Carbon Fraud?

What you didn't hear much about today...at least in the American news media and barely anything via finance news...the German cops got orders via the prosecutors and executed search warrants.

The target? Carbon trading. Yeah....legalized carbon trading.

Two hundred and thirty offices and homes were raided in a $238 million dollar episode of tax evasion.

Course, you might ask.....the trigger? Links to emissions trading. If you recall from about two months ago...Interpol and several law enforcement groups were hinting of a massive fraud effort in carbon trading...with the mafia possibly tied to it. Along the way....I'm guessing alot of naive folks who thought they were on the front end of a wave.

Part of this deal....relates to what they call "carousel fraud". Basically, you jump into a mess of speculation....make some profits quickly....and then disappear. So you help to drive up a price...profit...sell...and collect the money overnight, to fall back into the crowd of onlookers.

A trend? The cops and the banks aren't saying. But it doesn't help the cap & trade argument going on in the US...to watch events like this occur.

Bush & German Visit

There is a curious story out of the US and German press from yesterday... concerning a short piece from former President George Bush's wife. Lura Bush suggests...in her new autobiography....that they may have been the target of a poison attack during G-8 summit in Heiligendamm, Germany in 2007.

The curious part to this is both fell violently sick on the second day of the summit at the resort. Even the Secret Service got involved and had some type of suspicion that something had occurred. Adding to this....other members of the US delegation became ill...with one member who today suffers permanent hearing loss from the episode.

The odds? Well....normally, you'd just laugh this off, but the numbers of people involved and the hearing loss episode...well, this kinda makes it one of those that might be somewhat true.

Food poisoning? It's hard to get food poisoning in Germany. In fifteen years.....I only knew three folks who ever got food poisoning from a German establishment (all three were Tex-Mex German restaurants, if you were curious). It just doesn't happen much in Germany.

Seafood that was not prepared correctly? I'd give that one a ninety-percent chance. That's always possible.

A sour upset cook with an agenda? Yeah, there are far left-wing German cooks out there but why risk your entire career on some political agenda?

Some Russian KGB plot? Well....yeah, thats a remote possibility.

So we are left with this curious episode of the Bush visit to Germany. Had Bush died...President Cheney would have assumed the Presidency....so do you really think you've improved anything? I'd rather be hoping it was bad fish prepared the wrong way, and just bad luck that someone didn't catch it. If we were that close to getting Cheney....then Biden is just a quarter of a step away from the Presidency and some cooking nut could accomplish the same deal. Frankly, not something that I'd like to dream about.

Greek Spiral

There's a great article over at the Locale today.

Basically...this Greek-German debt problem is about to go into fourth gear. I suspect by this weekend...over three quarters of the German public will be against any loan, of any type.

The article centered around an opinion of Hans-Werner Sinn of the Ifo Economics Institute.

In a radio interview....he came out very direct....zero chance that Greece can ever pay back the loan. Then, like a cherry on a ice cream sundee....he added that Greeks would eventually ask Germany to waive the debt.

Basically...it's a giveaway deal....and people are beginning to wake up.

What happens here if the public starts to get upset by this weekend and stall this out?

This entire mess in turbo right now. The Greeks need the money within a matter of a couple of weeks. I doubt that they can wait more than 1 month max. If Germany stalls out and says no....the entire EU deal falls apart and the IMF deal is the only one on the table. IMF never waives debt and always demands a massive change in policy. It'd destroy the current Greek government if this occurs.

So as this week unfolds in Germany....watch for regular people on the street to discuss this and by Sunday night...with the chit-chat shows in full swing....it'll be the decision point. I'm betting they say 'no'. And then on Monday....a wide swing on the Euro rate and some Greeks pulling their money out of Greece to hide in the attic.

The Greek Problem

There are two stories today with Germany and Greece.

First, a media group went out and surveyed Germans....to find that fifty-seven percent of Germans absolutely think giving loans to Greece is a mistake.

In fact, they found on thirty-three percent who favored the action.

Political parties? They are watching this....but it's a difficult decision to back out of this deal. and remember...Germany and France are the only two countries that could both pop out $15 billion each....to help cover the situation. The rest of the EU might be able to find $10 billion total to contribute.

The second story? Credit groups downgraded the Greeks to junk bond status. The entire EU banking industry is likely sitting there tonight and trying to gauge where things go tomorrow morning. I'm predicting a two-percent drop across the entire European investing sector tomorrow....and the Euro will fall against the dollar (not exactly a bad thing).

If I were a Greek citizen....I'd start to look at my banking sector and wonder if my money is secure and if they can cover my use of my own capital.

The Bavarian-Greece Slant

As if there weren't enough problems with Greece's economic fall...this weekend....the CSU (the political party of a very conservative nature in Bavaria...as far as you can go and still be acceptable)...voiced the idea that the Greeks ought to be shown the door of the EU and marched to it.

There was also the hot topic of what the German Constitution says about loaning out funds at a cheap rate to fellow EU members. The CSU doesn't think this deal will fly with the laws of the land.