Sooner is better. As soon as you can is best.
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Victoria Bitter
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Does IMF Stand for Impressive Macroeconomic Flexibility?
So the IMF is holding a meeting on rethinking macroeconomic policy (I was invited but couldn’t make the timing work.) And the Fund’s chief economist has already made it clear that he’s open to some serious revision of the prevailing paradigm.
http://krugman.blogs.nytimes.com/2012/01/09/very-serious-scare-tactics/
Very Serious Scare Tactics
As part of a longer-term project, I’ve been looking into the why and how of the dominance of austerity rhetoric over most of the past two years. One aspect is the rapturous glee with which policymakers seized on the theory of expansionary austerity, without waiting to see how well it would stand up under scrutiny (and the answer was, not well at all).
Another aspect, however, is the willingness of Very Serious People to invoke apocalyptic visions based on nothing but their gut feelings — gut feelings that people with actual money on the line didn’t share. Here’s Erskine Bowles, on March 8, 2011, warning about an imminent debt crisis:
This problem is going to happen, like the former chairman of the Fed said or Moody’s said, this is a problem we’re going to have to face up to. It may be two years, you know, maybe a little less, maybe a little more, but if our bankers over there in Asia begin to believe that we’re not going to be solid on our debt, that we’re not going to be able to meet our obligations, just stop and think for a minute what happens if they just stop buying our debt.
Alan Simpson then weighed in and declared that it would be less than two years — presumably based on his deep knowledge of markets and debt history, which he somehow acquired without anyone noticing.
What happens to interest rates and what happens to the U.S. economy? The markets will absolutely devastate us if we don’t step up to this problem. The problem is real, the solutions are painful and we have to act.
Now, maybe Bowles and Simpson will be proved right, although I very much doubt it. But what I do know is that come March 2013, with interest rates still very low and no hint of a debt crisis, they will still be considered Very Serious.
False warnings of doom only matter if they come from the wrong people, advocating the wrong things."
http://www.calculatedriskblog.com/2012/01/herman-van-rompuy-europe-needs-job.html
Herman Van Rompuy: Europe needs "job-friendly growth"
http://www.calculatedriskblog.com/2012/01/germany-and-france-warn-greece-on-debt.html
"A couple of articles ...
From the WaPo: France, Germany warn Greece to make debt deal
France and Germany, the European Union’s key powers, insisted Monday that private creditors must take losses to help over-indebted Greece right its finances, but they also warned the Greek government that E.U. rescue funds will be held back unless it makes a deal soon with the increasingly nervous banks holding its debt.
From the WSJ: Greek Bailout in Peril
...
“We must see progress on the voluntary restructuring of Greek debt,” Reuters quoted Merkel as telling a joint news conference after the Berlin consultations. “From our point of view, the second Greek aid package, including this restructuring, must be in place quickly. Otherwise, it will not be possible to pay out the next tranche (of the bailout) for Greece.”
The spreading recession in the euro zone is also making it harder for Greece and other countries with bailout programs to close their fiscal deficits, economists said. Greece's stubbornly high deficit is raising the risk of a full-blown default on its bonds ...
Usually these negotiations continue right until the last minute. The "spreading recession in the euro zone" isn't helping."
http://www.telegraph.co.uk/finance/financialcrisis/Debt crisis: live
Cameron warns Germany may have to accept a big transfer of wealth to weaker southern European nations to address a fundamental lack of competitiveness as Merkel and Sarkozy push for transaction tax.
10 Jan 2012| CommentUK economy likely to shrink amid euro crisis
The Government must act now to repair the blow to business confidence dealt by the eurozone debt crisis, or risk an even greater setback for Britain's ailing economy, the British Chambers of Commerce warned.
10 Jan 2012| 2 CommentsGermany's stance on financial transaction tax risks French rift
Angela Merkel has warned that German support for the financial transaction tax (FTT) is not guaranteed, in a move that could open up a rift with France just days before the next European summit.
09 Jan 2012| 61 CommentsCan the euro survive another year?
The eurozone debt crisis has started the new year as it no doubt means to go on – with an inconclusive summit, an irrelevant commitment to a financial transactions tax (or Tobin tax), and another bizarrely anomalous event in money markets.
09 Jan 2012| 68 CommentsDebt crisis: as it happened, January 9, 2011
Cameron warns Germany may have to accept a big transfer of wealth to weaker southern European nations to address a fundamental lack of competitiveness as Merkel and Sarkozy push for transaction tax.
09 Jan 2012| 582 CommentsAlshaya rescues La Senza in pre-pack deal
Alshaya, the middle-eastern retail investor, has stepped in and signed a pre-pack administration deal to rescue 60 of La Senza's 144 high street lingerie stores and 1,100 jobs.
09 Jan 2012| CommentUK jobs lost as SeaFrance goes into liquidation
Almost 130 jobs in the UK are to be lost after ferry company SeaFrance was ordered to shut down.
09 Jan 2012| 14 CommentsClegg warns against 'rivalry' in Europe
Deputy Prime Minister insists Europe can only tackle the economic crisis by sticking together.
09 Jan 2012Clegg: Britain should sign up to eurozone treaty
Deputy Prime Minister says Britain should approve the eurozone treaty which was vetoed by David Cameron last month.
09 Jan 2012| 958 CommentsMerkel, Sarkozy push for Tobin tax despite German split
Angela Merkel and French President Nicolas Sarkozy are pushing for a financial transaction tax by March, despite the German Chancellor admitting her government is divided on the issue.
09 Jan 2012| 5 CommentsDavid Cameron: German power threatens future of euro
David Cameron has warned that the euro will only survive if weak countries become more competitive, or Germany hands over some of its wealth.
09 Jan 2012
Europe, specifically southern Europe, is in financial trouble.Northern Europe and the US are not.The European banks are in delicate condition because of the sovereign bonds they hold on their books.The bonds are nearing default.There does not appear to be a rescue in the works.
http://krugman.blogs.nytimes.com/2012/01/09/germans-and-aliens/
Germans and Aliens
The Times has an article today about Germany’s faith in austerity as the answer to depression. It’s sad reading for anyone hoping that Europe will get its act together; it’s especially galling that Germans remain so committed to belief in expansionary austerity, despite the thorough empirical debunking the notion has been given over the past year and a half (see, e.g., this IMF working paper (pdf)).
But the Germans believe that their own experience shows that austerity works: they went through some tough times a decade ago, but they tightened their belts, and all was well in the end.
Not that it will do any good, but it’s worth pointing out that Germany’s experience can only be generalized if we find some space aliens to trade with, fast.
Why? Because the key to German economic affairs this past decade has been a truly massive shift from current account deficit to surplus:
Now, other countries within Europe could emulate Germany’s past if Germany herself were willing to let its current account surplus vanish. But it isn’t, of course. So the German demand is that everyone run a current account surplus, just like they do — something that would only be possible if we can find someone or something else to buy our exports.
It remains remarkable to see with how little wisdom the world is governed."
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Janet Camp
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Sanders Rails Against Tax Bill -- For Hours and Hours
6:48 p.m. | Updated Senator Bernard Sanders, independent of Vermont, took to the floor of the Senate at 10:24 this morning to denounce the tax cut deal struck between the White House and congressional Republicans — and he’s still going.The deal passed and was signed.The cuts will expire next December.
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The Importance of Being Ernest Hemingway
He was earnest. I am straight forward.
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EASabo
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Does IMF Stand for Impressive Macroeconomic Flexibility?
So the IMF is holding a meeting on rethinking macroeconomic policy (I was invited but couldn’t make the timing work.) And the Fund’s chief economist has already made it clear that he’s open to some serious revision of the prevailing paradigm.The collapse has not started yet.
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Lift-Off for Aviation Trainees
There are a very few jobs available.
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The C.E.S. No-Shows
Interesting.The Times has noticed that hardware has paused.
They have found something. -
Edouard Andrieu
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The Angry Rich and Taxes
“The Angry Rich and Taxes - http://nyti.ms/9wPOWn”Taxes are about the only tool I can think of that reduces the amount of money in circulation.Running the government in surplus reduces inflation.When there is no inflation it produces deflation and pain for most people.
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Bill Cunningham | Sea Life
Hemlines down, market down.
Slinky gowns were the theme of the early Thirties.They do look good.
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