In which: Greece buys back some debt, Fedex has been overcharging, Soros and Buffett support estate tax, AIG is all sold, and the CFO makes some Libor arrests.

Good morning

The headlines:

  1. Greece completes her debt buyback.

    Link: now we wait.

    After briefly extending the deadline, Greece has received enough bonds to be able to complete its buyback. Drawing on €10 billion of facility to drawdown €30 billion of bonds removes an effective €20 billion of public debt. It takes the debt to GDP ratio down from 160% to 135% (by my calculations), without the humiliation of a bad haircut. No. This one just looks like the creditors chose it…

    That moment when you say “hey – that’s a cool haircut! …on someone else”.

    Now that it’s done, the official word is that there are no more “insurmountable obstacles” to Greece getting her next tranche of aid. We’re now waiting for a meeting tomorrow.

  2. Fedex “overcharged” customers for years.

    Link: the customer always feels overcharged.

    There is a class action suit against Fedex for charging customers a $3 surcharge for home delivery when the delivery was not going to anyone’s home.

    Now there’s an internal email floating around*, which shows the alleged systematic overcharging of businesses and government offices. And/or “racketeering”. Which sounds sexy and pirate-like.

    My question: did these customers not look at the invoice? Don’t you normally get a quote and then either accept or quietly thank the sales assistant for their time and promise to come back once you’ve had, um, a look around the mall?

    I suppose that $3 is under the radar for most companies. But not now.

    *There is always an internal email. And it’s always incriminating.

  3. Soros and Buffett join the estate tax cause.

    Link: “Death and taxes!!”

    George Soros, Warren Buffett, and a group of wealthy individuals, have written to Congress asking them to reduce the amount of their estates that would be exempt (from $5.12 million to $2 million), and raise the top tax rate from 35% to 45%.

    Of course, if Congress doesn’t make a call now, the Fiscal Cliff automatic triggers result in an exempt portion of just $1 million and a rate increase to 55%… So let’s not nominate anyone for sainthood quite yet. Because this proposal, in a month’s time, would be asking for a doubling of the exemption and a 10% cut in the top tax rate.

    Just to be clear.

    On the other hand, if you’re rich and you’re to pay any taxes at all, estate tax is the best kind: in a tax-me-over-my-dead-body kind of way. And, bonus, let the snotty brats finally learn the meaning of money.

  4. Did the American taxpayer just make a profit?

    Link: AIG is all sold back.

    The American Taxpayer no longer owns any portion of AIG, and the total profit from the bailout now sit at $22.7 billion. Sounds good.


    The direct shareholding in AIG was bought by the Treasury for $47.5 billion; with direct profits from the share sales of $4.1 billion. That’s an 8.6% return over 4 years. Which isn’t really that spectacular, when you think that the S&P 500’s return over the last 4 years was 62.3%.

    So no, Robert Willumstad*, I would not “argue today that the government got its money back and a healthy profit”.

    My vote for the real winner here is, unsurprisingly, the investment banks that got paid out their insurance in the end. And, of course, all their fees for managing the government’s exit from bailout.

    *AIG CEO at the time of the bailout.

  5. The Serious Fraud Office is serious.

    Link: arresting traders.

    The first Libor arrests have been made (three of them). It feels a bit like old news now.

That’s all for now.

Have a good day.