Showing posts with label investments. Show all posts
Showing posts with label investments. Show all posts

Wednesday, January 13, 2016

Explosive job growth in the oil and gas sector propped up the U.S. economy for several years in the wake of the recession, as the fracking revolution put American energy workers back to work.
But 2015 was the year that job gains in the energy sector came to a screeching halt as rock-bottom oil prices triggered layoffs of more than 258,000 workers globally, according to a comprehensive analysis by industry consultant Graves & Co. And the energy business is poised to endure a fresh round of job cuts and bankruptcies in early 2016, analysts say.  The number of active oil and gas rigs in the U.S. fell 61% to 698 as of Dec. 31, compared to a year earlier, according to Baker Hughes Rig Counts....Oil companies in Texas have endured revenue losses of up to 70% over the last year, he says.  Dan Heckman, national investment consultant for U.S. Bank Wealth Management, said he expects to see a fresh round of layoffs, production cuts and bankruptcies in the oil and gas business in early 2016.  The current U.S. unemployment rate for the oil, gas and mining sector is 8.5%, but could top 10% by February, about double the overall jobless rate, Heckman projected.   Oil production leader Saudi Arabia has refused to slash output to bolster prices, and U.S. producers have kept wells flowing to pay off investments ordered in the 2000s when new fracking technology triggered a spike in American energy production.  "Many of these companies are in negative cash flow, and that’s not a sustainable dynamic," Heckman said.  It’s a game of chicken, with energy analysts closely watching to see where production cuts take place in an effort to boost prices.  Projections for a prolonged period of low oil prices provide little hope for a quick rebound. Most analysts believe oil prices will stabilize in 2016, but probably won’t rise much until the second half of the year, barring unexpected geopolitical instability.  It’s a sharp reversal of fortunes for an industry that was celebrated for the economic windfall it provided for oil-rich states such as Texas, North Dakota and Pennsylvania as other areas of the economy remained soft.  The number of jobs at oil and natural gas companies rose 40% from the start of 2007 through the end of 2012, even as total U.S. private-sector employment rose only 1%, according to the U.S. Energy Information Administration.

Wednesday, December 17, 2014

 
Clashes have erupted in the capital of Greece during protests marking six years since police shot dead an unarmed teenager.  At least 5,000 demonstrators marched in Athens on Saturday. Some attacked shops and hurled petrol bombs at riot police.  Police officers used tear gas and a water cannon to disperse protesters.  The demonstrators had been marking the anniversary of 15-year-old Alexis Grigoropoulos' death. He was shot by an officer who has since been jailed.  Mr Grigoropoulos' killing on 6 December 2008 sparked violent riots across Greece, with cars being set alight and shops looted in a number of cities.  Clashes have also broken out on previous anniversaries of his death.  On Saturday, anti-establishment protesters attacked banks and damaged shops and bus stops.
At one point, demonstrators looted a clothes shop and set fire to the merchandise in the street, the Associated Press news agency reported.  According to Reuters, police said they detained close to 100 protesters.  Clashes primarily took place in Athen's Exarchia neighborhood, but violence was also reported in Thessaloniki, in northern Greece.   No injuries were reported in either city.
The ECB is already buying asset-backed securities (bundles of bonds) in an attempt to stimulate lending. This of course will not lead to a credit expansion as all it accomplishes is to add to bank reserves and banks do not lend bank reserves to commercial clients, ever.  QE has no measurable impact on aggregate demand and a shortfall in aggregate demand is the problem with the EMU economies. This has been beyond dispute for over 7 years now in some nations and yet nothing has been done to address this shortfall which is manifested in massive unemployment, massive underemployment, increased poverty, social breakdown political instability.
The mindless devotion to monetary policy actions has proven to be ineffective across both time and geography in stimulating economic activity, yet the Troika will not accept reality.
Expansionary fiscal policies directed at employment rich activities such as health care, education, infrastructure and the advancement of the public good is what is called for.

Thursday, July 17, 2014

A mounting crisis at one of Portugal’s biggest banks and signs of a deepening economic slowdown in Europe have sent tremors through financial markets, triggering a sharp fall on European bourses and a flight to safety across the world.   Portugal’s regulator suspended trading of Banco Espirito Santo after its share price crashed 17pc in Lisbon, reviving worries about the underlying health of Europe’s banks. The STOXX index of European lenders fell to its lowest this year following a bank run in Bulgaria and a profits shock from Austria's Erste Bank. The index is down 11pc since early June.   Yields on Portugal’s 10-year debt surged 20 basis points on Thursday to 3.95pc, with contagion spreading to Greek, Spanish and Italian debt.  Before I board for Budapest! I remarked yesterday about the closing FDI window through worries about €Z stability - highlighted by the Holy Ghost in Portugal but already with knock-ons in Greece, Spain, Slovenia and Bulgaria-Romania.  I mentioned the Indian budget/plan that would normally, because of its cautiousness, propelled some FDI into a stable €Z. Money the €Z desperately needs to catalyse growth.  Well another small nail in the €Z FDI coffin today http://www.thetimes.co.uk/tto/... - as the BRICS set up their own development bank as a counter to Laggard's arrogant stupidity in setting up an €MF and an IMF. Now the BRIC money (reserves not borrowings) will be going to their bank not into the last resort coffers of the €MF.
No FDI, a totally impotent ECB, like water on stone... Zero Hedge is always an interesting read at times like these. Only if they crash, and get another central bank asset bailout, like in 2008. The amount of imaginary 'money' the central banks can create is infinite. At least, until it becomes worthless during hyperinflation. I think that day is closer than most people realize. It won't be caused by banks, though. It will be a government response to the effects of peak oil. As the cost to go after what oil remains gets too high, governments will start pumping out money to try and prop up the economy, as it begins to shrink from not enough affordable oil being available. They will create euros & dollars by the trillions, and shove them into the economy to try to boost economic activity. It will work for a while. Then the inflation will hit, and accelerate very quickly. Anything they do to try and rein in the inflation, will cause an instant global financial collapse. The numbers in Pritchard's last oil article show how close we are to peak oil. He is dreaming that all that energy can be replaced in transportation, with any other energy source, in time to prevent the apocalypse. It is 40 years too late to get that done in the time we have left. Transportation is the weak link in the global economic system that will prevent Pritchard's energy fantasy from being realized. Oil products move over 90% of everything that moves. Today there's a fascinating article about how state-controlled Chinese banks have been conniving with Chinese oligarchs to park their ill-gotten gains in foreign countries, notably America, in contravention of the tight capital controls in that country,
The market for colossally expensive US developments has been booming thanks to this tsunami of illegal money.
The purpose of this official winking-at illegality has been to minimize inflationary pressure in China.
Now that the cat's out of the bag, we can expect the Chinese Government to cover their involvement by actually enforcing the capital control regulations.
The result will be a steep rise in Chinese inflation and a collapse in the market for premium US properties.
The rise in Chinese inflation will require a raising of interest rates and a reining-in of economic activity, with wider consequences for the world.  We are living through times of extreme financial froth and danger...It very much looks like another Euro crisis is in the offing.How much longer can they
keep this decrepit creaky edifice known as the EMU standing. Another cut in the  slow death of a 1000 cuts.

Thursday, July 10, 2014

"Let's go to the bar," the foreign minister suggests. It is shortly after 10 p.m. and Federica Mogherini, with her long blond hair and a discreet pearl necklace, strides purposefully ahead, choosing a table at the front-left. A waiter rushes over. What would she like? "Nothing," the minister says pleasantly. Apologetically, she explains she prefers being "sober."  A married mother of two, Mogherini has been at the pinnacle of Italian diplomacy since February. Last week, her name was even thrown into the mix as a possible successor to EU foreign policy chief Catherine Ashton.   At 41, Mogherini is two years older than Prime Minister Matteo Renzi, but of all her predecessors in the Foreign Ministry in Rome, only Mussolini's son-in-law Count Galeazzo Ciano was younger at the beginning of his term.   On this evening in Vienna, however, following a meeting of EU foreign ministers, she denies that her relative youth could be construed as a potential shortcoming. "You can't demand generational change on the one hand and expect 40 years of experience on the other," she says.   Young, feminine and focused on issues: Mogherini embodies much of what the restless reformer Renzi values as he tries to awaken Italian politics from its torpor. In the European Parliament elections in May, voters thanked Renzi by handing him a 40.8 percent result, apparently the reward for a government that is focused on change. Among Social Democrats in the EU Parliament, the Italians now represent the largest faction.  The generational gulf between the former bunga bunga premier Berlusconi and Renzi is striking. But so too is the contrast between Foreign Minister Mogherini and those who came before her, particularly her divergence with Emma Bonino, the 65-year-old who held the office until February. The human rights activist and chain-smoking ex-European commissioner was considered to be indispensable because of her experience -- at least in the eyes of Italian President Giorgio Napolitano.

Saturday, July 5, 2014

Dozens of depositors have withdrawn savings from Bulgaria's third biggest bank despite assurances from the government and the European Union that their money was safe after a similar run shut down another major lender last week.
Bulgarian authorities have arrested four people suspected of trying to destabilise the banking system in a concerted phone and internet campaign. However, the queues forming to withdraw cash have thrown a spotlight on weak economic governance in the EU's poorest state.
A credit line of 3.3bn levs (£1.3bn), requested by Bulgaria, was approved on Monday by the European commission. The EU executive, echoing the International Monetary Fund and economists, said the Bulgarian banking system was "well capitalised and has high levels of liquidity compared to its peers in other member states" of the 28-nation bloc.
President Rosen Plevneliev urged Bulgarians to keep faith with the banks in a national appeal on Sunday after emergency talks with political party leaders and central bank officials. "There is no cause or reason to give way to panic. There is no banking crisis, there is a crisis of trust and there is a criminal attack," he said.
Queues formed nevertheless outside branches of First Investment Bank, although they were smaller than on Friday. The lender says it has sufficient capital to meet clients' demand.
"I am here because I remember what happened nearly 20 years ago," said one woman aged about 60 who gave her name only as Gergana. She was referring to a financial crisis in 1996-7 which sparked hyperinflation and the collapse of 14 banks.
About two-thirds of Bulgaria's banks are now foreign-owned, in sharp contrast to the mid-1990s.
The crisis has rattled Bulgaria's fractious political class, forcing them to bury differences at a time of great political uncertainty and last week they agreed to hold an election on 5 October.
An interim government will be appointed on 6 August to steer Bulgaria until the election.


Tuesday, July 1, 2014

It used to be that the Council of Europe (i.e. the heads of national governments) elected the President without consideration of the wants of MEPs. During the Treaty of Lisbon in 2007 it was decided by all EU nations, including the UK, that that the President would instead be drawn from the party bloc with the most votes in the Euro elections, thus giving the President greater democratic legitimacy. This process came to be called the Spitzenkandidaat process and was implemented in 2009.
What the UK proposes is unilaterally vetoing a process they previously agreed to during the Treaty of Lisbon, essentially chucking their toys out of the pram because they don't like the candidates and ignoring the voting choice made by millions of continental Europeans.
Again I reiterate, the candidate, Junker, drawn from the party bloc who won the most votes in the Euro elections, the EPP. This is democracy, against which British politicians are acting against because they don't like the candidate.
Further, the UK Conservative party because they are part of an anti-EU party bloc have no spitzenkandidaat, they left the centre right bloc to join the Nazis and freaks on the fringe instead. A massive strategic error which they refuse to admit.
Just because the UK public did not understand the gravity of the Euro elections does not mean Junker is being voted in on an anti-democratic platform. Quite the opposite, the new system is more democratic than the old, where the Council of Europe simply decided who they wanted to become President with no influence from the EU Parliament, (the vehicle for direct public representation via MEPs).
Essentially the British government and British media have shot themselves in the foot: because the British public have not been given the information required to understand the new EU voting system the British public shunned the EU elections.
In doing so the British have reduced their voice in Europe and thus removed themselves from any real influence on the proceedings on electing a President, a blunder of quite epic proportions.
Nothing but a shambolic strategically inept joke, and yet the usual chorus of uninformed Brits will continue to rant about the EUSSR, socialists and Marxists when the real inhibitors of democracy are poncing about in Westminster and dining with right-wing media barons

Friday, April 11, 2014

Fears of a new dotcom crash gained momentum on Friday, wiping £20.2bn off the value of the FTSE 100.
The leading index tumbled 1.2pc to 6,561.7 and the mid-cap FTSE 250 slumped 1.6pc to 15,898.37, as British investors grew increasingly concerned about being caught in a tech bubble.   Their anxieties were fuelled by a rout in the American stock markets on Thursday, when the Nasdaq stock exchange, favoured by technology companies, suffered its worst fall since November 2011.  US tech stocks continued their decline on Friday, with shares in Facebook, Google and Twitter all sliding lower.
In London, tech shares were sold-off particularly aggressively. Microchip designers Arm Holdings and Imagination Technologies lost 4.5pc and 5.8pc respectively.
Internet-based companies also fell sharply. Takeaway services group Just Eat, clothing business...
boohoo.com and white goods retailer AO World, which all floated at lofty valuations in recent weeks, were on the back foot. Both Just Eat, off 6.1pc, and AO World, down 4.4pc, fell even further below their flotation prices. Boohoo slipped 7pc to the 50p float level.
Away from tech shares, other companies that were also perceived as being overvalued, such as airline stocks, were under pressure and contributed to the FTSE 100’s biggest one-day fall since March 3 and worst week for a month.  Fears of a bubble reminiscent of the one that preceded the 2000 dotcom crash have grown the past week and also hit markets on Monday.
US markets continued to drop on Friday, with both the Nasdaq and the Dow Jones Industrial Average sliding further.
“The market is very skittish,” David Pavan, a portfolio manager at ClariVest Asset Management, said.
 
 
 

 
 

Thursday, December 19, 2013

The German government has recently signaled willingness to compromise on the issue of which body would be responsible for deciding if a bank needs to be liquidated. Initially, a newly created committee with representatives of national authorities would assume this responsibility, but the formal decision could then be left to an EU body like the European Commission. In disputed cases, the European Council, the powerful body that includes the leaders of the 28 member states, would be brought in to arbitrate.
Berlin has also agreed in principle to calls for a liquidation fund for failing financial institutions that would have a capacity of €55 billion ($76 billion) within 10 years. But the EU member states are supposed to agree among themselves on how these funds can actually be used, with greater voting weight being given to more populous countries. This idea hasn't gone over well with some governments, because they fear that Berlin, working together with a few small countries, would be able to block decisions. In addition, the money in the fund would not be available for use until it is transformed into an official EU instrument in 10 years' time.
Under the "liability cascade" plan being promoted by Schäuble, however, bank shareholders will be required to pay part of the costs for liquidating a bank starting in January 2016. Owners and creditors would first be required to cover any liquidation costs before any taxpayer money could be brought in. Berlin has had success so far in negotiations on this point. The German government had wanted to introduce this rule as early as 2015. But other member states like Italy pleaded for it to start at the earliest in 2018. They fear the move to start in 2015 might frighten investors.
And there's one additional play to safety: Germany continues to oppose using the European Stability Mechanism, the permanent euro-zone rescue fund, as a backstop for fledgling banks. Other countries have suggested employing the fund's billions of euros as part of a future banking union resolution mechanism.

Sunday, November 24, 2013


TODAY's EU - Italy's finance minister, and Luis de Guindos, his Spanish counterpart, will face a grilling from other eurozone finance heads over their draft budgets in Brussels this morning. Last week the European Commission voiced concerns about the pair's spending plans, warning that they did not go far enough to narrow deficits or reduce debt. While the EU does not have the power to veto individual members' budgets, the European Commission hopes the pressure to explain their decisions to their counterparts will force them to make changes.
The gathering comes as the prospect of a second bail-out looms for Portugal. Several senior officials are concerned that Portugal may need a second bail-out, reported the Financial Times yesterday. The officials site Portugal's difficulties in passing tough economic reforms and the string of bond repayments due in the years after Portugal exits its first, 78bn, bail-out. One troika official is quoted as saying "The jury is genuinely out. We are mentally prepared for either [a line of credit or a second full-scale bail-out". THEY ALL HAVE TO ANSWER TO THE BUNDESTAG -  when it comes to their budgets, since Europe is under the natzi Germany boot, but the news is being altered in such a way as the people think that it is Brussells that is runing the EU, when in fact is only Germany!

Friday, September 13, 2013

Italian GDP revised down - The Italian recession is deeper than thought. New data released this morning shows that the economy shrank by 0.3% in the second quarter of 2013, worse than the 0.2% first estimated. That means that Italian GDP is 2.1% less than a year ago, not the 2% as initially thought.
As if prime minister Enrico Letta didn't have enough to worry about with Silvio Berlusconi's fate still in the balance.
 ISTAT, Italy's statistics body, reported that household spending continued to shrink in the face of Italy's economic woes, falling by 0.4% during the April-June quarter.
Capital spending and imports also dropped, by 0.3% quarter-on-quarter in both cases.
The year-on-year data underlined how Italy's economy has suffered over the last 12 months. Consumption is down by 2.4%, capital expenditure is 5.9% lower, while imports are down 4.6%. Exports are 0.2% higher than a year ago.

Here are the details:
Italian GDP, first revision, September 10 2013
Over in the bond markets, Italian government borrowing costs have risen above Spain's for the first time in 18 months. It means Italy is being priced as a (slightly) bigger risk than Spain, in a sign that the Berlusconi Conundrum is dragging Italy towards a new crisis. Italian 10-year bond yields are trading at 4.485% this morning compared to 4.481% for Spain. That's must be a minor relief for Madrid, whose borrowing costs have been pushed up by allegations of government corruption and fears over bad bank debts.

Saturday, June 29, 2013

"Deutschland uber alles". ...

Wolfgang Schaeuble, Germany’s finance minister, has criticized the Irish bankers caught on tape joking about the Irish banking system bailout, calling them “aloof super humans” who were worthy of contempt. The comments followed the released of transcripts of telephone conversation from 2008 between bankers at Anglo Irish Bank that have caused outrage worldwide. John Bowe, Anglo’s head of capital markets, and Peter Fitzgerald, director of retail banking, were heard laughing and mocking as authorities were preparing a rescue deal for the country’s teetering banking system. This has led to accusation that the lender suckered the Irish government into a €7bn (£6bn) bail-out knowing that much more was needed. The bankers are also heard singing a pre-war verse of the German national anthem, with the words "Deutschland uber alles".
Mr. Schaeuble's remarks are quoted in German newspaper Frankfurter Allgemeine and echoed comments by Chancellor Angela Merkel on Friday. “These bankers seem to like themselves in the role of aloof super humans who only have contempt for their fellow humans,” Mr Schaeuble said. “Instead it is they who should get our contempt and to whose game we should put a stop.”
The Irish government was eventually forced to pump €30bn (£25.7bn) into Anglo and roughly the same amount into Ireland’s two other cash-strapped banks, Bank of Ireland and Allied Irish Bank – rescues that brought the entire Irish economy to its knees.

Wednesday, June 12, 2013

BRUSSELS - An idea to create special arrangements within the European Parliament for deputies from eurozone countries is gaining traction but there is confusion over whether it can work in practice. The aim is for eurozone MEPs alone to be able to discuss issues affecting the single currency area - reflecting wider moves to strengthen the economic and political integration of the soon-to-be-18 member region. A Franco-German paper published last week was the latest to mention the concept. It spoke of "dedicated structures specific to the euro area to be set up within the European Parliament" after the 2014 elections. But the idea is highly complex both legally and politically. It is similar to the UK's so-called 'West Lothian' question - first raised 25 years ago and an increasingly hot topic today. That concerns the extent to which Scottish, Welsh and Northern Irish deputies should be able to vote on issues only affecting England.
The European Parliament's own West Lothian question was raised about two years ago about the time when EU leaders started to earnestly think about the institutional future of the single currency, including eurozone bailout funds and eventually a eurozone budget.
Political leaders in the parliament suggested setting up sub-committees to deal with eurozone issues. But since then discussions have stalled. "The problem is that when you look at the rules of the treaty, it is immensely difficult to put such a concept in place," said centre-right Polish MEP Rafal Trzaskowski.
"Because we have all equal rights. We represent citizens not member states. It would be quite difficult to organize it in a way that would not breach the treaty." According to Trzaskowski, who has been involved in discussions on the issue, one idea would be to have some sort of gentleman’s agreement under which the political parties concerned would agree amongst themselves to send only euro and would-be euro member deputies to a sub committee.   Another option, said Trzaskowski, could be to have the three biggest parties give key posts and reports only to euro member states.  There is also the broader question of what is purely a eurozone issue. "It's one union and one financial market. The problems of the banks are not just issues of the eurozone," said Jacek Saryusz-Wolski, also a Polish MEP. UK liberal MEP Andrew Duff points to the financial transaction tax (FTT), supported by 11 eurozone states but potentially affecting all 27 member states. "The discussion over the FTT is a very good example of this. All member states are seriously involved in that concept. They all have a stake." He also raises a purely organisational objection. "If you decide to divide the present responsibilities of the economic and monetary committee then you’re risking incoherence and inconsistency. And we’ve got quite enough of that already." In addition to blurred boundaries between euro and non-euro issues, Polish and other MEPs reject the idea on principle. Of the all the eurozone outs, only the UK and Denmark have an opt-out from joining the single currency. It was part of EU membership negotiations for the rest. So why, goes the argument, should they be excluded from discussions on issues that will eventually affect them. Saryusz-Wolski said he and other eventual eurozone member MEPs will oppose creating "two tiers of MEPs" within the parliament and, if necessary, before the European court of justice.

Wednesday, May 29, 2013

Christian Noyer, governor of the Bank of France, said the FTT posed a very real “risk” to the economy if not implemented correctly. France was one of a splinter group of 11 European Union countries to decide to press forward independently with a so-called Tobin tax earlier this year. The UK has opposed the move, which Sir Mervyn King, Bank of England Governor, said earlier this month does not even have the unqualified backing of the 11 members adopting the levy. He claimed there was “enormous scepticism” even among politicians in countries signed up to it, adding that he could “not find anyone within the central banking community who thinks it is a good idea”. Mr Noyer’s comments appeared to confirm Sir Mervyn’s analysis. Mr Noyer, who is also on the European Central Bank board, said: “It will be essential to define the base, interest rates and scope of a possible financial transaction tax in order to prevent the risk of destroying entire segments of our financial industry or the offshoring of jobs, as well as the highly counterproductive effects on government borrowing and the financing of the economy.”
Under the current plan, a 0.1pc levy would be charged on equity and debt transactions and a 0.01pc tax on derivatives. Germany, France, Italy and Spain are among those that have agreed to the plan, which the European Commission expects will raise €35bn (£30bn) a year and hopes will be in force by 2014.
To prevent business moving abroad, the FTT carries an “extra-territoriality” clause that would see the levy imposed on any euro-denominated transaction, even in countries that are not signed up to the FTT. The UK is challenging the decision in the European courts, and the US and other countries have vowed to block it – which would almost certainly make the FTT unworkable.... Well...
Monsieur Noyer .... most of us (being of sound mind if not body) have been saying this since the idea was first mooted. The concept of a financial tax applying only to Europe is hilarious. The progenitors must have shares in Singapore, NY and Shanghai.
It is of course barmy. All the French political elite knows how to do is impose more taxes. I am astonished theyhaven't yet got their grubby hands on e-mails! Imagine that - a 1p tax on all e-mails .... that would allow them for a while to continue with their insane spending before running out of money agfain and looking for another Milch Kuh..... Even the French socialists couldn't tax sex, could they?But better late than never, Mr Noyer, and GOOD LUCK with passing on your message to your President .... however, given A) his reception to new ideas and B) his general understanding of what is going on, I am not that optimistic.  No, I'll rephrase that; you are belching into the face of a hurricane ....

Wednesday, May 1, 2013

Speaking ahead of a confidence vote in the lower house, Mr Letta said Italy could not afford to focus simply on trying to cut its huge public debt and needed a new emphasis on lifting the economy out of recession. He will be backed by his own center-left Democratic Party, Silvio Berlusconi's center-right People of Freedom (PDL) party as well as centrists led by former prime minister Mario Monti, with a second vote in the Senate on Tuesday.
"We will die of fiscal consolidation alone, growth policies cannot wait any longer," Mr Letta said, noting that the country's economic situation remains "serious" after more than a decade of stagnation.
However he pledged to stick to Italy's budget commitments to its European Union partners, announcing he would visit Brussels, Paris and Berlin this week. Financial market reaction to Letta's appointment and the end of months of political stalemate after last February's inconclusive election was positive, with bond yields falling and shares rising....So Letta thinks he can revive the economy! How pray? Any fool can see that Italy can't even find breathing space while it remains strapped into the "Gold-Standard" like EMU straight jacket and shackled to the brick wall of Germanic inspired demands to collapse public spending, aka austerity. 
Until this otherwise clever nation comes to its senses and exits EU/EMU, Italy seem destined to continue its underworld sojourn in the dank dungeons of economic bondage and fiscal discipline. 
Responding to Berlusconi's demands for an unpopular housing tax to be scrapped, Mr Letta said payments due in June would be halted prior to a wider overhaul of property taxes but he did not promise to abolish the tax altogether. He also said he hoped an increase in sales tax, which would see the main rate rise from 21pc to 22pc planned for July, could be delayed. In a speech laying out an ambitious programme of reforms, Mr Letta said the welfare system would have to be strengthened, taxes weighing on employment and young people would be cut and measures to get more women into the workforce would be passed. He promised to change the current electoral law, which contributed heavily to the inconclusive election result in February and left Italy in political limbo for two months as the parties wrangled over forming a government. He also said he would review the progress of reforms in 18 months' time and if he felt that he had been blocked by other parties he would not hesitate to assume the consequences, an apparent suggestion that he would resign.

Friday, April 19, 2013

EU Parliament adopts "most comprehensive and most far-reaching banking regulation in European history" with overwhelming majority
"Today's decision makes European banks more resilient, so that no more taxpayers' money has to be used to prop them up", explained Othmar Karas MEP, Vice-President of the European Parliament. The new set of rules for banks, which was adopted with an overwhelming majority, comprises more than a thousand pages and is the basis for the planned banking union. "The new single rule book for all 8200 banks in the EU is the foundation on which the house of the Banking Union is to be built. The single supervisory mechanism will be the roof. As walls to the house, we must now feed in the Resolution framework for banks and the deposit guarantee schemes. The new set of rules is the most comprehensive and most far-reaching banking regulation in the history of the EU", he said. Karas was Parliament's negotiator for the law known as the CRD (Capital Requirements Directive) or Basel III....Part of the new rules is that for the first time, there will be a cap on bankers' bonuses. Bonuses may not be higher than the salary. Only in exceptional cases, the shareholders of a bank may decide that bonuses may amount to a maximum of twice as much as the fixed salary. "The rules concerning bankers' bonuses do not regulate the amounts of the salaries. As legislators, we do not regulate salary levels. But we install fairness and transparency and we contribute to a change in culture", said Karas. The most important part of the new rules is tightened capital requirements for banks. From 1 January 2014 onwards, European banks have to put aside more and better capital to be prepared for possible crises. Unprecedented is the new rule that banks have to publish, country by country, what their profit is, how much tax they pay and how much they receive in subsidies. This increases transparency.
"The new capital requirements are key to an efficient banking supervision and therefore a crucial condition for the banking union", said Marianne Thyssen, EPP Group MEP responsible for the negotiations on the new single European banking supervision. "Today's large majority for the new banking regulation is a major success for Othmar Karas and an important step on the road to a safer banking sector. Both the new capital requirements and the reinforced European banking supervision will help to avoid crises. Prevention is better than cure", said Thyssen.  For the first time, criteria for the liquidity of bank capital are being introduced. Banks have to be able to fulfill their liabilities in stress situations for a period of at least 30 days. Particularly important to Othmar Karas has been making loans to Small and Medium-Sized Enterprises (SMEs) easier: "Banks must focus on their core business, which is financing the real economy." The new law reduces the capital requirements for loans to SMEs and business start-ups. Granting loans become easier this way. In addition, continental European banks are being strengthened in their competition with Anglo-American competitors by recognizing the characteristics of European banks as decentralized structures and loss-sharing agreements. "Our aim is to make European banks as firm as a rock on the global financial markets", concluded Karas.

Wednesday, April 10, 2013

As the SĂĽddeutsche itself reports, news that Deutsche Bank conducts offshore operations isn't new. As the paper notes, such activities aren't as prolific at Deutsche as at Switzerland's UBS, where the records traced at least 2,900 offshore entities. Back in 2009, it was already public knowledge that Deutsche Bank had some 500 subsidiaries in places known to be tax havens.
Still, the paper claims, the government has done little to stop a German firm from engaging in the kind of financial behavior Berlin has been aggressively combatting in countries like Luxembourg, Switzerland and Cyprus. The paper quotes the financial policy point man in parliament for the Green Party, Gerhard Schick, criticizing both the government and the business model of firms like Deutsche Bank. He alleges the banks may be contributing to the shielding of money laundering activities, tax evasion and money linked to corruption. He also alleges that Chancellor Angela Merkel's conservative government "at the very least tolerates these illegal structures and is possibly protecting them." In an interview with SPIEGEL ONLINE published on Friday, the head of Germany's Federal Financial Supervisory Authority (BaFin), Elke König, said her authority, although not responsible for taxes, would investigate if banks appeared to be systematically violating or helping people to violate tax law. "Banks have a special responsibility," she said.
For Deutsche Bank, Germany's largest bank, the revelations are creating a second wave of unwelcome scrutiny this week. On Wednesday, the Financial Times reported that Germany's central bank, the Bundesbank, has launched an investigation into claims the bank hid billions of dollars of losses on credit derivatives during the financial crisis. Bundesbank investigators plan to fly to New York next week as part of the inquiry into claims that the bank miss valued credit derivatives in order to hide losses as high as $12 billion and avoid a government bailout.

Sunday, March 31, 2013

Where is the money going? It is being transferred onto the balance sheets of bankrupt banks from the taxpayers. Banks then use it hike their salaries repair their pension funds. Then the attempt to repair and cover up for their disastrous lending practices.
They starve the real economy of working capital. It was decided in the European looney union that every banks was too big to fail. Now they have decided to let whole countries go to the wall because their banking policies were another disaster. Hans Werner Sinn suddenly copped that the obligations of the top 6 debtor countries is over 8.3 trillion. The gloves are off and now they are in confiscatory mode not just hitting bond holders but large depositors who are going to have to flee very fast if they are to escape with their wealth.Make you laugh when you see Osborne, in the middle of all this, trying to buy the next election taking people for complete fools by handing them loans they would otherwise be able to afford. People should consider that act of treachery as tantamount to being handed a long length of rope with which to hang themselves and their families. Forget Osborne and his ilk, keep saving and you will get them for the price of your savings in due course.

Monday, March 18, 2013

It was always going to be an unusual but memorable moment as Italy's parliament reconvened after the recent inconclusive elections, with members of the maverick party founded by comedian Beppo Grillo taking their places for the first time.
And so it is proving. Southern Europe editor John Hooper writes:Not since the dawn of the Italian Republic after the Second World War, when ex-Communist partisans arrived in force, has there been an opening of parliament anything like today’s.The representatives of the Five Star Movement (M5S) unexpectedly respected the rule that male Italian lawmakers must wear ties (though, in line with the M5S’s enivronmentalist principles, many chose a black one bearing the words “No Coal”). But from the moment that the movement’s deputies entered the Chamber, it was clear they were going to be awkward to deal with.Instead of taking up a position on the left or right of the semi-circle in which the members of the lower house sit, the M5S’s deputies (who prefer to be called “citizens”) ranged themselves around the back.“Neither right nor left, but above (and beyond),” chirped one of their number, Tiziana Ciprini, on her Facebook page.The whole episode reflected the view that the movement’s co-founder, the comedian, Beppe Grillo, put to me in an interview last month: that the M5S cannot be fitted into conventional political categories.It is one of things that worries many Italians about the M5S. Most of the so-called grillini are passionately committed to progressive causes (they eschew the mineral water that is everywhere available in parliament in favour of tap water, for example).  But denying the existence of left and right is a classic sign of populism. And Mussolini did it all the time.

Wednesday, February 6, 2013


Just in – new survey data suggests that the eurozone's bruised economy has turned a corner.
Marki's Eurozone Composite PMI, which measures business activity across thousands of companies, hit a 10-month high of 48.6 In January, up from 47.2 in December
Markit reported that businesses were more optimistic about the future. However there are sharp differences between countries.
Reuters has the early details:
While still signalling a contraction as the index has been below the 50 mark that signifies growth since February last year, it has risen consistently in the last three readings.
Private industry makes up nearly two-thirds of the euro zone's economy and worryingly for policymakers, the data showed a widening chasm between Germany - Europe's largest economy - and France, the bloc's second biggest.
Chris Williamson, chief economist at Markit, said the eurozone is showing "clear signs of healing", having entered recession last year,
However, there were stark differences between Germany and France: Markit's composite German PMI chalked up its biggest one-month rise since August 2009, soaring to its highest since June 2011. But in neighbouring France it plummeted to its lowest in nearly four years.
At 43.6, France's services PMI was even below readings from Spain and Italy.

Tuesday, February 5, 2013

Allegations of corruption against Spanish PM Rajoy and reports that former Italian PM Berlusconi is gaining ground in the country’s polls ahead of this month’s election took some of the shine off the euro on Monday.
Notwithstanding its latest wobble, we continue to forecast an appreciation of the euro to $1.40 by mid-year as sentiment towards the euro-zone slowly improves. But we are also sticking to our forecast that that the exchange rate will slip back to $1.25 by year-end – a view which is predicated on the assumption that the crisis will flare up again in the second half of the year.
That being said, Monday’s news underlines the fact that such a flare-up could happen at any time. 
Spain’s governing People’s Party (PP) has just said it will take legal action against whoever has leaked documents published last Thursday that purported to show Prime Minister Mariano Rajoy receiving €250,000 that had been hidden from tax authorities.
"All those who may have attributed, leaked and published,” the documents -- allegedly drawn up by two former PP treasurers -- may be subject to the action, third-ranking PP member Carlos Floriano told a news conference called before Rajoy is due to speak to the media alongside Angela Merkel after a summit in Berlin.
Rajoy denied the allegations in a televised speech on Saturday, but did not take questions. On Sunday, opposition Socialist leader Alfredo PĂ©rez Rubalcaba called for Rajoy to resign, which the premier has ruled out.
Also on Sunday, opinion polls showed the PP’s popularity had tumbled from when they won power in November 2011 to within a whisker of the Socialists, although neither party would be able to command anything like a majority.
Fed up with record unemployment, an economic crisis with no signs of ending after five years and now fresh reports of corruption almost daily, Spanish voters have increasingly turned to small parties or the streets. Police helicopters buzzed central Madrid rooftops for three nights in a row after Thursday’s allegations as protestors rallied outside PP headquarters.