlog Greek Debt Model sustainabilty alt chart  

Now, who is lending this money that can easily be seen with a simple spreadsheet to be IMPOSSIBLE to pay back? It's the Troika, that's who. But these ivory tower beings who reign above us mere bloggers and investors from NYC must have supreme knowledge in the fact that they are assisting the unwashed, profligate masses, right????

Who Are These New Age Imperialists? The New Economic Colonizers Of The Globe???? 

Faithful BoomBustBlog readers should remember the empirical rant, How the US Has Perfected the Use of Economic Imperialism Through the European Union!, wherein the following was preached:

... the Euro members’ loan will be pari passu with existing sovereign debt i.e. it will not be considered senior. Although there is no written, hard evidence to support this claim, it is our view that otherwise there will be no incentive for investors to hold the debt of troubled countries like Greece, which will ultimately defeat the whole purpose of the rescue package. Moreover, there are indications that support this idea. As per Dutch Finance Minister Jan Kees de Jager, “We are not talking about a special preference for the eurogroup loans, that’s not possible because then you would have the situation that already-existing rights of creditors at the moment would be harmed.” (reference http://www.businessweek.com/news/2010-04-16/netherlands-excludes-senior-status-for-greek-aid-update1-.html). Of course, if more investors did their homework and ran the numbers, that same disincentive can be said to exist with the IMF's super senior preference given the event of a default and recoverable collateral after the IMF has fed at the trough.

The ramifications:

IMF’s preferred creditor status coupled with the expensive Euro members’ loans which are part of the rescue package can create a public debt snowball effect that could push the troubled countries towards insolvency when the IMF debt becomes repayable in three years time.

If you look at the output from our BoomBustBlog model, that event is clearly illustrated and articulated using simple (not complex) addition and subtraction (and some minor bond math).

This could be seen particularly in case of Greece (subscribers, please reference Greece Public Finances Projections). Even if all the spending cuts and revenue raising are achieved as planned for Greece, its debt will peak to 149.1% of the GDP in 2013. Please keep in mind that these numbers are based on what we perceived (as does simple math) to be pie in the sky optimism.

Being that this article is well over a year old, that pie in the sky optimism proved to be just that as we now Greek debt to GDP will break 200%!!!

I urge all readers to reference Lies, Damn Lies, and Sovereign Truths: Why the Euro is Destined to Collapse!.

image005.png

Notice how dramatically off the market the IMF has been, skewered HEAVILY to the optimistic side. Now, notice how aggressively the IMF has downwardly revsied their forecasts to still end up widlly optimistic.

 image018.png

Ever since the beginning of this crisis, IMF estimates of government balance have been just as bad…

image013.png

Many of my readers have inquired as to why the IMF has been so inaccurate in their estimates throughout the crisis. I doubt very seriously that it is a case of ineptitude. If one were to be a skeptic, and realize that the IMF charges stringent rates and can (and does) usurp the hierarchy of the claims upon assets upon its entrance, then one can clearly see a motivation in undershooting certain estimates. I am not saying that this is the case, but I would be remiss in failing to broach the topic. Remember, this is not your typical mainstream media publication, It's BoomBustBlog, and nothing is off limits.

IMF Economic Forecasts (%) 2010 2011 2012 2013 2014
Economic Growth 04 -2.6 1.1 2.1 2.1
Debt as % of GDP 133.3 145.1 148.6 149.1 144.3
Budget Deficit 8.1 7.6 6.5 4.9 3

The year 2013, with a IMF-proclaimed debt ratio of a tad under 150%, is the time when Greece will have to refinance the debt to pay the IMF (remember the charts above that show how optimistic the IMF has been historically). However, since the current debt raised by Greece is at fairly high rates, new debt will only be available at much higher rates (as markets should price-in the risk of high debt rollover) unless there is some saving grace of a drastic plunge in world wide interest rates and a concomitant plunge in the risk profile of Greece. At a 150% debt ratio, historically low artificially suppressed global interest rates that have nowhere to go but higher and prospective junk ratings from the US rating agencies, we don' t see this happening. Thus, the cost of borrowing for in 2013 is likely to be much higher in the market than the nearly five percent for the existing debt. Greece will either be unable to fund itself in the markets at all, and will have to convince the Euro Members and the IMF to extend the three-year lending facility just announced (reference What We Know About the Pan European Bailout Thus Far) or, it will get the debt refinanced at very high rates. In both cases the total debt as a percentage of GDP will continue to rise, and this is not a sustainable scenario over the longer-term. In addition, if it accepts the EU/IMF package and there is an event of default or restructuring, the IMF will force a haircut upon the private and public debtors beyond what would have normally been the case. This essentially devalues the debt upon the involvement of the IMF, a scenario that we believe many sovereign bondholders (particularly Greek, Spanish and Irish) may not have taken into consideration. This also leaves the possibility of a significant need for many banks to revalue their sovereign debt - particularly Greek sovereign debt - holdings.

As illustrated above, there is a higher probability for a Greek sovereign debt restructuring in 2013, which will definitely not hurt IMF (since it has a preferred right) but the Euro Members and other investors who will be holding the Greek debt.

So, now that we know who loses, who actually benefits?

image021

Members' quotas and voting power, and Board of Governors

Major decisions require an 85% supermajority.[19] The United States has always been the only country able to block a supermajority on its own.[20]

Table showing the top 20 member countries in terms of voting power (2,220,817 votes in total):[21]

IMF member country↓Quota: millions of SDRs↓Quota: percentage of total↓Governor↓Alternate Governor↓Votes: number↓Votes: percentage of total↓
United StatesUnited States 37149.3 17.09 Timothy F. Geithner Ben Bernanke 371743 16.74
JapanJapan 13312.8 6.12 Naoto Kan Masaaki Shirakawa 133378 6.01
GermanyGermany 13008.2 5.98 Axel A. Weber Wolfgang Schäuble 130332 5.87
United KingdomUnited Kingdom 10738.5 4.94 Alistair Darling Mervyn King 107635 4.85
FranceFrance 10738.5 4.94 Christine Lagarde Christian Noyer 107635 4.85
People's Republic of ChinaChina 8090.1 3.72 Zhou Xiaochuan Hu Xiaolian 81151 3.66

And there you have it. An encapsulated lesson on global imperialism (or how the US in now colonizing Europe, unlike the first time around during those pre-Boston tea party days). Is this or is this not an interesting way to introduce the concept of Greek bond defaults???

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Last week I warned if readers were tired of hearing me say "I told you so", they should ignore the topic of Greece, and a month ago I warned "As The Year Comes An End The Ability Of Greece To Kick The Can Mirrors The Chances Of A Man With No Feet". Eleven months ago, I publicly displayed the relatively simple mechanics behind a SERIAL Greek default (that's right, multiple bacl to back defaults), both on CNBC and on my blog... This situation will simply get worse, considerably worse, before it get better. I demonstrated in the post The Ugly Truth About The Greek Situation That's Too Difficult Broadcast Through Mainstream Media that anyone who purchased the last set of bailout bonds from Greece will simply lose their money as well (that's right, just like those who purchased the previous set) since Greece is still running deep in structural problems and can't afford the interest nor the principal on its borrowing. It's really that simple. The aforementioned link has an embeeded spreadsheet that walks you throught the scenario as well as my opinion on CNBC.

February 11, 2012, S&P at 1358, (roughly where it is right now on Dec. 3rd)

Yes, it's that easy to see coming - yet..... Here we are after a bond swap and a default, and a stern warning from BoomBustBlog that any who bought the new bonds in the bond swap would be facing redefault in less than three years and we have the following from Bloomberg: Greece Makes $13 Billion Buyback Offer as Merkel Floats Writeoffs

Greece offered 10 billion euros ($13 billion) to buy back bonds issued earlier this year as the bailed-out nation attempts to cut a debt load that may threaten future international aid.

Greek bonds rallied after the so-called modified Dutch auction was announced today by the Athens-based Public Debt Management Agency. PDMA offered an average maximum purchase price for the bonds maturing from 2023 to 2042 of 34.1 percent, based on information in the statement. The offer runs until 5 p.m. London time on Dec. 7.

Success of the buyback is crucial to releasing aid that’s been frozen since June. The offer was part of a package of measures approved by euro-area finance ministers last week to cut the nation’s debt to 124 percent of gross domestic product in 2020 from a projected 190 percent in 2014.

... The bid to ease Greece’s debt curden underscores a move away from austerity-first measures European leaders have embraced since the financial crisis began in 2009.

Because, even the most dense Eurocrat is now realizing that now matter how much you subtract something from zero, you will still get a negative number... Duhh!!!

German Chancellor Angela Merkel yesterday opened the possibility that Germany may ultimately accept a write-off of Greek debt, previously a taboo in the biggest contributor to euro bailouts.

Because the Germans have no choice but to come to grips with the fact that they are holding a bunch of zero paper (that's zero value, not zero coupon), and sooner or later they'll have to pay the piper.

Greek bonds rose for a third day, pushing the 10-year yield below 15 percent for the first time since the nation’s debt was restructured in March. The yield on the 2 percent securities maturing in February 2023 fell 151 basis points, or 1.51 percentage points, to 14.63 percent at 9:45 a.m. London time, leaving the price at 39.31 percent of face value. 

... Investors who join the buyback will receive payment in six- month bills from the European Financial Stability Facility, the Greek debt agency said.

Oh, they will get paid in that new funny munny paper that was just downgraded itself - EFSF, European Stability Mechanism Ratings Cut by Moody's, after it was downgraded before that - S&P downgrades European bailout fund. Keep in mind that these downgrades are from entities that are playing with kid gloves because, contrary to popular belief, they fear the EU states retribution - reference EU Allowing Rating Agencies To Be Sued For Errors Should Backfire Spectacularly - Cause Massive Downgrades Across The Continent!

The International Monetary Fund set the 2020 debt-cut target as a condition for continuing to fund a third of Greece’s bailout program. IMF Managing Director Christine Lagarde said after the euro-area finance ministers’ meeting that the fund will examine the results of the buyback before deciding whether to approve disbursement of additional aid.

The buyback accounts for 11 percentage points, or more than half of the 20 percentage points of the planned drop.

Yeah, right!!! Like the IMF has any idea what the hell its doing. Once again, as a reminder to the not-so-distant financially historically challenged, I bring you Lies, Damn Lies, and Sovereign Truths: Why the Euro is Destined to Collapse!:

Let's take a visual perusal of what I am talking about, focusing on those sovereign nations that I have covered thus far.

image005.pngimage005.pngimage005.png

Notice how dramatically off the market the IMF has been, skewered HEAVILY to the optimistic side. Now, notice how aggressively the IMF has downwardly revsied their forecasts to still end up widlly optimistic. image018.pngimage018.pngimage018.png

Ever since the beginning of this crisis, IMF estimates of government balance have been just as bad...

image013.pngimage013.pngimage013.png

The EU/EC has proven to be no better, and if anything is arguably worse!

image031.png

 While Greece has gotten pledges for 240 billion euros of aid, the funds have been blocked since June as the government tries to get its bailout program back on track after it was disrupted by two elections and a deepening recession.

 Check this out - "the government tries to get its bailout program back on track after it was disrupted by two elections". That damn democracy bullshit. Get's in the way of debt slavery a bit too much more my taste, eh??? 

Then there's " as the government tries to get its bailout program back on track after it was disrupted by... a deepening recession." Well, my friends, the recession would not be deepening so as much if the χώρα που δεν εξαναγκάζονται σε χρέος που προκαλείται από την υποτέλεια στο όνομα της λιτότητας! You can guess what that says if you don't read Greek!

Keep in mind that this is after the Greeks said they didn't have any problems (Greek Crisis Is Over, Region Safe”, Prodi Says – I say Liar, Liar, Pants on Fire!), after I Explicitly Forewarned, Greece Is Well On Its Way To Default, and Previously Published Numbers Were Waaaayyy Too Optimistic!, after an actual default and after a full restructuring. Said restructuing was actually guaranteed to produce another default, as clearly articulated and illustrated in  Beware The Overly Optimistic Greek Speculators As Icarus Comes Crashing Down To Earth! - to wit:

By the 2nd quarter of 2010 I clearly and articulately detailed exactly how Greece would default with specific structures in play- What is the Most Likely Scenario in the Greek Debt Fiasco? Restructuring Via Extension of Maturity Dates. Due to a few institutions who were skeptical, I attempted to make it a bit more real - A Comparison of Our Greek Bond Restructuring Analysis to that of Argentina.

Well, Greece defaulted according to plan, despite all of the "people in the know" saying otherwise -  - from government officials to the EC and IMF - Lies, Damn Lies, and Sovereign Truths: Why the Euro is Destined to Collapse! Even after the default, I made clear that this wasn't over for Greece, for the default actually left Greece worse off fundamentally, not better. Go wonder... I know I did, reference the warning from 5 months ago:

This will be exacerbated by a re-default of the Greek debt that was designed to bail out the defaulted Greek debt. Why will this happen? Greece has severe, rigid structural problems that simply cannot (and will not) be solved by throwing indebted liquidity at it. As a matter of fact, the additional debt simply exacerbates the problem - significantly! This was detailed in the post Beware The Overly Optimistic Greek Speculators As Icarus Comes Crashing Down To Earth!

..Subscribers can download my full thoughts on Greece's sustainability post bailout here - debt restructuring_maturity extension blog - March 2012. Professional and institutional subscribers should feel free to email me in order to receive a copy of the Greek restructuring model used to create these charts and come to these conclusions.

    • Even with the elimination of interest payments Greece will spiral downward.
    • Even with the near total absolution of its debt, as in a 90% haircut of the most recent bonds issued (which were swapped for bonds of which investors took an effective 74% haircut), Greece will spiral downward.
    • That is the likely reason why these newest bonds back by EU/IMF bailout economic capital are already trading 70 points below par and rated CCC.
    • These bonds are almost definitely slated for a 90%+ haircut by 2016

Ponder the excerpts from the news clips above as you keep these two charts in mind, the same charts that I've posted at least twice in the last 45 days. A picture is worth a thousand drachma...

Greece_Primary_balanceGreece_Primary_balanceGreece_Primary_balance

The primary balance looks at the structural issues a country may have.

Government expenditures have outstripped revenues ever since 2007 and have gotten worse nearly every year since, despite 3 bailouts a restructuring, austerity and a default!

Greece_Primary_deficit_copy

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Subscribers, please see the new research on this media, sports and entertainment company that made it to the consumer discretionary short list at BoomBustBlog: File Icon (Consumer Discretionary). I tweet new research as well as post it in the "Latest Subscription Content" section in the right hand column of the home page.

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Reggie_VPRO_Ratings_agenciesReuters reports that the EU now has made it easier to sue the ratings agencies for errors they have made, as excerpted:

Michel Barnier, the European commissioner in charge of regulation who helped broker a deal on the new law, said it aimed to reduce the over-reliance on ratings and establish a civil liability regime.

The new rules should make it easier to sue the agencies if they are judged to have made errors when, for example, ranking the creditworthiness of debt.

The agencies came under fire for giving top-notch AAA credit scores to debt that later unravelled and they provoked more criticism by downgrading countries at sensitive moments of the crisis.

The EU PTB need to make up their collective minds. If the agencies are to correct the (purposeful) errors made in giving entities AAA ratings that didn’t deserve them, then those very same entities will (and should’ve) been downgraded at sensitive moments in the crisis. This is the kicker, and the statement really should make the EU officials regret they did this, as well as bring back true returns on fundamental analysis realistic market pricing:

The EU's executive said that the new rules ensured that a rating agency could be held liable in cases of negligence or intent that damaged an investor.

You see, if you can really sue the agencies for being wrong, slow or negligent, then the Pan-European Sovereign Debt Crisis is a civil litigators 30 year capitalized Christmas present come true (even if they are Jewish). Let’s look at how this would have played out with the Greek debt and banks which should have traded as junk nearly 3 years ago as foretold by BoomBustBlog:

  1. Lies, Damn Lies, and Sovereign Truths: Why the Euro is Destined to Collapse! It was clear all were too optimistic regarding the Greek situation.
  2. Moody’s Follows Suit Behind Our Analysis and Downgrades 4 Greek Banks Moody's downgrades after the fact, and after investor losses are taken - LAWSUITS???!!!
  3. As I Explicitly Forwarned, Greece Is Well On Its Way To Default, and Previously Published Numbers Were Waaaayyy Too Optimistic! Greece's default was a foregone conclusion easil seen on BoomBustBlog, yet the agencies didn't reflect this in ratings. LAWSUITS???!!!
  4. A Comparison of Our Greek Bond Restructuring Analysis to that of Argentina Greece's bond restructuring would have had to have been extreme (as in damn near no recovery) to have had a chance of being effective. Did the agencies tell us this? LAWSUITS???!!!!
  5. This Time Is Different As Icarus Blows Up & Burns Greece's redefault was clearly visible before they even competed their first default. This was not reflected in agencies' opinions, analysis or reporting. LAWSUITS anyone???!!!

Greece's primary balance went long term negative in 2004, save the bubble levitated year of 2006...

Greece_Primary_balanceGreece_Primary_balanceGreece_Primary_balance

The primary balance looks at the structural issues a country may have.

Government expenditures have outstripped revenues ever since 2007 and have gotten worse nearly every year since, despite 3 bailouts a restructuring, austerity and a default! Simple addition and subtraction shows that there's no way in hell Greece can service its debt, defautled debt, or even its redefaulted debt or the round of debt after that. 

Greece_Primary_deficit_copyGreece_Primary_deficit_copyGreece_Primary_deficit_copy

We don't have to dwell in the past to prove this point either. Why hasn't Italy been dramatically downgraded? It's a wonder they finally got around to downgrading France (The Beginning Of The Great French Unwind…), after all of the evidence that I put forth - reference Italy Woes Lead To French Lows. Believe It… Let's stay on topic, about Italy? The 10 page BoomBustBlog report (subscribers, download the full report here File Icon Italy public finances projection, click here to subscribe) excerpted below is approaching 3 years old and it clearly outlined the tumult that is today's Italy and did so well in advance. My analytical staff is small in than Moody's stamp licking staff, yet somehow they fail to warn what I unequivocally cautioned on years ago. What was it did that EU official proclaim? Oh yeah... 

"The EU's executive said that the new rules ensured that a rating agency could be held liable in cases of negligence or intent that damaged an investor."

 Italy public finances projections Page 01Italy public finances projections Page 02Italy public finances projections Page 03

Subscribers (click here to subscribe) can dig in the archives for this still highly relevant and profitable Italy research:

File Icon Italy Exposure Producing Bank Risk
File Icon Italian Banking Macro-Fundamental Discussion Note

icon Sovereign Contagion Model - Retail (961.43 kB 2010-05-04 12:32:46)

File Icon Sovereign Contagion Model - Pro & Institutional

Tell me, why do you have to hear this from me versus the rating agencies? Here's the reason...

What Is More Valuable, The Opinion Of A Major Rating Agency Or The Opinion Of A Blog? Go Ahead, I DARE You To Answer!

There are many areas where ratings agenceis still are not putting enough pressure, a few of which have been pointed out at the blog:

For those who haven't seen this documentary on the rating agencies by VPRO, it is more than worth your time...

Reggie_VPRO_Ratings_agenciesReggie_VPRO_Ratings_agencies

Continuing my rant on the effectiveness (not) of the ratings agencies, I bring to you an interesting documentary on the rating agencies' effect on the sovereign debt crisis in Europe, produced by VPRO Tegenlicht out of Amsterdam. You can see the full video here, but only about half of it is in English. I appear in the following spots: 4:00, 22:30, 40:00...

Reggie Middleton Discussing the Rating Agencies effect on Sovereign Europe

 

 

 

Published in BoomBustBlog

Coming off of my post this morning lamenting on how most smartphone hardware manufacturers are dead in the water, I am reminded of the rant from August before last - The Mobile Computing Wars Are Progressing Exactly As Anticipated - Google Is Killin' Them!!! Well,I was right and as the investment world started coming to their senses, Apple's share prices visited physics 101 and danced with gravity, reference:

Many brand name following die hards think this is just a momo trading dip (BTFD), but those of you who follow my paid research closely know better, despite what those white shoe squid types may lead one to believe. As reported by Venture Beat's John KoetsierApple's app store revenue is 4X Google Play's … but Google Play is growing 24X faster and as gleaned directly from App Annie's blog:

 

jelly-bean-vs-ios6-620x325iOS revenues 4x that of Google Play, but watch out for Google Play’s growth

The gap between global revenues on iOS and Google Play is significant, but it’s gradually closing. Whilst iOS revenues are four times larger than its counterpart, Google Play revenue grew 17.9% in the last month, whilst iOS revenue contracted 0.7% in the same time period.

Apple’s App Store is still the king of mobile apps stores, with four times the revenue of Google Play, but Google Play is growing much, much faster than the App Store.

"While the iOS app store revenues grew 12.9 percent in 2012, Google Play grew an astonishing 313 percent. That’s something I wondered about in July when Apple’s third quarter sales results showed a $100 million drop in iTunes store revenues, but I lacked data at the time to make a full case. The same trend was visible in free downloads, where even though iOS users download 10 apps for every 9 apps Android users download, Google Play grew 47 percent to iOS’s 4.5 percent."

Interestingly, Japan’s Google Play store outsold all others in October 2012 — the first time a non-U.S. country has led in revenues on a major app store. That’s particularly amazing since Japanese users download at a rate that’s one-fourth the rate of U.S. user downloads.

“This represents a major tectonic shift in the international app store economy and one that I’m sure publishers will be looking to take advantage of,” said Schmitt.

 About a year and a half ago I opined on Why Software Developers Can Make More Money On Android. Of course, many developers chimed in by saying that I was out of my mind. It's amazing how rare pragmatic foresight is in this day and age. With revenue growingat 24x the rate of the market leader and not from an insignificant base, methinks I may have had a very valid point.
From App Annie's blog and downloadable report (click here for the source and the original report):
AppAnnieIndexNov2012Report.pdf utm sourceappannieutm mediumblogutm campaignc00041 Page 03AppAnnieIndexNov2012Report.pdf utm sourceappannieutm mediumblogutm campaignc00041 Page 05AppAnnieIndexNov2012Report.pdf utm sourceappannieutm mediumblogutm campaignc00041 Page 06AppAnnieIndexNov2012Report.pdf utm sourceappannieutm mediumblogutm campaignc00041 Page 07AppAnnieIndexNov2012Report.pdf utm sourceappannieutm mediumblogutm campaignc00041 Page 08AppAnnieIndexNov2012Report.pdf utm sourceappannieutm mediumblogutm campaignc00041 Page 09AppAnnieIndexNov2012Report.pdf utm sourceappannieutm mediumblogutm campaignc00041 Page 10AppAnnieIndexNov2012Report.pdf utm sourceappannieutm mediumblogutm campaignc00041 Page 11AppAnnieIndexNov2012Report.pdf utm sourceappannieutm mediumblogutm campaignc00041 Page 12AppAnnieIndexNov2012Report.pdf utm sourceappannieutm mediumblogutm campaignc00041 Page 13AppAnnieIndexNov2012Report.pdf utm sourceappannieutm mediumblogutm campaignc00041 Page 14AppAnnieIndexNov2012Report.pdf utm sourceappannieutm mediumblogutm campaignc00041 Page 15AppAnnieIndexNov2012Report.pdf utm sourceappannieutm mediumblogutm campaignc00041 Page 16AppAnnieIndexNov2012Report.pdf utm sourceappannieutm mediumblogutm campaignc00041 Page 17

We have created a revenue model that empirically compares the revenue generation potential to a software developer on Android and on Apple - assuming equal efforts are applied on both platforms! The last phrase is key. The results should be obvious to most, but alas there are probably many who may find it hard to grasp...

As of the last two quarters, the Android would have thrown off significantly more cash than iOS for a given app. That is not all. The assumptions used to derive these figures were heavily, heavily in favor of iOS. While there may have been objective cause to tweak heavily in favor of iOS due to the ubiquity of the Apple App Store in the past in comparison to the nascent nature of the Android ecosystem, Android's Marketplace now has between 150,000 and 200,000 apps and is reportedly adding 50,000 apps per quarter. Adding that to the fact that Android has the world's largest installed base AND the largest growth rate in the industry and this should be a no-brainer. Alas, in order to err on the conservative side if to err at all, we tweaked heavily in favor of iOS.

Published in BoomBustBlog

Coming off of my post this morning lamenting on how most smartphone hardware manufacturers are dead in the water, I am reminded of the rant from August before last - The Mobile Computing Wars Are Progressing Exactly As Anticipated - Google Is Killin' Them!!! Well,I was right and as the investment world started coming to their senses, Apple's share prices visited physics 101 and danced with gravity, reference:

Many brand name following die hards think this is just a momo trading dip (BTFD), but
those of you who follow my paid research closely know better, despite what those white shoe squid types may lead one to believe (reference pick to the left). As reported by Venture Beat's John KoetsierApple's app store revenue is 4X Google Play's … but Google Play is growing 24X faster and as gleaned directly from App Annie's blog:

 

jelly-bean-vs-ios6-620x325iOS revenues 4x that of Google Play, but watch out for Google Play’s growth

The gap between global revenues on iOS and Google Play is significant, but it’s gradually closing. Whilst iOS revenues are four times larger than its counterpart, Google Play revenue grew 17.9% in the last month, whilst iOS revenue contracted 0.7% in the same time period.

Apple’s App Store is still the king of mobile apps stores, with four times the revenue of Google Play, but Google Play is growing much, much faster than the App Store.

"While the iOS app store revenues grew 12.9 percent in 2012, Google Play grew an astonishing 313 percent. That’s something I wondered about in July when Apple’s third quarter sales results showed a $100 million drop in iTunes store revenues, but I lacked data at the time to make a full case. The same trend was visible in free downloads, where even though iOS users download 10 apps for every 9 apps Android users download, Google Play grew 47 percent to iOS’s 4.5 percent."

Interestingly, Japan’s Google Play store outsold all others in October 2012 — the first time a non-U.S. country has led in revenues on a major app store. That’s particularly amazing since Japanese users download at a rate that’s one-fourth the rate of U.S. user downloads.

“This represents a major tectonic shift in the international app store economy and one that I’m sure publishers will be looking to take advantage of,” said Schmitt.

 About a year and a half ago I opined on Why Software Developers Can Make More Money On Android. Of course, many developers chimed in by saying that I was out of my mind. It's amazing how rare pragmatic foresight is in this day and age. With revenue growingat 24x the rate of the market leader and not from an insignificant base, methinks I may have had a very valid point.
From App Annie's blog and downloadable report (click here for the source and the original report):
AppAnnieIndexNov2012Report.pdf utm sourceappannieutm mediumblogutm campaignc00041 Page 03AppAnnieIndexNov2012Report.pdf utm sourceappannieutm mediumblogutm campaignc00041 Page 05AppAnnieIndexNov2012Report.pdf utm sourceappannieutm mediumblogutm campaignc00041 Page 06AppAnnieIndexNov2012Report.pdf utm sourceappannieutm mediumblogutm campaignc00041 Page 07AppAnnieIndexNov2012Report.pdf utm sourceappannieutm mediumblogutm campaignc00041 Page 08AppAnnieIndexNov2012Report.pdf utm sourceappannieutm mediumblogutm campaignc00041 Page 09AppAnnieIndexNov2012Report.pdf utm sourceappannieutm mediumblogutm campaignc00041 Page 10AppAnnieIndexNov2012Report.pdf utm sourceappannieutm mediumblogutm campaignc00041 Page 11AppAnnieIndexNov2012Report.pdf utm sourceappannieutm mediumblogutm campaignc00041 Page 12AppAnnieIndexNov2012Report.pdf utm sourceappannieutm mediumblogutm campaignc00041 Page 13AppAnnieIndexNov2012Report.pdf utm sourceappannieutm mediumblogutm campaignc00041 Page 14AppAnnieIndexNov2012Report.pdf utm sourceappannieutm mediumblogutm campaignc00041 Page 15AppAnnieIndexNov2012Report.pdf utm sourceappannieutm mediumblogutm campaignc00041 Page 16AppAnnieIndexNov2012Report.pdf utm sourceappannieutm mediumblogutm campaignc00041 Page 17

We have created a revenue model that empirically compares the revenue generation potential to a software developer on Android and on Apple - assuming equal efforts are applied on both platforms! The last phrase is key. The results should be obvious to most, but alas there are probably many who may find it hard to grasp...

As of the last two quarters, the Android would have thrown off significantly more cash than iOS for a given app. That is not all. The assumptions used to derive these figures were heavily, heavily in favor of iOS. While there may have been objective cause to tweak heavily in favor of iOS due to the ubiquity of the Apple App Store in the past in comparison to the nascent nature of the Android ecosystem, Android's Marketplace now has between 150,000 and 200,000 apps and is reportedly adding 50,000 apps per quarter. Adding that to the fact that Android has the world's largest installed base AND the largest growth rate in the industry and this should be a no-brainer. Alas, in order to err on the conservative side if to err at all, we tweaked heavily in favor of iOS.

Published in BoomBustBlog

Two and a half years ago I declared in my mobile computing wars series that Google would commoditized the mobile computing space, thereby turning the industry on its head dramatically changing business models and margin outlooks. Curiously enough, despite rampant evidence that I've been nothing but correct, investors, pundits and even leading industry participants still don't get it. CNBC ran the following article this morning... Chinese Smartphone Users Snub Apple for Local Brands

Sales of smartphones in China are outpacing sales in the U.S., and yet many Chinese shoppers are choosing cheaper, local brands, which now have more than 50 percent market share. The Financial Times reports.

What CNBC failed to realize was that the primary beneficiary of all of this is Google, who benefits from volume in handset and tablet sales, not margin. I made this point clear in my paid research reports, free blog posts and multiple interviews - to wit:

Google's "less than free" business model has successfully put it on track to becoming the next Microsoft. Once it has 90+% market share in mobile OSs (it's currently knocking on 89%'s door), it will have the door opened to lead as the de facto provider of cloud services, basically acting as the Windows operating system (remember the importance of this OS in the 1990s) of the Web. We're not even broaching the topic of Google being the shepherd of global data and information throughout the web and the Internet connected world!

Let's face it, Smartphone Hardware Manufacturers Are Dead, Long Live The Google-like Solution Providers! 

For those who disbelieve this statement, remember, there are no such things as cheap Chinese knockoffs anymore. It's all made in China, at least from a hardware perspective. The only thing that wasn't outsourced to Cheap Chinese Labor (CCL, but soon to be known as iCCL - inflation dinged not so cheap anymore Chinese Labor) was the IP and tech behind the OS and software. Here, Google easily reigns supreme, with its only viable competitors being Microsoft Windows Phone 8/RT/Pro and Apple's iOS6. Apple is nearly out of the picture, its just that the Hoi Polloi haven't received the memo yet (as was the case with our view of RIMM 2 1/2 years ago, and you see how that ended). Microsoft is simply an OTM call option with a decent amount of time premium still on it.

chinese wholesale android

Here you have a device available right now for just $160 retail, even less wholesale, unsubsidized. It actually blows the spec pants off of the iPhone 4S and keeps the iPhone 5 in the conversation! For the record, the iPhone 5 retails for $650 to $850 dollars!

phone1phone2phone3

Potentially profitable and disruptive? Ask the classified and newspaper industries (or at least what’s left of them) if Google knows what it’s doing!!!!

As excerpted from our nearly 70 page forensic Google report (Subscribers, see Google Final Report 10/08/2010), I attempt to educate on the investment prowess of Google (that is both internal investment and external acquisition). Remember, many of Google's investments have become the largest instances of their type in the indsutry. The largest web video presence: YouTube! The largest mobile OS? Android! The largest mobile ad presence? Admob! the largest online productivity suite? Docs/Drive! I can go on with Gmail, Voice, etc., but if I haven't driven the message home yet then I probably never will. Google management has made it clear that YouTube will compete with major networks and Google Docs will compete and is actually pulling some business from Microsoft Office in the Enterprise. These are mere anecdotal examples. We all know the Android story already...

Google Final Report Sep 29 Page 49Google Final Report Sep 29 Page 49

Google Final Report Sep 29 Page 50Google Final Report Sep 29 Page 50

Google Final Report Sep 29 Page 51Google Final Report Sep 29 Page 51 

Google Final Report Sep 29 Page 52Google Final Report Sep 29 Page 52

Google Final Report Sep 29 Page 53Google Final Report Sep 29 Page 53

Google Final Report Sep 29 Page 54Google Final Report Sep 29 Page 54

Industry Leading, Subscription Based Google Research

All paying subscribers should download the Google Q1-2012 Valuation Summary, wherein we have updated the valuation numbers for Google using a variety of metrics. Click here to subscribe or upgrade

Google still exhibits the likelihood that they will control mobile computing for the balance of the decade.

Subscription research:

file iconGoogle Final Report 10/08/2010

A couple of bits from our archives...


There are currently 7 Google reports available. Select the "Google Final Report" and click the "Download" button. You will receive a 63 page analysis that looks like this on the cover...

The table of contents outlines how we have broken Google down into distinct businesses and identified both the individual business models and the potential revenue streams, as well as  valuation for each business line.

Page 57 of the analysis shows a sensitivity table which outlines the various scenarios that can come into play and how it will change our outlook and valuation opinion.

Professional/institutional subscribers can actually access a subset of the model that we used to create the sensitivity analysis above to plug in their own assumptions in case they somehow disagree with our assumptions or view points. Click here for the model: Google Valuation Model (pro and institutional). Click here to subscribe or upgrade.

Published in BoomBustBlog
Wednesday, 28 November 2012 05:49

Italy Woes Lead To French Lows. Believe It!

As a quick reminder, we're still looking out for the Great French Unwind, for it will start as The Pandemic Bank Flu Spread From Italy To France To ... You see, as I see it, the duopoly of those controlling the EU purse strings is far from invulnerable. As a matter of fact, from many perspectives, they have the farthest to fall. All you need to do is sit back and wait... Wait for the time when The Duopolistic Owners Of The EU Printing Presses Disagree On The Color Of The Ink! That's when the stinky brown stuff spatters from the fan blades. France will likely be the first to crack, with Italy as impetus, then recessionary Germany will stand alone, no? Not! For those hopium smoking Eurocrats who feel that Germany still will pull out of this unscathed, I reference the riddle: The Biggest Threat To The 2012 Economy Is??? Not What Wall Street Is Telling You...

I know all of this can get confusing, but it was easily foreseen back in 2010, and we've built a contagion model that helps track possible paths of mayhem. Of course, it's difficult to predict when things will go down or the precise route, but the how is really rather obvious. On with the concept of obvious, as stated many times in BoomBustBlog, French banks, hence the bank bailing socialist French government, is highly levered into Italy and Italian debt, among other porcine based fixed income instruments...

image008

Subscribers can reference French Bank Observations & Focus on...(519.21 kB 2012-06-28 08:36:37).  Part and parcel to this common sense update is recognition of the fact that Italy will bust French banks, causing France to do the socialist bailout thingy. See this chart from the report...

French bank Italian exposure

This exposure leaves France quite sensitive to Italian woes, considerably more so than your typical rating agency may lead you to believe even when downgrading France from AAA status - albeit it a year or so too late (Moody's Actions Add Pressure To The Inevitable In France?). Today, we see the MSM outlet CNBC espousing the obvious regarding Italy: Will Italy Need a Bailout in 2013? As you read this, remember they are essentially talking about France as 2nd derivative:

“We still see as our baseline scenario that Italy will likely be forced to ask for an international bailout at some point in 2013,” said Citi Analyst Giada Giani in a report on the country.

“Italian economic fundamentals have not really improved, despite some improvement in market conditions. The negative feedbacks from fiscal austerity on growth have been severe, as the ability of the private sector to absorb fiscal tightening by lowering its saving rate is limited.”

Economists at other banks and research institutions agreed that Italy’s recession will be deeper than financial markets are currently pricing in.

“The composition of austerity so far — skewed towards increases in taxation rather than cuts in expenditure — and the tight credit conditions, will weigh very negatively on the economy and the market will have to take stock of it,” said Nomura Economist Silvio Peruzzo.

“Weaker growth will have implications for fiscal plans and debt sustainability and could trigger a return of tensions.”

Mark Willis, an economist at Roubini Global Economics, said market focus on Greece’s and Spain’s economic woes had distracted investors from the structural weaknesses inherent in both Italy’s economy, and its political system.

He added that Italy suffered from three “core vulnerabilities” of weak growth, very high levels of public debt and regular bouts of political instability, the latter of which is likely to reappear in the build-up to the spring 2013 general election.

Italian woes lead to French Lows. Believe it! Subscribers are recommended to review the document icon Italy Exposure Producing Bank Risk (788.3 kB 2012-11-28 06:00:45)

As stated in the seminal pieces, The Anatomy Of A European Bank Run: Look At The Banking Situation BEFORE The Run Occurs! and The Fuel Behind Institutional “Runs on the Bank” Burns Through Europe, Lehman-Style!Bank runs are inevitable! 

Excerpted from our professional series File Icon Bank Run Liquidity Candidate Forensic Opinion:

BNP_Paribus_First_Thoughts_4_Page_01BNP_Paribus_First_Thoughts_4_Page_01BNP_Paribus_First_Thoughts_4_Page_01

This is how that document started off. Even if we were to disregard BNP's most serious liquidity and ALM mismatch issues, we still need to address the topic above. Now, if you were to employ the free BNP bank run models that I made available in the post "The BoomBustBlog BNP Paribas "Run On The Bank" Model Available for Download"" (click the link to download your own copy of the bank run model, whether your a simple BoomBustBlog follower or a paid subscriber) you would know that the odds are that BNP's bond portfolio would probably take a much bigger hit than that conservatively quoted above.  Here I demonstrated what more realistic numbers would look like in said model... image008image008image008

Yes, European bank runs are inevitable, but the causes of the bank runs are not. That's the problem. Instead of addressing the root causes of the bank runs, EU decision makers opt to throw more paper money into a gaping furnace to be burned as fast as it can be shoveled. 

Since the problems have not been cured, they're literally guaranteed to come back and bite ass. Guaranteed! So, as suggested earlier on, download your appropriate BoomBustBlog BNP Paribas "Run On The Bank" Models (they range from free up to institutional), read the balance of this article for perspective, then populate the assumptions and inputs with what you feel is realistic. I'm sure you will come up with conclusions similar to ours. Below is sample output from the professional level model (BNP Exposures - Professional Subscriber Download Version) that simulates the bank run that the news clippings below appear to be describing in detail...(Click to enlarge to printer quality)

image014

Published in BoomBustBlog