Showing posts with label Global News. Show all posts
Showing posts with label Global News. Show all posts

Friday, January 3, 2014

Angela Merkel’s policies are giving rise to extremist movements in the rest of Europe...

About The World Economy – Efforts to revive growth in the world’s most influential economies – with the exception of the eurozone – are having a beneficial effect worldwide. All of the looming problems for the global economy are political in character.
After 25 years of stagnation, Japan is attempting to reinvigorate its economy by engaging in quantitative easing on an unprecedented scale. It is a risky experiment: faster growth could drive up interest rates, making debt-servicing costs unsustainable. But Prime Minister Shinzo Abe would rather take that risk than condemn Japan to a slow death. And, judging from the public’s enthusiastic support, so would ordinary Japanese.
By contrast, the European Union is heading toward the type of long-lasting stagnation from which Japan is desperate to escape. The stakes are high: Nation-states can survive a lost decade or more; but the EU, an incomplete association of nation-states, could easily be destroyed by it.
The euro’s design – which was modeled on the Deutsche Mark – has a fatal flaw. Creating a common central bank without a common treasury means that government debts are denominated in a currency that no single member country controls, making them subject to the risk of default. As a consequence of the crash of 2008, several member countries became over indebted, and risk eurozone’s division into creditor and debtor countries permanent.
This defect could have been corrected by replacing individual countries’ bonds with Eurobonds. Unfortunately, German Chancellor Angela Merkel, reflecting the radical change that Germans’ attitudes toward European integration have undergone, ruled that out. Prior to reunification, Germany was the main motor of integration; now, weighed down by reunification’s costs, German taxpayers are determined to avoid becoming European debtors’ deep pocket.
After the crash of 2008, Merkel insisted that each country should look after its own financial institutions and government debts should be paid in full. Without realizing it, Germany is repeating the tragic error of the French after World War I. Prime Minister Aristide Briand’s insistence on reparations led to the rise of Hitler; Angela Merkel’s policies are giving rise to extremist movements in the rest of Europe. It is unfortunate that the current arrangements governing the euro are here to stay, because Germany will always do the bare minimum to preserve the common currency and because the markets and the European authorities would punish any other country that challenged these arrangements. Nonetheless, the acute phase of the financial crisis is now over. The European financial authorities have tacitly recognized that austerity is counterproductive and have stopped imposing additional fiscal constraints. This has given the debtor countries some breathing room, and, even in the absence of any growth prospects, financial markets have stabilized. The other great unresolved problem is the absence of proper global governance. The lack of agreement among the United Nations Security Council’s five permanent members is exacerbating humanitarian catastrophes in countries like Syria – not to mention allowing global warming to proceed largely unhindered. But, in contrast to the Chinese conundrum, which will come to a head in the next few years, the absence of global governance may continue indefinitely.

Monday, December 30, 2013

In a letter to the Open Government Partnership, the inventor of the web, Sir Tim Berners-Lee, who collaborated with more than 100 free speech groups and leading activists condemns the hypocrisy of member nations of Open Government Partnership in signing up to an organisation which aims to preserve freedom while at the same time running one of the largest surveillance networks the world has ever seen. The organisations that have signed up include Oxfam, Privacy International and the Open Rights Group, and the individuals include Satbir Singh of the Commonwealth Human Rights Initiative and Indian social activist Aruna Roy. The letter calls on member governments to overhaul their privacy laws, protect whistleblowers and increase the transparency around their surveillance mechanisms.
"We join other civil society organisations, human rights groups, academics and ordinary citizens in expressing our grave concern over allegations that governments around the world, including many OGP members, have been routinely intercepting and retaining the private communications of entire populations, in secret, without particularised warrants and with little or no meaningful oversight," the letter states.
"These practices erode the checks and balances on which accountability depends, and have a deeply chilling effect on freedom of expression, information and association, without which the ideals of open government have no meaning."
The letter underscores the difficulty the UK and USA have had in maintaining that countries like China and Iran should ease restrictions on the internet in the face of revelations from the NSA files that they themselves are intercepting private communications.
"Laws to limit the state’s power to spy on its citizens are fundamental to democracy’s checks and balances. But these laws are outdated," said Anne Jellema, the chief executive of the World Wide Web Foundation, which was founded by Berners-Lee to promote a free internet.
"With digital technologies making it trivially easy to collect and store billions of pieces of data on entire populations, and with public interest whistleblowers receiving little protection, the whole system of checks and balances on state power is being pushed dangerously close to breaking point," Jellema continued. "We are calling for an urgent public debate to review and strengthen the safeguards that will keep our societies open".
The Open Government Partnership was formed in 2011 to aid reformers committed to making their governments more accountable, open and responsive to citizens. The UK and USA were two of the first countries to join, and the partnership has since grown to include 62 nations from Australia to Mongolia.

Wednesday, September 25, 2013

About deceit, lies and bribes received by the Romanian Governments and Authorities !!!

Wednesday, July 31, 2013

The IMF has wound up its latest inspection of the US economy - the so-called Article IV consultation - and has messages for the Fed and the government. The International Monetary Fund's executive board says deficit reduction has been "excessively rapid" and at the same time stresses that in order to minimise financial market volatility, the Federal Reserve must be clear about when and how it will exit its loose monetary policy stance. The assessment is available here. Highlights (with our own bolding up of key phrases, not the IMF's) from the Executive Board Assessment: Executive Directors welcomed the improvement in the underlying conditions of the U.S. economy, which bodes well for a gradual acceleration of growth, while noting that the balance of risks to the outlook remains tilted to the downside. Directors generally concurred that the fiscal deficit reduction in 2013 is excessively rapid, and that the automatic spending cuts (“the sequester”) not only reduce growth in the short term but could also lower medium-term potential growth. They stressed the importance of adopting a comprehensive and back-loaded medium-term plan entailing lower growth in entitlement spending and higher revenues. Together with a slower pace of deficit reduction in the short run, this fiscal strategy would help sustain global growth, place the U.S. fiscal position on a sustainable path over the medium term, and support the reduction of global imbalances... Directors broadly agreed that accommodative monetary policy continues to provide essential support to the recovery, but cautioned that its financial stability implications should be carefully assessed... Directors noted that the Federal Reserve has a range of tools to manage the normalization of monetary policy, but that there are significant challenges involved in unwinding accommodation, including risks of market reactions leading to excessive interest rate volatility that could have adverse global implications. They stressed that effective communication on the exit strategy and a careful calibration of its timing will be critical for reducing these risks.

Thursday, June 27, 2013

Fiat money ...and than some...

The global economy cannot operate without fiat money  - it is too big. To be successful a thriving economy needs an expanding money supply. Unfortunately our expanding money supply has been achieved by commercial banks creating new money as a debt to them. Their greed ensured it got out of hand and now they are destroying money as quickly as they can "shrink their balance sheets" as they call it. It should never have been allowed to happen. The new money needed by thriving economies should have come in as debt free money created by the BOE/Treasury to pay government expenditure on normal outlays or on new infrastructure - or, of course as lower taxes. Just as with money created by the banks as debt, too much will cause inflation and too little will result in recession, deflation and ongoing depression - which is where we are now. But at least money created as cash does not have that debt to service. It is the creation of money as debt that has got us into the mess we are in. Ironically it is also the creation of money as debt that has prevented the excess that has been created causing hyper inflation. I'm afraid the banks are not fit for purpose; they are self programmed to cause Boom and Bust...  Well, the current experiment with fiat money has certainly demonstrated that central banks cannot be trusted to run the system.  That aside, the principle of fiat money only has peripheral connection with the size of the money supply - and will always tend towards fraud. There is no reason not to have an asset-correlated money supply assuring that money supply only increases in line with productivity.  Anyway, it appears that Stein's law applied to consumer leveraging has finally kicked in so the necessary correction may well happen on its own and the central bankster-induced super-bubble burst. Let's see what the Keynesians have to say as the consumer deleveraging gains pace...

Monday, June 24, 2013

Click links ...very interesting ...

The most remarkable story of the day comes from Ireland. Secret tapes released this morning give the clearest signal yet that senior bankers at Anglo Irish Bank deliberately tricked the Irish government into a rescue deal on 2008.
The recordings, released by the Irish Independent today, show John Bowe and Peter Fitzgerald discussing their request for €7bn of emergency funding to keep Anglo Irish running, once the financial crisis struck. The final bill was €30bn, helping to precipitate Ireland's own bailout. There have long been suspicions that Anglo's management knew the full scale of the crisis and hid it from the Dublin government, who fatefully decided to pick up the bill on the taxpayers' behalf. Our correspondent in Ireland, Henry McDonald, explains: On tape Fitzgerald asks Bowe how did he arrive at the figure of €7bn to which the latter replies: "Just as Drummer [the then Anglo Irish Bank CEO David Drumm now in exile and disgrace in Boston] would say, 'picked it out my arse.'" The conversation also tends to back up the view that Anglo Irish bankers knew that €7bn would never be enough to save the bank but once they had hoodwinked the Dublin government the taxpayer would keep picking up the tab. In their exchange Bowe says: "Yeah, and that number is seven, but the reality is that actually we need more than that. But you know the strategy here is you pull them in, you get them to write a big cheque and they have to keep, they have to have support their money, you know."
And you can listen to the recordings on the Irish Independent's site (the third recording, 'strategy', is the real humdinger).

Wednesday, June 19, 2013

European Commission President Jose Manuel Barroso has criticized French moves to protect EU cultural industries as "reactionary" ahead of upcoming talks on a massive EU free trade agreement with the United States. European Commission head Jose Manuel Barroso has criticised French moves to protect Europe's film and cultural industries as "reactionary" ahead of upcoming negotiations on a major EU free trade agreement with the United States.   "Some say they belong to the left, but in fact they are culturally extremely reactionary," the Commission president said in an interview with the "International Herald Tribune" published on Monday.    Without specifically naming France, Barroso said that those fearful of a US cultural invasion of Europe "have an anti-cultural agenda".   Such fears indicate "no understanding of the benefits that globalization brings, also from a cultural point of view," he added.   Hollande said on Monday that he found Barroso’s remarks “hard to believe”.   The unusually harsh criticism from Barroso followed marathon talks Friday between the bloc's 27 trade ministers to agree on the terms of the Commission's mandate to negotiate the EU-US trade agreement, which would be the biggest free trade deal in the world.  France insisted on a cultural exception that would exclude the audiovisual sector from the negotiations. After 13 hours of talks, a compromise was reached agreeing to French demands while stating that the Commission could review the issue later if necessary.  "I am going to listen to what my American friends say on this [and] then we can ... ask for additional mandates" if needed, said EU Trade Commissioner Karel De Gucht.  EU officials have repeatedly warned that excluding any economic sector could hand the US an early bargaining chip in what promise to be tough negotiations. Washington says no areas should be excluded from the talks.  Ministers were under intense pressure to agree to the guidelines on which the European Commission will negotiate the EU-US Transatlantic Trade and Investment Partnership (TTIP) so the talks could be formally launched at the G8 meeting starting on Monday. If a deal is struck, it will establish the world's largest free trade arrangement, with bilateral trade in goods last year worth some €500 billion ($670 billion) and another €280 billion in services. Trillions of euros flow between the bloc and the United States in annual investment. The EU says a trade deal would add some €119 billion euros to the EU economy a year and would result in a €95 billion annual boon for the United States.

Tuesday, May 7, 2013

A revised European Bathing Water Directive which is due to come into force in 2015 will require water to be twice as clean to achieve the highest standard – a rating of Excellent. Tourism bosses fear that the new rules could have a big impact on the communities around any beaches that fail to make the grade.
They are calling for a more flexible approach that would allow them to provide daily updates on the water quality meaning that they would only have to close the beaches to bathers on those days when the pollution reaches hazardous levels.  Malcolm Bell, the head of Visit Cornwall, said: “We are going to face a challenge to explain to people that things have not got worse – it is just that the hurdle has got higher.  “If a beach is on the new borderline, it doesn’t mean it will be borderline all the time.  “Sometimes it will be beautiful and other times there will be problems, so we want to be able to put up signs on those incidents but be able to take them down when it is more than safe.”  Jonathan Ponting, principal environment planning officer at the Environment Agency, said work was under way to improve the water quality in those areas at risk.  He said: “The vast majority of our beaches pass the current standards and they have seen a massive improvement over the past 20 years, but we are moving to a system that uses much tighter standards than the current ones that we report to.  “Tourism is a massive part of our economy in some of these areas and there is no doubt that if some of these beaches do have signs advising against bathing it could be damaging for the economies in those areas. “The Environment Agency has been working to get as many of those beaches as possible to meet those standards.”  Temperatures are expected to rise tomorrow to just shy of the hottest seen this year, with the South East expected to get up to 73.4F (23C), about the same as is forecast for the south of France.
 

Saturday, April 27, 2013


"José Manuel Barroso, the European commission president, said on Tuesday this week the European "dream" was under threat from a "resurgence of populism and nationalism" across the EU."
Correction:
José Manuel Barroso, the UNELECTED president of the UNELECTED European commission, said on Tuesday this week the European "dream" was under threat from a "resurgence of populism and nationalism" across the EU.
Remember "citizen": democracy is nationalism and politicians who serve the people who elected them are "populist".
Orwell and Kafka must be turning in their graves.Public confidence in the European Union has fallen to historically low levels in the six biggest EU countries, raising fundamental questions about its democratic legitimacy more than three years into the union's worst ever crisis, new data shows.
After financial, currency and debt crises, wrenching budget and spending cuts, rich nations' bailouts of the poor, and surrenders of sovereign powers over policymaking to international technocrats, Euroscepticism is soaring to a degree that is likely to feed populist anti-EU politics and frustrate European leaders' efforts to arrest the collapse in support for their project.
Figures from Eurobarometer, the EU's polling organization, analyzed by the European Council on Foreign Relations (ECFR), a think-tank, show a vertiginous decline in trust in the EU in countries such as Spain, Germany and Italy that are historically very pro-European.
The six countries surveyed – Germany, France, Britain, Italy, Spain, and Poland – are the EU's biggest, jointly making up more than two out of three EU citizens or around 350 million of the EU's 500 million population. The findings, published exclusively in the Guardian in Britain and in collaboration with other leading newspapers in the other five countries, represent a nightmare for Europe's leaders, whether in the wealthy north or in the bailout-battered south, suggesting a much bigger crisis of political and democratic legitimacy.
The most dramatic fall in faith in the EU has occurred in Spain, where the banking and housing market collapse, eurozone bailout and runaway unemployment have combined to produce 72% "tending not to trust" the EU, with only 20% "tending to trust".
The data compares trust and mistrust in the EU at the end of last year with levels in 2007, before the financial crisis, to reveal a precipitate fall in support for the EU of the kind that is common in Britain but is much more rarely seen on the continent.
In Spain, trust in the EU fell from 65% to 20% over the five-year period while mistrust soared to 72% from 23%. The EU could and should have been so much more than it currently is. Trouble with the EU we have is the lack of democracy. Votes against expansions are ignored or re-run (think of the EU Constitution that became the Lisbon Treaty instead). Only Poland is still positive - just how many billions of Euros have been transferred to Poland for them to be positive?


Tuesday, April 23, 2013

The Eurozone is in recession because it is an exporting bloc and its' key markets (not least countries like Britain) are just not buying. You would hardly know it from reading the British press but the Eurozone as a whole still has a TRADE SURPLUS with the rest of the world. When was the last time that Britain ran a trade surplus? The 1980's? Yet this article (and hundreds like it) paint a picture of a frustrated UK economy, raring to go, just waiting for an enfeebled Eurozone to buck its ideas up. It’s back-to-front new-speak garbage - the Eurozone will be out of recession the moment its customer countries (like Britain) start buying again.
You can’t suddenly decide to have an export-led economy when a crisis hits and it’s clear that your financial and services sectors are a parasitic dud or that running an economy based on bumping house prices and buying from each other is a daft Ponzi scheme. Manufacturing reputations take decades to establish and Britain comprehensively trashed its reputation in the 60’s, 70’s and 80’s with crap products and poor leadership.
The entire world economy is in trouble right now and every country is hoping that ‘exporting’ will dig it out of a hole. That’s why Japan has just pledged to rubbish the value of its currency and invite inflation in through the front door. Britain trashed the value of the pound against the Euro as soon as the crisis hit, but as a net importer, it has only served to stoke the deficit.
There is a bigger picture here which has a lot to do with global energy availability (don't believe the recent 'revolutionary' shale hype, it's yet more PR garbage), landfill consumerism and environmental awareness. We can see that with even a relatively modest drop in demand, the world economy comes crashing to a halt. Yet for the sake of the environment, demand for all kinds of useless, pointless consumer crap needs to collapse still further…much, much further.
The ‘return to growth’ mantra is getting boring and showing up humanity as an uncreative, unimaginative race of lemmings. Actually, on second thoughts, I credit lemmings with more sense...
Dixon at Commerzbank says politicians will have to give up on the idea of a quick fix: "There's been a realization among policymakers that we're not going to get the typical V-shaped recovery, and the sooner we all get used to that, the better. You get seven fat years and then you get seven lean years, as the Bible says: it's not a new phenomenon."
Is that the Gideon's Bible?


Sunday, January 27, 2013

[image]MADRID—Spain's central bank said a recession in the euro zone's fourth-largest economy deepened slightly in the final quarter of last year, but it said austerity cuts are bringing the country's runaway budget deficit under control. In the first estimate of fourth-quarter economic performance, the Bank of Spain said the economy contracted 1.7% compared with the same period a year earlier and likely contracted 0.6% from the previous quarter. In the third quarter, the economy had shrunk 0.3% from the previous quarter, and 1.6% on an annual basis. The Bank of Spain said gross domestic product fell just 1.3% in the whole of 2012, which was less than the 1.5% contraction anticipated by the government and a sign that strict budget cuts across the board are having a less detrimental effect than some feared. It cautioned that continuing cuts could still weigh on an economy already hurt by efforts to trim debt. "This budget consolidation effort has had a net contracting effect on activity throughout the year, especially in the last few months," the central bank said. This year, meeting even stricter austerity targets "will require an additional, very ambitious fiscal effort by the central and regional governments." Those comments are in line with heightened concerns by local and foreign observers that accelerated austerity measures promoted by the European Union are self-defeating, as a collapse in economic activity makes it harder to boost tax revenue, putting pressure on budget deficits. Earlier this month, the International Monetary Fund said it revising its metrics for how quickly governments should cut their budgets and the IMF's top economist Olivier Blanchard made the case that Europe's fiscal tightening has been too severe. "We do need to reduce the deficit, but the EU should be more flexible about the deadlines," said Josep Comajuncosa, an economics professor at Spain's ESADE business school. "Requiring a fast and drastic reduction of the public deficit could backfire. The deficit target should be pushed back one or two years." The central bank said tax revenue increases in recent months will make it easier for the government to get closer to its target of lowering the 2012 budget deficit to 6.3% of GDP from 9% in 2011. The target for this year is 4.5% of GDP. The latest data available, the central bank said, indicates tax revenue picked up in recent months due to higher value-added and corporate tax receipts, while expenses fell after the government suspended an extra monthly payment for civil servants and decided not to adjust pensions for inflation—two measures which eroded popular support for Prime Minister Mariano Rajoy. Spain's statistics institute is due to release an official preliminary estimate of fourth-quarter GDP Jan. 30. Full data on Spain's 2012 budget deficit, including for regional governments, will likely be released late February.(sursa : WSJ)

Friday, November 2, 2012

ECB president Mario Draghi has expressed strong support for a "currency commissioner", saying it would strengthen the euro.Spanish prime minister Mariano Rajoy has criticised the suggestion that eurozone countries should surrender sovereignty and agree to the creation of a European Commissioner with new powers over national budgets of euro countries.  Speaking at a press conference with Mario Monti, Italy's leader, in Madrid, Rajoy argued that this was only acceptable as part of a full package of closer integration.
Rajoy said:
This is an idea, that considered on its own, I personally don't like. As part of a variety of measures for fiscal union, it could be considered.
The Bank of Israel has surprised the markets by cutting interest rates by a quarter-point, to 2%.
The Bank of Israel made the move after concluding that Israel's economy could struggle in early 2013 – and cited the eurozone crisis as a key factor...In a statement, it said:
Against the background of the debt crisis in Europe, the level of economic risk from around the world remains high, and with it the concerns over negative effects on the local economy.
It's the latest in a string of rate cuts by central banks around the globe, as concern has grown about the world economy.
None of the economists surveyed by Bloomberg had expected a cut, and the move has sent the shekel falling against the dollar.
Israeli shekel drops as central bank unexpectedly lops 25 BP off interest rate, taking it to 2%.

Tuesday, October 30, 2012

The Greek government will put labour market reforms proposed by foreign lenders to a vote in parliament next week, as a series of crunch meetings takes place next week.
The parliament will vote, despite a refusal to back the proposals by a junior coalition partner's refusal to back them, the finance minister said on Saturday. The 2102 budget law, which will bring a range of new austerity measure into the statute books, has been demanded by foreign creditors, will be presented on Wednesday.
A separate bill with new labour market reforms will be put to the vote later in the week, Yannis Stournaras, Greece’s finance minister said.
Greece is expected to run out of money in the middle of November and the government needs to get through a series of austerity measures to unlock the next tranche of aid.  The Democratic Left Party, which has refused to back the reforms, has 16 deputies in the parliament, with the government having a 176 majority. This means the law is expected to pass, but it shows fracture lines building within the ruling coalition.
On Wednesday eurozone finance ministers will hold a conference call on Greece, two days after Monday's Euro Working Group where senior eurozone officials examine the heavily indebted country's progress in meeting the required cost savings required by the Eurogroup.

Saturday, October 20, 2012


European leaders early Friday agreed to have a new supervisor for euro-zone banks up and running next year, a step that will pave the way for the bloc's bailout fund to pump capital directly into banks throughout the single-currency area......
Friday's announcement is a disappointment for some officials at the European Commission, the EU's executive arm, who had hoped to have the supervisor operational at the start of 2013.
The leaders also discussed plans for a common budget for the 17 euro-zone nations that could be used to absorb economic shocks impacting one part of the euro zone but not others. But José Manuel Barroso, the commission president, said: "This is something for the medium and longer term.

The man who died in Greece :

The death came as protesters lobbed flares, petrol bombs and chunks of marble at lines of riot police, who responded with tear gas and stun grenades, in confrontations which have become all too familiar in the Greek capital over the last three years.
The clashes erupted in and around Syntagma Square, in front of parliament, during protests against a new wave of austerity cuts that the government plans to introduce in November.
"A 65-year-old man was taken to hospital where efforts to revive him failed," a health ministry official told the AFP news agency.
One report said the man had been found dead in Syntagma Square while another said he was found on a bench several hundred yards from the violence.

Wednesday, September 26, 2012

The EU is dead in the water....

The EU is dead in the water already, the Euro and Eurozone even more so. Or perhaps you think the whole mad caboodle is a roaring success, and on an ever-upwards curve? Who cares when it finally unravels - it will, by its nature, never be a success in the future, because its structure and aims are stuck in the past in a fast-changing world. UKIP were top in the EU elections, and have gained significant success in the polls ever since the last General Election, so much so that they are challenging the Limp Dicks for third place. Most Conservatives agree privately with UKIP, and significant numbers have deserted to UKIP, so much so that the Conservatives cannot possibly win the next General Election without UKIP aid or without adopting UKIP policies in a significant fashion. There's a message for you there, chum. There is a great irony here that the steps taken in order to prevent a deflationary collapse could mean there is an even greater "danger" if we do start to recover. Put simply, the debt burden of the major economies are so large that they cannot afford to pay higher rates. The central banks, have massive rate risk through the bonds they are holding. What we are trying to do is create via financial alchemy a solution to the problem that the debtors cannot pay the creditors, but a restructuring is politically impossible as well as a mortal threat to undercapitalized banks. Therefore, we hope that we can somehow flood the world with liquidity, to inflate only specific assets (property, equities) but not others (food and energy). Because this is "unnatural" we see efforts made to manipulate markets (officially sanctioned fudges of housing data, outright equity market intervention, and rumors of oil releases) so the markets just get weirder every day. The question is, whether we are happy to live in a world of extreme central planning, which seems to benefit the ultra wealthy the most or would be prefer to stop the charade, allow the markets to clear, accept the reality that we are not as rich as we thought, but move on.

Sunday, August 5, 2012

TRUTH IS : Private sector activity shrank for the tenth time in 11 months

Who on earth is investing to raise these stock markets so high? If I were Warren Buffet I would say this is a typical bubble Companies are not making real profits Banks aren't either so who is doing the investing????...Bond yields are down, oil prices high, USA crops are devastated by drought, housing in USA is still very much wasted. So are "the powers that be" simply doing what analysts do talking up the benefits of share ownership until even "my mate Joe Blw" decides that investing in stocks beats keeping his money under the mattresse ? I have had it with markets banks and politicians lies and deceits. I am closing all my banking accounts and simply paying in earwigs from now on.We are living in the Alice of Wonderland World. The more bad economic data we gets, the more the worlds stock markets rise..... Hopes that Europe’s leaders will act decisively drowned out weak data showing the eurozone endured another torrid month in July. Private sector activity shrank for the tenth time in 11 months and pointed to a 0.6pc rate of quarterly contraction, according to the purchasing managers index. Offsetting that was the strong US jobs data. July saw 163,000 people find work in the world’s largest economy, beating forecasts of 100,000. The sense of relief was sharpened because almost all the recent US data have pointed to a deterioration since the first quarter of the year. “It will alleviate fears that the US might be tipping back into recession,” said Nigel Gault, an economist at IHS Global Insight. The utterly repellent EU freak show stumbles from crisis to crisis, a crisis which conveniently gives the bureaucrats an excuse to force member countries into a fiscal union with budget control being handed over to Brussels, effectively crushing the last breath of democracy of the nation state in favor of an EU super state, but the light of freedom, sovereignty, cultural identity and the ability to decide one owns destiny will not be extinguished whilst the euro sceptics still have a voice. The common market worked well, that is where Europe should be heading not more Europe.....However : While U.S. employers hired an additional 163,000 "human resources" they also sacked an additional 195,000 "human resources" last month, including a decrease of 228k full-time jobs which was only partially offset by a 31k rise in part-time jobs (defined as 1 to 34 hrs/wk). Furthermore, a new group of 199,000 Americans joined the "Working-Age" pool last month and will need jobs as well. Not only is the U.S. economy in such a severe situation as reported, it is, in fact, in a worse one. Currently some 87 million Americans, or about 36% of the working-age population of the U.S., are no longer even looking for work and are considered "out of the labor force." If it were not for workers who dropped out of the labor force, the real UE rate would be far north of 11%. All of this MSM "rah-rah" reporting and "growth and recovery" hopium smoking needs a reality check.

Thursday, July 5, 2012

Over in Germany, cracks are starting to widen in the Angela Merkel's government. In the magazine Stern (in German), Horst Seehofer – who is head of the CSU, the Bavarian partner of Merkel's CDU party – sharply criticized decisions taken at the recent eurozone summit and threatened to break the coalition if further financial commitments were made to crisis-hit countries. Greek Socialist Pasok leader Evangelos Venizelos said today that he hoped Greece would be able to benefit from a European Union concession – already extended to Spain, Ireland and possibly Italy – allowing the use of EU rescue funding for the direct recapitalization of banks.---- Venizelos said:....I would like to hope that this will apply to Cyprus, Portugal and Greece. This would help reduce (Greek) debt. If it were to apply to Greece, it would reduce the country's debt, now somewhere above €330bn, by as much as €50bn, which has been earmarked for the country's banks as part of an earlier debt restructuring deal. The Pasok chief also presented a 10-point plan for Greece, which includes honouring the country's commitment to the country's creditors but extending the adjustment period by three years.,,,,Over to Athens, where Horst Reichenbach, the head of the EU taskforce created to speed up Greece's recovery using EU support funds, said Greece must prioritize paying out arrears it has racked up with suppliers to get funds flowing again to cash-strapped businesses. The EU task force, which is working to help Greece reform its bloated public sector, said the lack of financing risked undermining any progress achieved through reforms. Elsewhere ekathimerini.com reports that the government is ready to negotiate with the troika of the ECB, the EU and the IMF. It cites a government spokesman who said:We will present data that cannot be doubted, which will prove the dead-end we have been led to by the current policies, especially with regard to the recession and unemployment. Using this data as our weapon and presenting our alternative proposals, we believe that we will succeed in a new path being approved.We are making every effort to ensure there won't be any more sacrifices or job losses. The Greek government is expected to present its policy program in parliament on Thursday or Friday. Separately, the labor institute has warned that the actual number of unemployed Greeks, including the long-term jobless, will reach 1.6m, or close to 30% by the end of the year, rather than the 1.48m originally expected. The gloomy forecast comes a day after eurozone data showed that more than one in two Greek young people are already out of work.

Wednesday, June 13, 2012

Current EU behavior isn't going to achieve what either side wants.

Even if Greece sticks to its reform path, the country will need fresh money this summer, according to Die Zeit's information. If a state insolvency is to be avoided, then the Europeans will need to jump in again. The Bundestag (lower house of parliament) may possibly have to discuss a third Greek package again. A double-digit billion euro amount is being discussed. Greece has already had two bailouts: €110bn in May 2010 and €130bn this year. Worryingly for Greece, the article suggests that the new rescue would come with further economic targets to meet. Greek have been withdrawing €800m a day from the nation's banks, reports CNBC, and stocking up on pasta and canned goods ahead of the weekend's elections. CNBC also claims that a host of biased and widely contradictory polls are being leaked - polls are not allowed this close to the election under Greek law. One apparently puts Syriza way ahead. But a "reputable pollster" told CNBC that this was "nonsense". The polls show that the picture has not changed much since the last polls were published. Parties may be leaking these numbers on purpose to boost their standing....

The EU method of economic reform is like sending in the panzers to stiffen up their army. The ultimate aim is undoubtedly what both sides want, but heaping economic penalties on the poorer members of Greek society will create misery and ultimately lead to political extremism. Either way it appears that the EU has no solution, and no ability to come to one. Current EU behavior isn't going to achieve what either side wants.

Friday, May 4, 2012

Spain reintroduced checks at the border with France ahead of the meeting, temporarily suspending the Schengen agreement. So far reports say 17 arrests have been made at the border and 43 people denied entrance because of previous police records involving "violent protest". Authorities want to avoid clashes staged by "anticapitalist" protestors who may travel from abroad for the event. However, students from Barcelona University are staging a "strike" today and have taken to the streets to protest education cuts announced by Mariano Rajoy's conservative government last month. Streets have been blocked by the demo in the centre of the city. Some 8,000 police are on the streets of Barcelona during the ECB meeting to prevent trouble. Snipers visible on rooftops, armoured vehicles and riot police at the ready and helicopters flying overhead. The sunny city is on lockdown with some twitter uses dubbing the Catalan capital "carcelona" - carcel means prison in Spanish. No signs of any trouble as yet.... Mr Draghi's predecessor, Jean-Claude Trichet (below) has told German TV that Europe is "only halfway" through the crisis. In an interview with he said: Hard work has been done, but we are only halfway, and a lot still has to be done [...] As the leader of the Governing Council which has taken all those difficult decisions, yes they are doing a very good job... Mario Draghi will tonight hold a private meeting with Prime Minister Mariano Rajoy in which the Spanish leader is expected to ask for affirmation that the ECB can be relied on to provide liquidity boosts for Spain’s ailing banks. Mr Draghi’s had some positive things to say about Spain. In the press conference he recognised that Spain had “carried out significant reforms in a short time” though insisted that “perseverance was needed to push through more structural reforms” especially in the banking sector. ... The online edition of Spain’s financial newspaper Expansion chose to highlight his comments on further reforms. “Draghi calls for more forceful measures: ‘If you have a problem with the banks, confront it’” said the headline. Overall the paper said there were no surprises in decisions taken during by the ECB governing council.

Tuesday, April 17, 2012

The euro has fallen against most major currencies this morning, as euro zone debt fears loom over the foreign exchange markets. Against the dollar, the euro slipped below the $1.30 mark for the first time since mid-February, and also hit a two month low against the yen. And while the euro slides, Spanish bonds are also being hit. The yield (effectively the interest rate) on the 10-year Spanish bond has jumped over the 6% mark this morning, to 6.09% at pixel time. Italian bond yields have also risen, with the 10-year yield nudging 5.62%. German bonds, through, are in demand, driving down the yield on the 10-year bund to a new record low of just 1.628%. These are all signs that the crisis is heating up again. As Brenda Kelly, senior market strategist at CMC Markets, comments: The pressure on its bond yields and over-dependence on ECB funding is adding to the mounting evidence that Spain will in fact need a bailout. This has re ignited the fears that should this occur, that the Euro zone will be courting disaster with what is deemed by the markets an insufficient firewall, particularly if Italy follows suit. It's a pretty quiet agenda today. We get the latest euro zone trade data this morning, and the details of the European Central Bank's bond purchases this afternoon. US retail sales data could move the markets this afternoon: In the bond markets, France and the Netherlands are holding debt sales this morning. And the announcement of the next leader of the World Bank should also come this afternoon. You need to sell a lot of Euro denominated debt, easier the cheaper the Euro. You need to create millions of jobs for unemployed Europeans, easier the cheaper the Euro. You need to pay back millions of trillions of Euro's and you don't have them, well who invented the printing press?