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Tuesday, March 26, 2013

Media Whore D'oeuvres


"For years before the crisis, Cyprus promoted itself as an offshore financial center by creating a tax structure and banking rules that made depositing money in the country attractive to foreigners. As a result, Cyprus' financial sector grew to dwarf the rest of the Cypriot economy, accounting for about eight times the country's annual gross domestic product and employing a substantial portion of the nation's work force. A side effect of this strategy, however, was that if the financial sector experienced problems, the rest of the domestic economy would not be big enough to stabilize the banks without outside help. Europe's economic crisis spawned precisely those sorts of problems for the Cypriot banking sector. This was not just a concern for Cyprus, though. Even though Cyprus' banking sector is tiny relative to the rest of Europe's, one Cypriot bank defaulting on what it owed other banks could put the whole European banking system in question, and the last thing the European Union needs now is a crisis of confidence in its banks. The Cypriots were facing chaos if their banks failed because the insurance system was insufficient to cover the claims of depositors. For its part, the European Union could not risk the financial contagion. But Brussels could not simply bail out the entire banking system, both because of the precedent it would set and because the political support for a total bailout wasn't there. This was particularly the case for Germany, which would carry much of the financial burden and is preparing for elections in September 2013 before an electorate that is increasingly hostile to bailouts. Even though the German public may oppose the bailouts, it benefits immensely from what those bailouts preserve. As I have pointed out many times, Germany is heavily dependent on exports and the European Union is critical to those exports as a free trade zone. Although Germany also imports a great deal from the rest of the bloc, a break in the free trade zone would be catastrophic for the German economy. If all imports were cut along with exports, Germany would still be devastated because what it produces and exports and what it imports are very different things. Germany could not absorb all its production and would experience massive unemployment. Currently, Germany's unemployment rate is below 6 percent while Spain's is above 25 percent. An exploding financial crisis would cut into consumption, which would particularly hurt an export-dependent country like Germany. Berlin's posture through much of the European economic crisis has been to pretend it is about to stop providing assistance to other countries, but the fact is that doing so would inflict pain on Germany, too. Germany will make its threats and its voters will be upset, but in the end, the country would not be enjoying high employment if the crisis got out of hand. So the German game is to constantly threaten to let someone sink, while in the end doing whatever has to be done." (STRATFOR)



"He had just flown across the country after an exhausting campaign day in Oregon and South Dakota, landing at the White House after dark. But President Bill Clinton still had more business before bed. He picked up a pen and scrawled out his name, turning a bill into law. It was 10 minutes before 1 a.m. on Saturday, Sept. 21, 1996, and there were no cameras, no ceremony. The witching-hour timing bespoke both political calculation and personal angst. With his signature, federal law now defined marriage as the union of a man and woman. Mr. Clinton considered it a gay-baiting measure, but was unwilling to risk re-election by vetoing it.  For nearly 17 years since, that middle-of-the-night moment has haunted Mr. Clinton, the source of tension with friends, advisers and gay rights supporters. He tried to explain, defend and justify. He asked for understanding. Then he inched away from it bit by bit. Finally this month, he disavowed the Defense of Marriage Act entirely, urging that the law be overturned by the Supreme Court, which takes up the matter on Wednesday on the second of two days of arguments devoted to same-sex marriage issues. Rarely has a former president declared that an action he took in office violated the Constitution. But Mr. Clinton’s journey from signing the Defense of Marriage Act to repudiating it mirrors larger changes in society as same-sex marriage has gone from a fringe idea to one with a majority. 'President Clinton has evolved on this issue just like every American has evolved,' said Chad Griffin, who worked as a junior press aide in Mr. Clinton’s White House and now heads the Human Rights Campaign, the nation’s most prominent gay rights organization." (NYTimes)


"What parts of America have been growing during these years of sluggish economic growth?Answers come from comparing the Census Bureau’s just-released estimates of metro-area populations in July 2012 with the results of the Census conducted in 2010. The focus here is on the 51 metro areas with populations of more than 1 million where 55 percent of Americans live, most of them, of course, not in central cities but in suburbs and exurbs. Two growth champs stick out — Austin and Raleigh. A half-century ago, neither of them amounted to much. The counties now in metro Austin had 300,000 people in 1960. Those in metro Raleigh had 260,000. Now metro Austin is 1,834,000, and metro Raleigh is 1,188,000. Austin’s population grew by 6.9 percent and Raleigh’s by 5.1 in 2010-12. That’s huge growth in just two years. Both are high-tech centers with major universities. They had the biggest rate of domestic in-migration of any million-plus metro areas in 2010-2012. They both have reputations as cool cities. More important, they both have creative and vibrant private sector economies, fostered by relatively low tax rates and sensible regulation. Raleigh’s taxes and cost of living compare favorably with those in most states in the Northeast. Austin is attracting a lot of people from California, where the top income tax rate is now 13.3 percent. Texas’s income tax rate is zero. Next on the growth list are Texas’s three other million-plus metros, Dallas, Houston and San Antonio, which grew by 4.3 percent in 2010-12. Their populations grew by 622,000 people. That’s 12 percent of the entire nation’s population gain during that period. It’s more than metro New York, Philadelphia, Boston, Baltimore, Hartford and Providence combined. Texas is making a huge contribution to the nation’s demographic and economic growth. Not far behind are Orlando, Fla., with its tourism industry; Denver in healthy Colorado (the nation’s lowest obesity rates); Metro Washington, DC, which has the advantage of federal tax dollars pouring in; Metro Miami, where growth is greatest in farther-north Broward and Palm Beach counties; Charlotte, NC, the nation’s No. 2 banking center; Oklahoma City (natural gas); Phoenix, Ariz. (though immigration is way down); Nashville, Tenn. (health care and music); Salt Lake City (high birth rates); Seattle (high-tech, despite the rain); and Atlanta. On the other end of the growth list, metro Cleveland, Detroit and Buffalo are continuing to lose population, as their central cities empty out and inner suburbs age." (Michael Barone)


"Steven A. Cohen, whose SAC Capital just settled two insider-trading lawsuits with the government for $616 million, has bought himself a gift — Picasso’s 'Le Rêve' for $155 million, Page Six has exclusively learned. Billionaire Cohen secretly bought the masterpiece from Vegas mogul Steve Wynn, who famously put his elbow through the 1932 painting of Picasso’s mistress, creating a six-inch tear. The price is estimated to be the highest ever paid for an artwork by a US collector — and it’s even more impressive because Wynn had previously agreed to sell the masterpiece to Cohen for $139 million in 2006, but accidentally tore the painting the following day. A source told Page Six, 'Steve bought ‘Le Rêve’ as a gift to himself. This was supposed to be a top- secret sale because of the government investigation and settlement.' It reaped a hefty profit for Wynn, who also got a $45 million insurance payout after he elbowed the painting while showing it off to friends including Nora Ephron at his Las Vegas office. Wynn, who suffers from vision problems, agreed at the time to release Cohen from the sale and repair it. Now he has sold it to Cohen for $16 million more than the pre-damage price. Another source told us, 'Steve has wanted that painting for a long time. The timing of the sale is just a coincidence.' In what officials are calling the largest-ever settlement of an insider-trading action, SAC Capital Advisors LP agreed March 15 to pay securities regulators more than $600 million to resolve a civil lawsuit related to improper trading." (PageSix)


"Which, speaking of Palm Beach, it’s not quiet down there. The Season is in full swing. For those who keep track of these things, the high season starts its glorious wind down after the Preservation Ball, which is the first Friday in March. In the 1930s and 1940s the last time Palm Beach had this kind of social dynamic, the season lasted six weeks – February 10 through the end of March. And then it was on to the next. Nowadays with easy jet travel, they come and go throughout the colder months up north. And a lot of these fragile ones begin to get chilly up north by late October. Meanwhile, Rosita, Duchess of Marlborough arrived in PB on March 10. After a few weeks in Barbados. And she will be in PB until the end of this week. Rosita lives near Blenheim Palace at Lee Place where her former husband, the duke, grew up. When Rosita and the duke were married, they lived in the house during the summer when there were many tourists visiting Blenheim Palace. Rosita was given the house as part of her divorce settlement. She also has a house in London, what some say is a jewel of a house in St. Jean Cap Ferrat. Let’s hope so. Sunny, The Duke of Marlborough and his Duchess, Lily Mahtani are also in Palm Beach, at their apartment at the Everglades Club. Sunny (whose nickname derives from his first title Earl of Sunderland) has been coming to Palm Beach since he was a little one, visiting his grannie, another former Duchess of Marlborough, Consuelo Vanderbilt Balsan and her husband Jacques. Another former little one, Lord Charles Spencer-Churchill, brother of the duke, who has been coming to visit grannie since he was knee high to a grasshopper, has also been in Palm Beach recently, along with his charming best friend Sarah Goodbody. Those Brits never liked those big old draughty country houses when all those March winds are howling about." (NYSocialDiary)


"Speaking of private islands reminds me of a time long ago when I sold up and relocated to a private island in French Polynesia. My senior year was at a high school in the Rocky Mountains where I met Taha, a Tahitian lass. We bonded over our love of adventure and even engaged in a few explorations of our own devising. After high school Taha went west and I east and for the next decade or so we kept in touch by phone. The years piled up and we toiled in drab jobs. One day Taha learned she had inherited a cute little atoll in Tahiti. In a trice Taha took up residence and invited me to join, 'Just bring a bicycle, stay as long as you like,' she said. I was tantalized and soon I was extricating myself from a job and an apartment I did not love. A cab dropped me at JFK and left me in a pile on the curb with my brand new bicycle, my bags and my ticket to ride, and thus began the thrills. First one plane to LA and then another out into the middle of the Pacific Ocean. We landed in Papeete in a hurricane and were advised by the police to immediately seek shelter. My bike had been crushed by so many handlers so I dragged the thing out of the airport and there was Taha. We hugged and shrieked, as females do, and then we drove for half an hour past trees bending horizontally and metal roofs peeling from houses. At last we parked in a gated garden bordering a bay. Half a mile out was the island, a bushy green headdress of palm trees. 'We’ll come get your stuff tomorrow,' said my hostess, locking up the car. We hopped into a canoe and Taha paddled us off to paradise. That night we got plastered and Taha played the ukelele quite at odds with the noisy storm. Next morning Taha handed me a cup of coffee and then startlingly, she dashed up a palm tree and untwisted a coconut which she slashed with a machete and poured the milk elixir into our coffees. I was stunned. 'I’m never leaving!' I declared and we clanked cups. We got back in the canoe and oared across to the mainland to fetch my stuff. Scattered on the sandy ground all around the car were glass particles, like snow. The back window was smashed. And all my gear was gone, including the bike." (Christina Oxenberg)

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