CME Clearing Europe Vacates Registration as Derivatives Clearing Organization Prior to Greek CDS Payouts

CME Clearing Europe has vacated its registration as a derivatives clearing organization, less than a week before the March 19th Greek debt auction, after which CDS payouts will be required.

CFTC Vacates CME Clearing Europe Limited Registration as a Derivatives Clearing Organization

Washington, DC—At the request of CME Clearing Europe Limited (CMECEL), pursuant to Section 7 of the Commodity Exchange Act, the Commodity Futures Trading Commission issued an Order on March 13, 2012, vacating the registration of CMECEL as a derivatives clearing organization.
The Order of Vacation is available on the CFTC’s website (see Related Links).

Why does one suppose the CME might ask to be vacated from CFTC registration only 6 days prior to March 19th when the Greek debt auction is held?

First, an overview of the CME Clearing:
"Welcome to CME Group's European clearing house. CME Clearing Europe has been established to offer greater choice of central counterparty clearing infrastructure to users of derivatives outside the US. CME Group has developed systems and operational and risk management standards that support its position as the world's largest and most diversified derivatives marketplace; and since 2002 has extended its clearing in the US to cover OTC derivatives: commodities, IRS and CDS. On the basis of those systems and the accumulated clearing experience and investment, CMECE aims to offer a full range of OTC derivatives clearing from its London base."

So it appears that the CME is scared s***less of the possibility of an imminent $50 trillion credit default swap seize up/ conflagration once the Greek CDS payouts begin after the March 19th Greek debt auction.  There is simply no other explanation for the CME to voluntarily request to vacate its registration as a derivatives clearing organization!

CME Clearing became registered on September 2nd, 2011 and requested to leave December 14th, 2011.

Interesting that the CME Clearing Europe had to supposedly notify the CFTC 90 days ago and it just happens to be approved by the CFTC only days after the ISDA decision that a credit event has occurred which will trigger the payout of CDSs.  There is no mention of the CME's request prior to today.

See PDF of full vacate request which is dated today below:

cmeceorder3-13-12

Goldman Loses $2.2B After Scathing Op-ed

oldman Sachs Group Inc. saw $2.15 billion of its market value wiped out after an employee assailed Chief Executive Officer Lloyd C. Blankfein's management and the firm's treatment of clients, sparking debate across Wall Street.

The shares dropped 3.4 percent in New York trading yesterday, the third-biggest decline in the 81-company Standard & Poor's 500 Financials Index, after London-based Greg Smith made the accusations in a New York Times op-ed piece.

Smith, who also wrote that he was quitting after 12 years at the company, blamed Blankfein, 57, and President Gary D. Cohn, 51, for a "decline in the firm's moral fiber." They responded in a memo to current and former employees, saying that Smith's assertions don't reflect the firm's values, culture or "how the vast majority of people at Goldman Sachs think about the firm and the work it does on behalf of our clients."

Former Federal Reserve Chairman Paul Volcker, 84, whose "Volcker rule" would limit banks like New York-based Goldman Sachs from making bets with their own money, called Smith's article "a radical, strong" piece. "I'm afraid it's a business that leads to a lot of conflicts of interest," Volcker said at a conference in Washington sponsored by the Atlantic.

Goldman Sachs slid $4.17 to $120.37 yesterday. The shares are still up 33 percent this year.

David Wells, a spokesman for Goldman Sachs in New York, declined to comment beyond the contents of the memo and an earlier e-mailed statement in which the firm said it disagrees with the views expressed in the op-ed.

Fraud Lawsuit

Executives at Goldman Sachs haven't changed their behavior even after the firm paid $550 million to settle a fraud lawsuit with the Securities and Exchange Commission and was accused by the U.S. Senate's Permanent Subcommittee on Investigations of misleading clients, Smith wrote. The company published a report in January 2011 with 39 recommendations on how to improve its business practices and client focus.

"Over the last 12 months I have seen five different managing directors refer to their own clients as 'muppets,' sometimes over internal e-mail," Smith wrote. "It astounds me how little senior management gets a basic truth: If clients don't trust you they will eventually stop doing business with you."

The article was e-mailed across Wall Street. One employee at Bank of America Corp.'s Merrill Lynch division, a competitor to Goldman Sachs, said his team was told not to send copies to clients. Parodies such as "Why I am leaving the Empire, by Darth Vader" on thedailymash.co.uk and theborowitzreport.com's "A Response from Goldman Sachs" also circulated.

'Does Hurt'

"It does hurt them," said Stephane Rambosson, managing partner at executive search firm Veni Partners in London and a former Citigroup Inc. banker. "The perception of the firm has gone down, and a lot of the winners of tomorrow are sitting back and thinking, 'Do I want to be with Goldman?'"

There's little evidence that the firm's popularity with clients has been hurt by the SEC lawsuit, the Senate's criticism or a recent ruling by Delaware Chancery Court Judge Leo Strine, who faulted Goldman Sachs's handling of a conflict of interest. The bank won more business than any other in advising companies on takeovers and equity offerings last year, according to data compiled by Bloomberg.

Some clients of Goldman Sachs's sales and trading department, the business in which Smith worked, said they are always cautious in dealings with Wall Street banks, understanding that their interests can diverge.

'Prostitution in Vegas'

"The argument that Goldman has become increasingly profit- driven, sometimes at the expense of clients' best interests, and that some employees use vulgar and disrespectful language, is hardly news," Whitney Tilson, founder of hedge fund T2 Partners LLC, wrote in an e-mailed commentary. "What's the next 'shocking' headline: 'Prostitution in Vegas!?'"

Smith was an executive director in London, a title equal to vice president in New York. The firm employs almost 12,000 vice presidents, and most said in a recent internal survey that "the firm provides exceptional service" to clients, Blankfein and Cohn said in the memo. Smith, who sold U.S. equity derivatives to clients in Europe, the Middle East and Africa, didn't respond to calls seeking comment.

Seven former Goldman Sachs partners and managing directors, positions that are more senior than vice president, said in interviews that Smith shouldn't be taken seriously because he was a junior employee and may have been disgruntled about his pay or career. All asked not to be identified because they didn't want to risk ruining their relationship with the firm.

Still, six of the seven said they agreed with Smith's criticism of how the firm has treated clients under Blankfein and Cohn's management and that current members of the management committee would, too. Even so, they said they don't expect the board of directors to take action or that anything will change because the firm has made money and outperformed most rivals.

'On a Pedestal'

"He may have aired a few comments that are true, but he's placed himself on a pedestal," said Jason Kennedy, CEO of the Kennedy Group, a London-based recruitment firm. "The reason he's been at Goldman Sachs for 12 years is that he liked the name and probably liked the money."

It's rare for people on Wall Street, especially at Goldman Sachs, to speak out publicly against their employers or former employees, said Roy Smith, a former Goldman Sachs partner who's now a finance professor at New York University's Stern School of Business.

"Who's going to hire someone who would do that?" he said. "The industry will close ranks on such things as whistle- blowing in this context."

Sales and Trading

NYU's Smith, who's not related to the author of the op-ed, said Wall Street's culture has changed because trading has become a more important source of revenue than the fees banks get from advising companies on takeovers or financing. Goldman Sachs generated 60 percent of its 2011 revenue from sales and trading.

The relationship with clients in the trading department differs from the investment bank, Smith said. Firms often are on the opposite side of a client's trade, and can profit at the client's expense. Still, it's not as simple as the article describes, he said.

"It just doesn't happen that it's easy to make money by ripping off your clients or counterparties because they're pretty smart people for the most part," he said.

Though some competitors relished the criticism of Goldman Sachs, which was the most profitable securities firm in Wall Street history before it converted to a bank in 2008, they may not be so different.

Smith's opinion piece "seems to be symptomatic of many, if not most, of the banks around the world," said Tom Kirchmaier, a fellow in the financial-markets group at the London School of Economics. "It might be that Goldman, as one of the most successful ones, is also one of the most extreme."

--With assistance from Ambereen Choudhury and Liam Vaughan in London and Cheyenne Hopkins and Jeff Kearns in Washington. Editors: Peter Eichenbaum, Dan Reichl

Massive NATO Exercise in Norway Provocation directed Moscow. Russian General sends "Arctic Warning" to US

Russian military experts: NATO exercise in Norway a provocation
The Cold Response 2012 exercise taking place in Northern Norway on the border to Russia is a provocation and a sign of NATO wanting to strengthen its geopolitical and diplomatic efforts with military might, two Russian military experts say.

The largest military exercise in Norway in ten years’ time is now taking place in Mid-Troms and involves 16,000 soldiers from 15 countries. The exercise includes the largest-ever live firing drill held on Norwegian territory.

"The current military exercise takes place amid NATO’s increased activities in the Arctic. This, in turn, is defined by the coming division of the natural resources in the region. Apparently, through flexing muscles NATO wants to show that it is set on strengthening its geopolitical and diplomatic efforts with military might", says Chief editor of the newspaper “National Safety” Igor Korotchenko to Voice of Russia.

The exercise could as well have been held on Canadian territory, says Vladimir Yevseyev of the Center for International Security of the Institute of Global Economy and International Relations: “Nevertheless, the exercises are being held on the territories of Norway and Sweden, in close proximity to the border of Russia. They might thus been seen as a provocation”. Russia has all grounds for concern, Yevseyev says, as “vessels equipped with the Spanish-based Aegis system can be deployed to the Arctic”.

The Aegis Ballistic Missile Defense System (Aegis BMD) is a ship-based system provided with long-range radar that enables warships to shoot down enemy ballistic missiles. The system is part of the United States national missile defense strategy.

Head of the Russian General Staff Nikolai Makarov has warned the USA that Russia will take the necessary countermeasures if U.S. vessels with the Aegis system are deployed to northern waters or to the Black Sea.

Russia is keeping a close eye on the military activities in the Arctic, Igor Korotchenko says to Voice of Russia: "Russia is now creating two Arctic mobile brigades which can operate in any part of the Arctic, where it is necessary to protect the country’s interests".

Two motorized rifle brigades specially trained for operations in the Arctic are planned to be created in the Murmansk and Arkhangelsk regions. In Murmansk it is the 200. The motorized infantry brigade in Pechenga, some 10 kilometers from the Russian-Norwegian border, is up for reorganization as an Arctic brigade, as BarentsObserver reported.

http://barentsobser ver.custompublis h.com/russian- general-sends- arctic-warning- to-usa.5021760- 16149.html

BarentsObserver
February 16, 2012

Russian general sends Arctic warning to USA
"We will not accept that U.S. vessels equipped with the Aegis Ballistic Missile Defense System operate in our part of the Arctic," the head of the Russian General Staff says.

Nikolai Makarov, leader of the General Staff of the Russian Armed Forces, stresses that Russia will take the necessary countermeasures if U.S. vessels with the Aegis system are deployed to northern waters or to the Black Sea.

Talking with journalists, Russia´s highest-ranking military official underlines that the appearance of U.S. vessels in northern Russian waters will definitely “pose a threat”.

“We have matching measures ready,” Makarov says, Nezavisimaya Gazeta reports. The general admits, however, that he is not keen on introducing the countermeasures, because they mean “additional financial spending”.

According to the general, the U.S.A. has been pressuring Norway to equip its Navy vessels with the missile defence system. “Norway has, fortunately, taken a balanced position,” Makarov says.

Russia continues to promote its nuclear weapon arsenal and strategic forces as its main military assets. In the interview, General Makarov stressed that the strategic forces will “under no circumstances” be subjected to budget cuts.

A key element in the Russian military strategy remains the role of nuclear submarines. Eight new strategic Borey class vessels, as well as eight multipurpose Yasen class subs, will be built before 2020. The two first vessels of the Borey class, the “Yuri Dolgoruki” and the “Aleksandr Nevski” will be formally included in the Navy in summer 2012, Makarov confirms.

The general also stresses that Russia will not hesitate to use its nuclear forces if needed. Talking to radio station Ekho Moskvy, the general says that “we are certainly not planning to fight against the whole of NATO […] but if there is a threat to the integrity of the Russian Federation, we have the right to use nuclear weapons, and we will.”

Russia’s nuclear deterrent is the cornerstone of strategic stability and serious efforts are being taken by the Russian government to modernize the country’s nuclear triad, RIA Novosti reports.

The Aegis Ballistic Missile Defense System (Aegis BMD) is part of the United States' national missile defense strategy. It enables warships to shoot down enemy ballistic missiles. According to Wikipedia, several countries have begun to deploy this system, among them Japan, Spain, the United Kingdom, Australia, Netherlands, Germany and South Korea.

An American vessel equipped with the system reportedly recently visited the Ukrainian Black Sea ports of Odessa and Sevastopol, triggering protests from Russia.

Greece on the breadline: HIV and malaria make a comeback

Jon Henley finds a medical aid organisation trying to plug the gaps as the health service nears breakdown

Doctors, nurses and paramedics clash with riot police outside the health ministry last May during a protest against cuts. Photograph: Alexandros Vlachos/EPA

The savage cuts to Greece's health service budget have led to a sharp rise in HIV/Aids and malaria in the beleaguered nation, said a leading aid organisation on Thursday.
The incidence of HIV/Aids among intravenous drug users in central Athens soared by 1,250% in the first 10 months of 2011 compared with the same period the previous year, according to the head of Médecins sans Frontières Greece, while malaria is becoming endemic in the south for the first time since the rule of the colonels, which ended in the 1970s.
Reveka Papadopoulos said that following health service cuts, including heavy job losses and a 40% reduction in funding for hospitals, Greek social services were "under very severe strain, if not in a state of breakdown. What we are seeing are very clear indicators of a system that cannot cope". The heavy, horizontal and "blind" budget cuts coincided last year with a 24% increase in demand for hospital services, she said, "largely because people could simply no longer afford private healthcare. The entire system is deteriorating".
The warning came as the IMF approved its €28bn (£23bn) share of Greece's latest €130bn bailout which it needs to meet its debts and maintain social services.
The head of the EU's taskforce to Greece, the German eurocrat Horst Reichenbach, gave a press conference in which he said the country's public administration would be overhauled by a team of experts. However, he said the bailout and last week's agreement on debt restructuring gave Greece the chance for a "new start".
MSF Greece said the extraordinary increase in HIV/Aids among drug users was largely due to the suspension or cancellation of free needle exchange programmes. "We are also seeing transmission between mother and child for the first time in Greece," Papadopoulos said. "This is something we are used to seeing in sub-Saharan Africa, not Europe.
"There has also been a sharp increase in cases of tuberculosis in the immigrant population, cases of Nile fever – leading to 35 deaths in 2010 – and the reappearance of endemic malaria in several parts of Greece."
According to Papadopoulos, such sharp increases in communicable diseases are indicative of a system nearing breakdown. "The simple fact of the reappearance of malaria, with 100-odd cases in southern Greece last year and 20 to 30 more elsewhere, shows barriers to healthcare access have risen," she said.
"Malaria is treatable, it shouldn't spread if the system is working."
MSF has been active in Greece for more than 20 years, but until now has largely confined its activities to emergency interventions after natural disasters such as earthquakes, and providing care to the most vulnerable groups in the community, including immigrants.
It is now focusing on supporting the public health sector, providing emergency care in shelters for the homeless and improving the overall response to communicable diseases. Papadopoulos, who spent 17 years abroad with MSF and returned to her native Greece three years ago, sees hope among the rubble. "What keeps me going is an increasingly strong sense of solidarity among the Greek people," she said. "Donations to MSF, for example, have of course gone down with the crisis, but donors keep giving, they remain active."
She sees a refreshing new phenomenon of self-organisation and social action. "In the past year of this crisis I have seen really encouraging, really exciting things happening – people are seeing the power of organising themselves. We have to support them."

Goldman Sachs Launches Counterattack on Greg Smith

oday, Goldman Sachs employee Greg Smith excoriated the investment bank in a New York Times op-ed, resigning due to the banks "toxic and destructive" culture, one in which the bank's trading profits took precedence over its customers' financial well-being. Goldman managers allegedly called customers "muppets," and traders routinely asked how much was being made ripping off one customer or another.

Goldman has been quick to push back on Smith's claims, portraying him as just a disgruntled employee. Some employees told Fox Business' Charlie Gasparino that Smith doesn't know what he's talking about because he "never made more than $750,000 a year."

And of course, the financial press has begun reporting anonymous attacks on Smith, quoting "people familiar with the matter" saying that Smith was angry with the size of his bonus and his lack of promotion:

- The Wall Street Journal reported that "people familiar with the matter" said that Smith is just miffed that his bonus was small: "The circumstances of Mr. Smith's departure aren't entirely clear. When Goldman doled out annual bonuses earlier this year, Mr. Smith's small payment became a point of friction, according to people familiar with the matter."

Forbes' Nathan Vardi wrote that Smith is just "having a midlife crisis": "Smith is not the first person who wants to tell his former bosses to shove it. He is also not a whistleblower."

The financial prognosticators at CNBC decided to mock Smith, saying that he would go form a media firm with Rolling Stone writer and staunch Goldman critic Matt Taibbi and the characters from Sesame Street. CNBC also compared Smith to Tom Cruise's character in Jerry Maguire, airing the clip of that film when Cruise asks "who's coming with me?" repeatedly, with no one actually going with him. Fox Business, meanwhile, insinuated that Smith just left because he didn't get a promotion and was paid a small bonus. Watch a compilation:

Bloomberg's William Cohan, author of "Money and Power: How Goldman Sachs Came to Rule the World," said today that Smith is "now in the Witness Protection Program" due to his sure ostracism from Wall Street.