“Some of us have been talking it over, and here’s what we think the end game looks like:

1. Greek euro exit, very possibly next month.

2. Huge withdrawals from Spanish and Italian banks, as depositors try to move their money to Germany.

3a. Maybe, just possibly, de facto controls, with banks forbidden to transfer deposits out of country and limits on cash withdrawals.

3b. Alternatively, or maybe in tandem, huge draws on ECB credit to keep the banks from collapsing.

4a. Germany has a choice. Accept huge indirect public claims on Italy and Spain, plus a drastic revision of strategy — basically, to give Spain in particular any hope you need both guarantees on its debt to hold borrowing costs down and a higher eurozone inflation target to make relative price adjustment possible; or:

4b. End of the euro.

And we’re talking about months, not years, for this to play out.”

SOURCE:
http://krugman.blogs.nytimes.com/2012/05/13/eurodammerung-2/?seid=auto&smid=tw-NytimesKrugman

“Greece is stuck in a vicious cycle of insolvency, low competitiveness and ever-deepening depression. Exacerbated by a draconian fiscal austerity, its public debt is heading towards 200 per cent of gross domestic product. To escape, Greece must now begin an orderly default, voluntarily exit the eurozone and return to the drachma.

The recent debt exchange deal Europe offered Greece was a rip-off, providing much less debt relief than the country needed. If you pick apart the figures, and take into account the large sweeteners the plan gave to creditors, the true debt relief is actually close to zero. The country’s best current option would to reject this agreement and, under threat of default, renegotiate a better one.

Yet even if Greece were soon to be given real and significant relief on its public debt, it cannot return to growth unless competitiveness is rapidly restored. And, without a return to growth, its debts will stay unsustainable. Problematically, however, all of the options that might restore competitiveness require real currency depreciation.

The first of these options, a sharp weakening of the euro, is unlikely while the US is economically weak and Germany über-competitive. A rapid reduction in unit labour costs, through structural reforms that increased productivity growth in excess of wages, is just as unlikely. Germany took 10 years to restore its competitiveness this way; Greece can not wait in depression for a decade.

The third option is a rapid deflation in prices and wages, known as an “internal devaluation”. But this would lead to five years of ever-deepening depression, while making public debts more unsustainable.

Logically, therefore, if those three options are not possible, the only path left is to leave. A return to a national currency and a sharp depreciation would quickly restore competitiveness and growth, as it did in Argentina and many other emerging markets which abandoned their currency pegs.”

SOURCE:
http://www.economonitor.com/nouriel/2011/09/19/greece-should-default-and-abandon-the-euro/

SOURCE:
http://bullishcross.com/2012/05/bullish-cross-initiates-rare-buy-rating-on-apple/

“With so much written about Apple AAPL -1.50% , I am amazed that so few have focused on the most important driver of its stock price: the company’s 270% return on invested capital ( ROIC ).

The most common bear arguments for AAPL are:

The stock has gone up so much already, it cannot continue

It is too large a holding in indices and funds

My responses:

Past performance (for stocks, ETFs or mutual funds) is not an analytically sound approach to predicting future performance. I know it is popular, and like technical analysis (in most cases), it works great until it suddenly stops working. And it usually stops because more fundamental factors take over. For example, American Airlines (AMR Corp) AAMRQ -1.73% traded with an inverse correlation to oil prices until shortly before it announced it was filing for bankruptcy due to staggering pension liabilities. Long-term trends are best predicted by deep fundamental analysis.

Apple deserves to be a large holding. It represents the best of corporate America.”

read the whole thing below…

SOURCE:
http://www.marketwatch.com/story/apple-bears-have-it-wrong-2012-05-14?link=mw_home_kiosk

Instead it will introduce its own mapping solution including a 3D view and Street View-like product adapted from a number of companies including Placebase, C3 Technologies and Poly9 which it has acquired in the past few years.”

SOURCE:
http://www.guardian.co.uk/technology/2012/may/11/apple-maps-io6-google?newsfeed=true