Kung-Fu Analyst Reggie Middleton Karate Chops the Troika's Numerical Farce in the Face!

The EU catches on that the Eurozone is facing recession while greece is still the gum on everyone's shoe. The European Commision in its latest projections forecasts a 0.3 percent contraction with Greece leading the way…but it now expects countries such as spain and italy to contract too – which is different from its last forecasts. But Greece is still the whipping boy for the northern europeans and the press in general. With Greece's parliament approving the bond swap, some people say that this won't be enough, that we need a full default. Just look at Greece's GDP numbers, its unemployment numbers, its industrial output and its household and corporate credit…its all off the charts…falling off the charts that is. So why are the projections so rosy, like those in the TROIKA's debt sustainability document that we broke down earlier this week, something that our next guest knows about all to well – he kicks the crap out of mainstream analysis for a living. He has been warning that Greece is headed towards default for two years now, and for anyone billing this latest Greek deal as a "solution," Kung–Fu analyst Reggie Middleton is here to Karate–chop the accounting shenanigans masking the real story. He's here to tell us why more than default, the word of the day on everyone's mind should be CONTAGION. Why? Well, lots of reasons, one of which his the human nature reality, as Reggie Middleton puts it, that once Greece defaults and does not get absolutely obliterated, other nations will wonder why they should suffer through extreme austerity measures while Greece defaults and gets to start over without paying back its debt. If you were Portugal, Ireland, Spain, etc. why would you ever pay back all this debt if you knew that you could default and get away with it? It's the prisoner's dilemma except in an EU straight jacket…

Meanwhile, as Europe confronts the potential of recession and the contagion of a banking flue, the prime piece of regulation being touted in the US known as "the Volcker Rule," which is supposed to stop banks from proprietary trading, or trading for their own accounts with customer money, is being fought tooth an nail by not just US banks but foreign ones too. According to critics including members of Occupy the SEC, there are many ways banks can get around the spirit of the law because of loopholes in the several-hundred-page rule proposal. Nonetheless Wall Street has been lobbying against the rule throughout the process. And some foreign governments have recently been coming out against it. In an editorial in the Financial Times, the finance ministers of Britain and Japan write, “both our governments have expressed concerns about the“Volcker Rule”. They cite “unintended consequences,” and one they name is this: “there is an exemption for trading in US government securities but not other sovereigns, so it could reduce liquidity in non-US sovereign markets, making it more difficult, costlier and riskier for countries to issue and distribute debt.”Now regarding that argument itself, Paul Volcker wrote in the Financial Times it's basically a joke, saying banks in Europe, Japan, and Canada should be able to pick up the slack.But why have these foreign governments joined US banks in the fight against the Volcker Rule now?Well take a look at these revelations from Bloomberg: “USbanks pushed regulators to widen proposed restrictions on trading and hedge-fund ownership by foreign firms, then encouraged governments around the world to complain about the rule’s reach.”Bloomberg cites several sources who say that last year banks including JP Morgan and Morgan Stanley lobbied the Fed and regulators to apply the Volcker Rule regulation more broadly to companies based outside the US. Then, they sentpapers to Washington embassies of foreign governments, meeting with officials, warning them their sovereign debt prices would suffer if these regulations were applied.

And lastly, we just have to cover this, because Demetri Kofinas is a big knicks fan who has been suffering during this Linsanity period as he cannot go to a single game being that he is stuck in the nation's capital, far away from the big apple. It appears now that Nike is looking towards basketball sensation Jeremy Lin as a way to "open the door" into the chinese market. 

Charlie Denson, president of the Nike brand, told the Financial Times that the world’s biggest sporting goods maker by sales was already exploring ways to profit from its most unexpected celebrity in China. 

“No question. We’re developing plans as we speak,” he said. “The fact he’s experiencing the kind of success he’s having now is a very, very pleasant surprise for us.” Nike, however, declined to comment on rumors that it was working on a Lin signature shoe.